On The Outside Looking In - Indicators ShowThe US Dollar Is Getting Weaker

The Federal Reserve Prints It

The chart below says exchange rates may have a clue as to why the paper dollar is less valuable day to day. If the indicators I am presenting here on this blog are right, you will see prices on the rise more so than in the past as the stock market continues to hit new highs, bitcoin on the rise, and the beginning of gold / silver breaking out as well.

When I moved to Argentina in 2000, the dollar/peso exchange rate was one to one. The government devalued the national currency in 2001 and later converted all dollar denominated savings to pesos, stealing one fifth of saver's wealth, then the snowball rolled on down the hill. At that point, we began to see publication of the "official" exchange rate for buying and selling dollars. Banks set requirements for changing "purple paper" to "green paper", and the the black market for paper was born - "El dolar blue".

Over the last 15 years, I have watched prices rise, sometimes 50% higher week to week, for example: a jar of instant coffee in the beginning of 2001 was $9.90 on the first of the month, going to $15.00 on the fifteenth of the month and on upwards. Currently, a jar of instant coffee is $95.00. When the cashier says "that will be ninety five pesos, I put the money down and say 'nine-fifty, here you are." No matter what happens, prices always go up and never retreat here in Buenos Aires. The price to buy dollars always has always gone up as well. That is until now.

Below is a news site that I check daily because I have waves of people who want bitcoins. They come holding funny-munny so I need to know how to change bitcoins to dollars to pesos. Bear with me for a moment as I explain what it is and how it has changed. The six categories of paper pricing are:

Official - Black Market - Soy

Wholesale - Liquid Cash - Stock Market

Most deal using the "blue dollar". The reason being that the dollar is worth more if you can just hand someone pesos, get your dollars, and walk away in less than a minute without having your ID checked, your purchase scrutinized, wait until your pesos are approved, etc. (yes it is that bad here - it was actually worse). Compra and Venta mean nothing more than the profit margin that the bank or or currency exchange makes.

In order to sell one bitcoin, I need to first price it in dollars, then convert that dollar figure to pesos. Last month, a u$d 1000.00 bitcoin was worth about ar$17,000.00 - for the sake of round numbers, but that is changing. Today, if I were to sell a bitcoin - and I might, I still would get ar$17,000.00 but only because bitcoins are selling for u$d 1054.00

The premise of what I am saying is - The cost to buy dollars has continually risen over the last 15 years, prices have also never failed to rise during that period. If the cost of a dollar, here in South America is decreasing, then the value of the dollar must be decreasing. The reverse is also true. Those in the U.S.A. will likely see higher prices each time they go to the store. Yes, jaw dropping increases that never retreat. If this is the start, it would never let up - as here in Buenos Aires.

Argentina will be where Venezuela is within one to two years. Where will the dollar be in a year? The graph below is showing a downward trend - and that has never happened before. As the graph goes downward, the buying power of the dollar is closer and closer to becoming worthless like the peso!

It's All Just Paper

Paper has no value. How we feel about one paper rectangle or another should not be relevant. It is, after all, paper. The ink used is not important. For now, these paper rectangles are nothing more than the sanctioned means of payment. The question is should you hold it? One day - as happened here - banks will close, your paper will be trapped there and you will only be allowed to take fractions out per day. Search Greece in the news today. What are they doing? Lining up every day to get paper rectangles out - best you not leave it in. Let's talk metals.

Gold is holding steady at just over $1200 per ounce. Silver however is breaking out a bit as seen on this chart from Kitco.com. Prices for metals, many agree, are highly manipulated with paper contracts ruling the day. I have been buying kilos of silver for the last three years, but I recently switched to gold because gold is somewhat stagnant. This is just my way of doing things. I buy the bottom and accumulate silver, gold, dash and Steem when the price is down. I just powered up several times over the last week and will continue doing so.

On the Outside Looking In.

I am on the outside looking in. Looking at the U.S. economy from South America, looking at the Argentine economy from the sidelines, out of the banks, out of the system, and invisible. In my objective opinion is that those holding paper will lose, and those holding digital numbers on a corporate banking site will be lose even bigger.

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