You know I’ve been crusading to save the greenback and restore King Dollar. But new entitlements that open the door to a government takeover of the health-care sector are no way to do it. Not surprisingly, as the Baucus Billmade it out of the Finance Committee yesterday, the dollar fell once again and gold jumped (closing at $1,064). Not good. Smells like the 1970s.
Just look at two ominous headlines in the news: First is the global shift out of the dollar and into commodities. Second is the dollar losing its reserve status to the yen and the euro.
In the second quarter ending in June, central banks around the world invested 63 percent of their new cash reserves into euro and yen, and put only 37 percent into dollars. Over the past six months, the dollar has lost 15 percent while gold has climbed nearly $150. If this continues, spiking inflation and interest rates will choke off the bull market in stocks and do serious damage to the economy. It could happen fast.