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.
Bill Bonner
The Daily Reckoning Australia
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About the Author
Best-selling investment author Bill Bonner is the founder and president of Agora Publishing, one of the world's most successful consumer newsletter companies. Owner of both Fleet Street Publications and MoneyWeek magazine in the UK, he is also author of the free daily e-mail The Daily Reckoning.
Comment by Colin on 8 November 2007:
Ambigious words like 'doomed' should be banned by any financial commentators. Reasoning being, they never own to being wrong 2-3 years later when the opposite to their prediction comes true. They just cite they were talking on a different time frame.
Comment by Pete on 9 November 2007:
I can see your point Colin, but if you look at the nice Daily Reckoning logo at the top of the page it states:
"A freewheeling Web site for libertarians, gold bugs and doom enthusiasts of every stripe"
Any hyped-up reporting needs to be taken with a grain of salt. On one-hand we have economists stating that the US is in a bull-market or that it is not in any trouble, and here we have some doom-sayers that seem to have a better grip on reality.
I know who i will listen to...numbers lie, theories lie, but the keen observer with nothing to gain other than a readership (and critics)...well, i will at least listen.
And if anyone could accurately predict exactly when these things can happen. You can only look at the signs, the decisions are up to the individual.