China Warns about the Dollar

China Warns About The Dollar

(I know a lot of you saw this article already, but I am compelled to add my  2 cents, especially since the reader who has incessantly busted my stones over my bearish dollar call has disappeared)

When China speaks, the U.S. should listen:

Any appreciation of the dollar is “really temporary” and a devaluation of the currency is inevitable as U.S. debt rises, Yu said in a speech in Singapore today…Such a huge amount of debt is terrible,” Yu said. “The situation will be worsening day by day. I think we are one step nearer to a U.S.-dollar crisis.

Here’s the link if you have not seen the article by now:  LINK

This guy also goes on to say that “China should reduce its holdings of U.S.-dollar assets to diversify risks of ‘sharp depreciation…’” Essentially this is a statement telling the world that continued support of the U.S. dollar by China will be limited at best.  Translation:  the dollar is going a lot lower.

Make no mistake about it, even though the comment above came from “a former advisor to China’s central bank,” when the Chinese Government wants to make a policy statement, it’s usually done through “representatives” like this.

As per the graph below, you can see that the dollar has broken a head-and-shoulders chart formation, which usually implies much lower price levels are to be expected:

(click on chart to enlarge)
To be sure, the dollar is technically a bit “oversold” and can bounce at any time.  But the weekly chart is not reflecting an oversold condition, which means any corrective “bounce” will be brief.  Of course, this also means that gold and silver will going much higher.  Got any?
Source: http://truthingold.blogspot.com/