US embassies are being advised to purchase local currencies

"Some U.S. embassies worldwide are being advised to purchase massive amounts of local currencies; enough to last them a year. Some embassies are being sent enormous amounts of U.S. cash to purchase currencies from those governments, quietly. But not pound sterling. Inside the State Dept., there is a sense of sadness and foreboding that 'something' is about to happen within 180 days, but could be 120-150 days."

http://www.marketwatch.com/story/schultz-paints-bleak-picture-of-future

Devaluation of the $US

Due to all the excess liquidity in the American economy at the moment, from all the Feds prime pumping and buying up of toxic assets, I think they need a banking holiday to consolidate all the funds and attempt to retract what they can out of the system.

However calling for a banking holiday will cause panic and probably result in the US dollar falling in value and hence foreign currencies will increase in value. I believe what they will do then, is buy back the US dollar with all the foreign currencies to attempt to prop it back up again.

This is what I suspect might be going on, it would certainly make sense. Regardless, a good time to invest into gold, silver and oil, which should all increase in value when this event occurs. If you place a few thousand in, you could make a nice return.

USD is about to find a low point in the next few weeks that it will climb from for quite some time...
at the same time the stockmarket will stop going up as well.

well according to Elliot Wave theory





currently have long USD/JPY up half a cent (50 pips)
have shorted pound against usd tho - up 2 cents (200 pips)
and I always have silver and buy more on dips. but am expecting it to stop going up soon (its doubled in last six months) as USD turns and climbs.

they could be wrong too. nothing is certain.

That's interesting Peat. I was recently shown Eliot Wave Theory. I'm not sure what I think about it yet, do you find it's predictive trends come true a lot of the time?

the theory can hold without necessarily being stunningly useful as a predictive tool. As you should know if you've read about EWT there are some fundamental rules that can never be broken in a wave count. So if your counting a pattern in a particular way them at certain points in price action your count is objectively wrong and must be recalculated. This means from a trading perspective you have set cut-off (stop-loss) points. This is very useful because its all about minimizing losses and maximising wins. Knowing when you're wrong , and accepting that is very important. Hope springs eternal when you're desparate for a losing trade to turn around, but a cut off point prevents the wound being fatal.

However there aree flaws with the theory from a predictive perpective are that there is still a lot of uncertainty - eg even if you've counted 5 waves up (or down as in the picture above) you still dont know when the 5th is complete - as per the old saying , no one rings a bell.

Prechter (the most vocal EWT proponent ) also seems to be a perma-bear and definitely gets it wrong a lot however he definitely called this recession and whats more called the point to take profits on the shorts. He stated on Feb 25th this year that the bull (or more strictly speaking a bear market rally ) would return, and look whats happened since then. (50% gains in most indexes)

Good reply, it seemed very honest. I can kind of understand what you are alluding towards, it also makes sense that if the trend was constant, it is inevitable that there was going to be a crash. From my conversations online Prechter has also been quite dismissing of the break away inflation proponents, saying it will come, but not before a lot of hot air has been emitted.

As a side note, Peter Schiff informed us this week (or the one just ending) that the Chinese have started issuing Yuan Debt. They are performing this discretely through Hong Kong and to reiterate what Peter said, they have no need to as a creditor nation, unless they desire world markets to become more familiar with Chinese bonds, possibly so their currency can take a more active role in the global economy.

A substitute to the US Dollar? not sure what to think about that, I can't see many countries decoupling due to pressure applied through the IMF and World Bank on it's leveraged members. Big currency wars going on behind the scenes too, have been told Japan and Israel have been propping up the US dollar. Lots of strange activity going on.