Bill Gates: ''The ol' dollar, it's gonna go down.''

Some of you might have read this already, but for those who haven't yet can read the opinion of Gates hereunder. Besides, I have included some quotes from the Iranian Oil Bourse thread, as I think it needs a seperate thread to discuss whether the Bush administration is preparing for the worst case scenario already.

In my opinion they are fighting a pointless war, as the US will not be able to prevent every country from trading in Euro's or any other currency than dollars, by the use of military power.

I think the Bush administration / Fed. knows what is going to happen, but of course won't announce this publically as it would lead to an even worse economical situation and more unrest among the US people.

It seems to be that more and more business people / companies and the government are preparing for such a situation. If I were a US citizen I would prepare myself as well, and not hold assets in US Dollars only.

bellaciao.org...

Bank Of America and Compass Bank managers (probably all other U.S. banks too) have been instructing their employees in the last few weeks on how to respond to customer demands in the event of a collapse of the U.S. economy - specifically telling the employees that only agents from the Department Of Homeland Security will have authority to decide what belongings customers may have from their safe deposit boxes - and that precious metals and other valuables will not be released to U.S. citizens. The bank employees have been strictly prohibited from revealing the banks’ new "guidelines" to anyone. (however, employees have been talking to friends and family)

Originally posted by Oilbourse2006

Actually I work in a building with Oil Prospectors, (Mediterranean Resources) and I happened to overhear a conversation they were having about this very topic, One person said that they had a financial advisor friend who advised to liquidate US assets and invest in Europe and the Far East. He said matter of factly that in a recent board meeting the subject had come up and it was a very dark subject and did not look good for the US economy, They were presented with facts showing the global decline of US assets and reserve currency, There have been a lot of market jitters this week as the Dow Jones took a dive, as did the rest of the markets, The problem is, is that even though the European Markets are reliant apon the US, This is offset by the potential growth provided by countries demanding only Euros for oil.

So Ahmedinejad wants to both demand Oil in Euros and set up an Oil Bourse traded in Euros, Chavez is contemplating the sale of oil in Euros as well as joining the Oil Bourse.

The general gist of the meeting *above* was of damage limitation, finding resources closer to home, Tapping the Gulf Oil and securing enough output for the next 10-25 years.People dont typically do this unless there is a direct threat of impending ripples regarding the Iranian Oil scheme.

So you may say Bring on the Oil Bourse, but I dont think you realise the implications.

Microsoft's Gates, World's Richest Man, Bets Against the Dollar

Full article: Bloomberg

Jan. 29 (Bloomberg) -- Bill Gates, the world's richest person with a net worth of $46.6 billion, is betting against the U.S. dollar.

``I'm short the dollar,'' Gates, chairman of Microsoft Corp., told Charlie Rose in an interview in front of an audience of about 200 at the World Economic Forum in Davos, Switzerland. ``The ol' dollar, it's gonna go down.''

Gates's comments reflect the same view as his friend Warren Buffett, the billionaire investor who has bet against the currency since 2002. Buffett said last week that the country's trade gap will probably further weaken the dollar, which fell 21 percent against a basket of six major currencies between January 2002 and the end of last year.

``It is a bit scary,'' Gates said. ``We're in uncharted territory when the world's reserve currency has so much outstanding debt.''

The U.S. is borrowing to finance record budget and trade deficits. Total U.S. government debt stood at $7.62 trillion as of Jan. 27, up 8.7 percent from a year earlier.

The country is importing more than it exports, and the government is funding part of its budget deficit by selling bonds to foreign investors, Buffett said in an interview with CNBC Jan. 19.

``Unless we have a major change in trade policies, I don't see how the dollar avoids going down,'' Buffett said.

Gates, holder of almost 1.1 billion Microsoft shares with a market value of about $29 billion, also owns about 3,580 Class A shares of Berkshire Hathaway. His personal investment vehicle has reported holding $3 billion worth of stock in 14 companies, including cable

[edit on 21-5-2006 by Mdv2]

It's funny how lurid threats of dirty bombs in US cities get more action than a credible concern like this. Good post.

i have some cash holdings i think i'll switch to euro's just to be on the safe side, the euro is stronger than the dollar right now anyway and should anything happen i could hopfully save some money that way

Just goes to show ya, don't trust no bank. Spend a few bill's to put a safe in your house. Keep your valuables there.



PS............ and somethin' to protect 'em with!

Bill Gates is a credible source. I had some doubts if the oil bourse would really cause a crash in the US dollar but Gates saying it will as erased those doubts. Interesting times ahead.

I may have something to add to this. I work in the IT department of an investment firm who deals primarily with communications. The company has 3 offices right now, NYC, London, and the home office in Providence RI. I've just been told to prepare for the closing of our NY office, and the opening of a Hong Kong office. This company is one of the most successful private equity firms in the business, and they've only been open for 15 years. I thrust them to know the way the tide is turning.

Interesting.

Edit: In the event of an economic crash in the US, how would people trade, buy food, etc.? Would it require some form of ID system that would give each individual the ability to "buy/sell"?

[edit on 22-5-2006 by Rasobasi420]

So would any budding economists care to predict when (if at all) the dollar will fall? Is it going to be a slow downward spiral or a complete, and imminent collapse similar to 1929?

If anyone could shed light onto what this might to do the British economy that would be appriciated. How does the saying go?...

"When America sneezes, the world catches a cold".

Originally posted by Rasobasi420
Edit: In the event of an economic crash in the US, how would people trade, buy food, etc.? Would it require some form of ID system that would give each individual the ability to "buy/sell"?

Say, like the 2008 Real ID that we are moving towards? Or maybe a chip?

Hearing this from Bill Gates, and on top of that the news source being Bloomberg, leaves that pretty interesting. Of course at the same time, is Bill Gates truly a master of finances? We see his net worth is insanely huge, but that doesn't necessarily mean that he is a super saavy man on the subject of money. I'm just asking, because I don't know. I thought he was just a computer man *shrug*.

Excellent thread though, Mdv!!!

Bill Gates is more than one man. Bill Gates is Microsoft and Microsoft can afford to hire the smartest, most savvy MBAs, financial geniuses on the planet. Bill Gates just articulates what they have told him. Calling Gates Just a computer man is like calling Howard Hughs just a pilot.

Personally I respect information from the corporate sector more than rosy propaganda from the government spokesmen. I can't really say I respect info from Wall St. either as they have their own agenda to TRY and keep the financial ball rolling.

I'm not ready to bail on the dollar yet but there are subtle indications that as Gates said,"she's goin down."

For the US to go from a buget surplus to the largest fedral debt ever should tell you something!!!!

[edit on 22-5-2006 by whaaa]

Originally posted by whaaa
Bill Gates is more than one man. Bill Gates is Microsoft and Microsoft can afford to hire the smartest, most savvy MBAs, financial geniuses on the planet. Bill Gates just articulates what they have told him. Calling Gates Just a computer man is like calling Howard Hughs just a pilot.

I just wanted to say, whaaa hit it directly on the head. In his book, The Road Ahead (Bill Gates), he goes into detail explaining why Microsoft became so succesful.

He fully realizes he is not the most intelligent person alive, what he does is surround himself with the most intelligent people he can possibly find and treat them very well for their opinion. That is one of the secrets behind Microsofts continued success.

Warren Buffet is one of the investment worlds most brilliant minds. His net holdings alone can financially affect markets, and MANY investors pay close attention to his opinion.

www.salon.com...
en.wikipedia.org...

He's not God, but if Warren Buffet, Bill Gates and other investment bankers and firms are saying concern is needed, then it is at least a decent idea to look a bit deeper into what they are saying and educate yourself.

I don't believe we will see a dramatic 1929 Black stock crash, I think the threat of a severe decline in the value of the dollar over a period of as quick as months is very real. The real danger comes if the world markets responds to a domino event like a move away from the dollar for international trades. It could begin with the oil markets, but expand to others - and that is when the value of the dollar severly drops and things begin to severely go downhill as the U.S. economy begins to grind down and default.

It's sad these kind of stories pop up more and more, it's scary. The dollar has already lost so much recently, and things don't seem to be improving at all.

Here's an interesting quote:

The central bank is an institution of the most deadly hostility existing against the Principles and form of our Constitution. I am an Enemy to all banks discounting bills or notes for anything but Coin. If the American People allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the People of all their Property until their Children will wake up homeless on the continent their Fathers conquered. ~Thomas Jefferson.

Its interseting to note that part of this is that the banks won't be giving people what is in their safety deposit boxes, which, apparently, has happened before.

He's not God, but if Warren Buffet, Bill Gates and other investment bankers and firms are saying concern is needed, then it is at least a decent idea to look a bit deeper into what they are saying and educate yourself.

Even if they are completely wrong, but take action, their action, because of their investments, could precipitate what they are taking about eh?

Nygdan - ABSOLUTELY, with the following caveat:

When the people that hold the money make moves, it affects economies. Thats a very basic statement, but its true - if the people holding their money in terms of dollars decide they no longer want to hold their assets in dollars in favor of another currency, the market will become flooded with people dumping their dollar assets. This destabilizes the currency and devalues the "purchasing power" of that currency (dollar in this case), if done on a significant scale.

The top 2 richest people in the world (Gates and Buffet) decideding to move their assets from dollar valuation assets to say, the Euro, WILL affect markets and the economy. Not to mention how many other investors would take their lead and follow - their influence from their opinion alone and actions to boot are not insignificant.

It's not so much that they could destroy the U.S. economy themselves, that is just silly. BUT if they and others begin a worldwide trend to move away from doing business in the dollar....well.

My advice .2c? Don't read this thread and make any decisions, don't read the paper or watch the news and think you understand where we are headed financially.

Read the financial papers, read the investment sites and get a feel for the reality behind the hype - educate yourself. Try to find sources outside the U.S. to cross reference with information you come across on domestic investment sites.


Search google for: investment news value of dollar
Buffett deepens dollar worries
IMF meddling India, dollar values affecting oil prices
Institute for International Economics - what is needed for the dollar to not de-value in face of currency movements in foreign markets

Read between the lines:Check out the Reuters and domestic news articles from the above google search.


[edit on 22-5-2006 by Violent]

I posted something on this awhile back, I do not trust banks at all.....I hate them in fact. IF you look at their business practices it turns your stomach.

I finally lossed it and closed my bank account withdrawling all my money when they told me they could continue to withdral money in the form of penalties until they seized what assets I had.

That just angered me and I will never use that bank again.....I have yet to reopen an account with ANY bank and am considering using the local credit union instead.

banks saying they will not turn over the assets to the owners is an ominous sign.

I have also heard many investors are investing their dollars in yen. I wouldnt invest in euros before yen, but that is me.

I believe the war coming against Iran is fueled by the banks for the explicit purpose of preventing an oil bourse.

Originally posted by Rasobasi420

Edit: In the event of an economic crash in the US, how would people trade, buy food, etc.? Would it require some form of ID system that would give each individual the ability to "buy/sell"?

If
The consequences for the US population would be catastrophic. If you are familiar with the situation on the mainland of Europe during WWII, you know shortages of almost every single product occurred.

The German occupiers therefore invented a coupon system, with which the citizens of the occupied countries could purchase butter, bread, clothes, and other products required to stay alive. etc. As supply still didn’t exceed demand, people were forced to exchanged their luxuries on the black market for food etc. In my opinion such a system would be necessary to prevent the people from dying.

Originally posted by Ishes

If anyone could shed light onto what this might to do the British economy that would be appriciated. How does the saying go?...

Source

It seems more likely that the British will have to go down with the sinking ship, for otherwise they will be shooting themselves in the foot by hurting their own London IPE interests. It is here noteworthy that for all the rhetoric about the reasons for the surviving British Pound, the British most likely did not adopt the Euro namely because the Americans must have pressured them not to: otherwise the London IPE would have had to switch to Euros, thus mortally wounding the dollar and their strategic partner.

At any rate, no matter what the British decide, should the Iranian Oil Bourse accelerate, the interests that matter—those of Europeans, Chinese, Japanese, Russians, and Arabs—will eagerly adopt the Euro, thus sealing the fate of the dollar.

Originally posted by Violent

I don't believe we will see a dramatic 1929 Black stock crash, I think the threat of a severe decline in the value of the dollar over a period of as quick as months is very real. The real danger comes if the world markets responds to a domino event like a move away from the dollar for international trades. It could begin with the oil markets, but expand to others - and that is when the value of the dollar severly drops and things begin to severely go downhill as the U.S. economy begins to grind down and default.

I actually think such a similar scenario might happen. Don’t forget the Asian crisis, were initially investors lost confidence in the Thai market and pulled out their capital. In no-time the Baht became a useless currency.

It all depends on China and Japan. They carry the debts of the US economy. As soon as more countries adopt the Euro bourse, those mass consumers will need bigger stocks of Euros, which automatically increases the value of the Euro, but in contrast devaluates the value of the Dollar. Investment in US assets would become less attractive, and thus China and other major (foreign) debtors will pull out their capital, which causes enormous inflation.

Besides, Russia, Europe’s main supplier of gas and oil trades it resources in dollars as well. They are either thinking of adopting the (Petro) Euro. I want to show with the use of this example what you already stated. It will have a domino effect, and not every single country can be prevented from changing towards the Euro, by the use of military force.




[edit on 22-5-2006 by Mdv2]

Seems Russia is to follow Iran in setting up it's own Bourse, see below:

globalresearch.ca

Such a large producer selling its oil and gas in alternative currencies is bound to impact the US Dollar.


mod edit, format link


[edit on 28-4-2007 by DontTreadOnMe]

The dollar might go down, can't say I want it to at all, but it might, then again it might rise back up, who knows. If the big guys are saying stuff like that, you never know.

But seriously, the American economy "crash!?" That does two things. A, if the American economy crashes, the WORLD economy crashes. The U.S. has the biggest economy on Earth, and it affects the world over. Secondly, there goes the world's biggest market as well. If the U.S. economy literally crashed, Japan's and South Korea's and Taiwan's and Europe's biggest market goes down the tubes.

China's economy is shot sky high, considering they rely on the U.S. citizens to buy all their "Made in China" products.

What the decline of the dollar would probably do is make it where the U.S. economy can't have as much adverse affect on other countries as it once did. No one knows totally, even the greatest economic guys have been wrong before, but in general I think that is what would happen.

Remember, countries will want to switch to the Euro to BENEFIT themselves, not crash the economy of their biggest buyer which would also have serious affects on them anyhow.

Also, not everyone believes that the dollar is in as much danger as the media makes out. If you read more of the article, Sephen Moore of the Cato Institute, says,"Those guys have been famously wrong in the past."

If you google the subject, there's lots of information from both viewpoints. However, remember one universal truth: the media writes to sell stories, not to report facts, and also, the media 99% consists of a journalist who doesn't have a clue as to what they're saying.

Since the big-shots are saying these things, especially Bill Gates, who in general doesn't seek publicity, I am inclined to believe the dollar is struggling, however, I also am not inclined to believe it is struggling as badly as the media claims.

Who knows, though, economics is a tough subject!

[edit on 22-5-2006 by WheelsRCool]

I've just been reading some opinions of US market analysists whom think the situation will only become worse.

Besides of the rising inflation rate and the ever growing trade deficit (twin dificit), there's another reason which will cause an even bigger devaluation: Carry trade.

Till recently, Japanese companies and investors were able to borrow Yens at a relatively inexpensive rate, and without many obligations. They were used to use the borrowed Yens for investment in the US economy, as US interest rates were high. This made US investment an attractive option to make swift profits.

However, now the situation seems to be changing, the Japanese banks are increasing their interest rates, making US investment less attractive.

Would the effect really be so huge?
According to several sources it certainly will be, hereunder you can read Money Week's comment on it.

Moneyweek:
The end of of the “yen-carry trade” could be devastating for capital markets throughout the world.

Update

Sir Harry D. Schultz, who writes one of the best newsletters, has been publishing his newsletter since 1954. A subscription on his monthly newsletter does cost you $300 per year.

In the most recent installments Schultz advises Americans in the strongest possible terms to make sure that they seek out a base, an identity, a house outside the U.S. Why? Because if America's financing becomes a problem, then it's going to immediately institute currency controls, and that means that it will no longer be permissible to take dollars out of the country. So there will most likely be two different dollar systems that will emerge. One dollar will be for internal use inside the United States, and the existing old dollar would be for external use. Those external dollars probably won't be worth anything anymore, so if you have all your money sitting in the U.S., then you're done for. The real insiders like Schultz, who advise the elite of the elite, they are now saying that you should pull your money out of the U.S. and then also establish a position, a second house, somewhere else. Meanwhile Warren Buffet has pulled half of his twenty billion dollar personal fortune out of the U.S.'

You'd better be prepared for it, more and more financial specialist draw the same conclusion, and not only in the US.

Edit: for people who don't know Schultz, he's the best paid investment consultant at US$2,400/hour—US$3,400/hour on weekends (International Edition Guinness Book of Records 1981-2000.)



[edit on 26-5-2006 by Mdv2]

Update:

LONDON, August 27 (IranMania) -

Iran's crude oil production has increased by by 55,000 barrels per day in the last one year, IRNA reported.

Vaziri Hamaneh added that daily natural gas production in the past year increased by 55 million cubic meters while in the current year the figure has exceeded 65-70 million cubic meters.

Pointing to the proposed Iran-Pakistan-India gas pipeline project, he added that the three countries have reached agreement about laying the 'peace pipeline' and the price will be fixed on the basis of gas exported to Japan.

He also said Indonesia will participate in a project to establish a refinery for liquefied gas products and memoranda of understanding for setting up new refineries in four countries have been signed.

Pointing to the dlrs 70-150 million investment required for Iranian oil industry, he said, "The Oil Ministry has drawn up plans for all oil projects and the macro-planning for upstream and downstream projects in oil, gas and petrochemical fields have also been worked out."

He added that LNG (liquefied natural gas) export agreement between Iran and India is not valid yet because it has not been endorsed by the Economy Council.

Describing Turkey as the best route for Iran's gas export to Europe, he said that the Noboko pipeline can transport Iranian gas to Europe.

He stated that Iran has experienced no failure in marketing LNG and global demand for Iranian LNG is two to three times higher than the production level.

The minister added the Bourse Organization of Iran has approved the establishment of an oil bourse and every thing is ready for its inauguration.

He said that Iran's production quota in OPEC (Organization of Petroleum Exporting Countries) is 4.1m to 4.2m bpd while the current level is 4.07m to 4.08 m bpd.

Vaziri Hamaneh said a plan for transporting Iranian gas to China via Pakistan is in the preliminary stage.

Full story

As became clear the last months, the willingness to support a US led campaign on Iran is not very great. It's not in the interest of most countries to support such an attack, as many countries benefit from the large Iranian fossil fuel stocks reserves. The decision not to support such a campaign is rather logical than satisfying the American Middle East agenda.

Iran is currently expanding the export of crude oil and LNG very rapidly in both directions, by constructing pipelines through Turkey, to export LNG to Europe, and in the Eastern direction, to India and China and [Indonesia?].

According to the Turkish press secret talks between the US and Turkey have been held to expand the military cooperation between the countries, which has been refused by Turkey.

A long term crude oil agreement have been signed by Iran an China, besides, Iran is China's number one supplier of crude oil, which clarifies why China doesn't feel much for sanctions on Iran. China's hunger for crude oil cannot be easily appeased, a war with Iran would I. limit the export from Iranian oil to China II. increase the oil price, and thus both have a negative effect on the Chinese economy.

India and Pakistan last week firmed up plans for a controversial $4 billion pipeline to transport Iranian natural gas through Pakistan to markets in India. And the U.S. turned up the heat by quietly telling Pakistan -- a major recipient of U.S. military and foreign aid -- that it could risk anti-Iranian investment sanctions if it allowed the project to proceed.

Source

According to other sources the Iranian oil bourse is set to open at the end of the month.