Gold vs. EUR/USD

For quite some time now you have been hearing from people on TV and radio to invest in gold... They've been saying to invest in gold because out economy is in big trouble and the dollar is dropping in value... What they are saying is true, our economy is in trouble and gold is on the rise, but is gold the best option? For many people yes, but for those of you who would like a chance to make a much higher return the forex may be the better choice... With gold you get a 1:1 leverage but 200:1 with forex... Now why does this matter? Lets say you have only a few thousand to invest with, if you chose gold then $3,000 USD would buy you around 3 ounces of gold, so gold would have to go to $2000 per ounce to double your money... A $3,000 investment in the forex trading the EUR/USD, had you begun in February 2006 the market was around 1.2500 and remained in the trade until January 2008 the EUR/USD was at 1.4500... Trading only a 5% margin of your account with a 200:1 leverage you would have made $6,000 for a total account balance of $9,000... A 300% return in less than 2 years. To do that invested in gold, it would have had to climb to $3,000 per ounce... If gold goes up to $3,000 per ounce then you can bet the dollar is sinking faster than gold is rising... Along with a 200:1 leverage, you will clear a much higher return...

Lower real estate prices

As you have probably noticed we as a country have a little problem with our real estate prices, and for those of you who haven't noticed just turn on the nation news... lower real estate prices have an impact not only on the people who own them and surrounding neighbors bit on the cities and governments as well... In return affect the communities even more... When process drop in value cities collect less taxes from property taxes... property taxes are used for man things such as funding for schools, repayment of municipal bonds, employing police and firemen, etc... Now when these items are poorly funded it impacts the community’s safety, children's learning and even pushes property values even lower... Businesses who would have liked to open a business there will rethink that city as being an option and open elsewhere... So what do these cities have to do? Well, they have two options and usually they do both, either raise taxes or ask the federal government for help... Giving that the value of the dollar is linked directly to our government being able to collect taxes, lower real estate is sinking our dollar even lower...

Impact of foreclosures on the dollar

Every time a foreclosure happens which is now around 1 in every 65 people, governments lose money... They lose money in the form of taxes because when lenders foreclose on homeowners they do not pay the property taxes on that property... Instead they will attempt to sale the property to another buyer whom will begin paying the property taxes again... these lenders are required to file with the county clerks office when they foreclose but they rarely do so the county usually don't find out until it's too late to do anything about it... A city in Ohio has lost so much money in taxes from lender foreclosing and not paying taxes they decided to file suit on these lenders... Many times a homeowner will have to do a short sale or the lender will foreclose and the home for less than what the homeowner owed... The lender just writes this off as a loss to the IRS and it goes as "income" to the homeowner on their 1040... The homeowner obviously unable to pay the additional thousands in income taxes so the IRS allows them to file a hardship form to waive the amount... So the IRS takes the hit from tax collection... and as I’ve already stated the dollar or an country's currency is tied right to that country's ability to collect taxes...

Foreclosures

Right now there are 14mm subprime loans in America... Many of which are (ARMS) adjustable rate mortgage that the interest rate will adjust up in the very near future... Mortgage companies are primarily the ones at fault here for selling these products to financially ignorant clients, in order to make commissions and profits... the reason they chose to use an arm instead of a 15 or 30 year loan is to get the buyers into a higher priced home, a home they had no business buying in the first place... The majority of these buyers could hardly afford to pay their note before the arm adjusts higher, so it's only a matter of time before they foreclose n their home... This is exactly what the lenders want, yes what they want!!! Why you may ask? because of out lovely equities markets allowing lenders to package these notes together and sale them on the open market as mortgage backed securities after selling the note back and forth to other lenders to leave a confusing trail to anyone wishing to look... it is such a profitable thing to do that lenders have even illegally foreclosed on homeowners who have never missed a payment, and many even over paid their mortgage... This is not just a rare occurrence either, after visiting a website www.msfraud.org I noticed this is happening all over the country in mind boggling numbers... These lenders know that no one will believe these foreclosure victims that they have had their home stolen from such a recognized company that the courts won't help these people... Our legal system is not trained to see the difference between companies that stole $50,000 than a bank robber that just walked out the bank with $50,000... There are numerous laws on the books already to protect homeowners but the courts seem to only look at things as they appear to be and not as they are... The media rarely run these stories as they are proven to be instead they run the story only to protect their advertising revenue by the lenders who spend millions at their paper or station... There are many other issues with mortgage servicing fraud and to find out more log onto www.msfraud.org...
In a country as powerful as the United States we should not have these types of problems, but we are and it proves we have a weak infrastructure... Without fixing out court system and punishing white collar crooks for what they do you can watch the impacts it has on our economy and people's moral... That all said, what impact will it have on the dollar?

China exporting inflation vs. deflation

It seems like almost every product we buy today is made in China... Because this product is purchased from China, they have become a much wealthier country... China's stock market climbed by an estimate of 92% in 2007... With China's recent growth of their economy their products we buy are costing us more due to costing them more... where as before it was becoming cheaper as their productivity grew, but after a while inflation began to take over... So now China is exporting inflation instead of deflation, meaning that the products we buy from china are costing us more now too... so at some point with shipping cost and companies paying "bribe" money to the Chinese government it will cause American companies to raise their prices to the same level as if it was made right here, but without Americans being paid wages to make it... But these companies have spent billions already in order to make product there so they will not likely return to American made products... This is another cause of inflation in America which will cause the dollar to be worth less.