Reply #8: Soon gonna have Tio Sam by the cojones... "Three More Nails in the Coffin of the U.S. Dollar" [View All]

[Say_What]

Three More Nails in the Coffin of the U.S. Dollar

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Though it has been given scant coverage in the United States, Iran’s decision to drop the dollar in favour of the euro has been receiving widespread attention in Europe. As reported by Agence France-Presse on Monday, Iranian government spokesman Gholam Hossein Elham told news reporters: “The government has ordered the central bank to replace the dollar with the euro…in commercial transactions,” repeating exactly what Saddam Hussein did in September 2000. Lest there be any misunderstanding, Elham went on to say: “Foreign income sources and oil revenues will be calculated in euros, and we will receive them in euros in order to put an end to our dependence on the dollar.”

This change will lessen the demand for dollars, which will cause the value of the dollar to drop. Strike one.

The second strike is the U.S. ban on melting and export of coin.

The U.S. Mint implemented a new regulation that bans the melting down and exporting of pennies and nickels. It is sound economics to harvest the metallic value of these coins, because the value of their base metal content is greater than the coin’s face value. Here’s what Lee Rogers, editor of the Funny Money Report, says about it. His analysis is spot-on:

“They claim that they are imposing these rules because they don’t want certain individuals who melt down coins taking advantage of the American tax payer. It isn’t the people who are melting down the pennies and nickels that are taking advantage of the American taxpayer. Those people are just trying to protect themselves from the stupidity of the Federal Reserve that continues to destroy our currency. The Federal Reserve is the very reason why the melt value of these coins has risen beyond their face value. Federal Reserve Notes have lost over half of its value in terms of gold and silver since 2000 because they have dramatically increased the money supply over this period of time. The Federal Reserve has taken advantage of the American taxpayer, not the people who are melting down these coins. It is complete rubbish that the U.S. Mint would make scapegoats out of individuals who melt their coins to be the ones who are screwing over American taxpayers. The press release should be blaming Alan Greenspan for taking advantage of American taxpayers because he was responsible for creating the excessive amount of credit that has since decreased the value of the currency.

...In summary, the outlook for the U.S. dollar is worsening, which is a conclusion that can also be reached by looking at what happened during last week’s trip to China by Treasury secretary Paulson and Fed chairman Bernanke. They came home empty handed, without any concessions from the Chinese or commitments by them to help the United States by continuing to hold dollars, which the United States is recklessly spewing throughout the world as a consequence of its ongoing trade deficits.

http://www.dailyreckoning.com.au/us-dollar-5/2006/12/22/