Now comes word that the world’s richest model has reportedly refused a contract to be paid in US dollars. Gisele Bundchen is a Brazilian beauty. She’s also no fool. She’s asking for contracts specifying payment in euros.
And she’s in good company; Warren Buffett, who said: “We are still negative on the dollar relative to most other currencies, so we bought stocks in companies that earn their money in other currencies.”
Our old friend Jim Rogers, also recently announced that he was selling his home and all his possessions to buy the Chinese currency, the yuan.
“The dollar is in serious, serious trouble,” he said. If the Fed doesn’t raise rates…that is, if there is no Volcker to bite the bullet…”the dollar is going to collapse.”
And now Bill Gross of PIMCO says that if you could only make one investment, you should buy something that is not in dollars.
The poor greenback has lost 34% of its value since ’01, according to Bloomberg . Of course, it depends on how you measure it. It’s lost more than that in terms of oil and gold, for example. Earlier in the week, oil hit a new record high – at US$96.70. The commodities index also hit a new record high. And gold hit its highest point since ’80…at US$823.
You go girl!
Credit Suisse predicts that the price will continue to rise – to over US$1,000 an ounce in the next five years. We don’t think we’ll have to wait that long. At the rate it’s moving, gold could easily push over US$1,000 next year. No sweat.
Over the last 18 years, new supplies of gold have failed to meet new demand in all but two years. The deficit was closed by sales of gold from central bank vaults. You can imagine central banks selling their gold when prices were falling…or, even, as the Bank of England did, at the lowest price for gold in 20 years. But it is hard to imagine that central banks will want to sell much gold when it is in such an obvious bull market. Most likely, sales will decline…and the price of gold will soar.
What gives? Is the dollar doomed?
Yes, dear reader, the dollar is doomed.
The Daily Reckoning Australia