This video discusses whether the US Dollar downtrend is coming to an end:

This CNBC Asia clip discusses the US Dollar:

Dennis Gartman throws in his 2 cents on Fast Money:

If you want to learn more about Gold & Silver, check our new site: The Daily Gold by Jordan Roy-Byrne CMT.

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2010 Market Outlook Report by Jordan Roy-Byrne, CMT

The CBOE Volatility Index, or VIX, is up 10% today like a freak hot sunny day amidst winter. Recently, market volatility had calmed as investors became conditioned to expect bank failures, a Fed printing press, government subsidies, and high unemployment. However, today brought some surprises (and Wall Street hates surprises):

• Republicans smacked the cocky off the face of Democrats with Scott Brown’s Senate victory;
• IBM had weak revenue growth in yesterday’s earnings announcement after the bell;
• The US Dollar caught some buyers; and,
• There are reports that China instructed banks to curb lending.

Just when we thought we had the muddle through economy blazed in our psyche, that pesky thing called “the unknown” happened. If history is any guide, we should expect more surprise developments as earnings season continues and the media begins their 24/7 coverage of the mid-term elections.

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This chart from sentimentrader.com, shows that the speculators are more long than at any other time (and this dates back a while).  Now this isn’t necessarily bearish for the US$ in the short-term.  However, it means that when the US$ turns down again, it is likely to be a huge leg down as there are a lot of weak hands that will sell on any sustained weakness. The commercial traders (the strong hands) tend to be patient. They don’t bail on their positions easily. They were hugely short at the top in 2005, as well as a few months before the last top. Now they are more short than at any other time.

If you want to learn more about Gold & Silver, check our new site: The Daily Gold by Jordan Roy-Byrne CMT.

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Congressman Alan Grayson

This was one of our 10 Best Interviews from 2009:

In May, a cool and collected Congressman Alan Grayson questioned the Federal Reserve Inspector General about the trillions of dollars lent and spent by the Federal Reserve. Inspector General Elizabeth Coleman said she had no idea where the money went. Two months later, Congressman Grayson asked Federal Reserve Chairman Ben Bernanke the same questions. Here is the exact exchange:

Grayson: “So who got the money?”
Bernanke: “Financial institutions in Europe and other countries.”
Grayson: “Which ones?”
Bernanke: “I don’t know.”
Grayson: “Half a trillion dollars and you don’t know who got the money?”

As you can see, like Congressman Ron Paul, Congressman Grayson is one of the rare voices asking the most important questions on behalf of the US Taxpayers. Most importantly, Congressman Grayson understands the Fed’s secretive transfer of wealth from taxpayers to private interests as “The story of the millennium.”

If this sounds like the stuff of conspiracies, simply look at any chart of the US dollar and you can see it has lost over 95% of it’s value since the Federal Reserve was created in 1913.

I caught up with Congressman Grayson to better understand the problem with our Federal Reserve, the rising momentum for the Federal Reserve Transparency Act of 2009 (H.R. 1207), and how we can make the Fed more accountable to their four government delegated duties …

Damien Hoffman: Congressman Grayson, I recently penned an article called “Has the Federal Reserve Failed?” in which I looked at their four government delegated duties and concluded they simply have not done their job. What is your proposal to make the Federal Reserve more transparent and accountable?

Congressman Grayson: H.R. 1207 is one of the simplest bills imaginable. Unlike the healthcare bill which is over 1000 pages, H.R. 1207 is a page and a half. The bill lists the existing exclusion of the Federal Reserve from oversight by the Government Accountability Office (GAO) and allows the GAO — an independent body — to audit the Federal Reserve Bank.

The Federal Reserve Bank has not had an independent audit since it was created almost 100 years ago, and it needs an audit. Many times we have exposed gross acts of irresponsibility on the part of the Federal Reserve. So, we need to dig in and get details.

Just a few weeks ago, while Chairman Bernanke was testifying to Congress, we examined the Fed balance sheet and P&L statement only to find what looked like the Fed handing over half a trillion dollars to foreigners. This was very surprising! When I asked Chairman Bernanke if this was true, he said, “Yes.” When I asked him who got the money, he said, “Fourteen foreign Central Banks.” And when I asked to who did they give the money, he said, “I don’t know.” “I don’t know” is not good enough when you’re talking about $500 billion. That’s $1700 for every man, woman, and child in this country.

Damien: What is the status of the bill?

Congressman Grayson: I am very sure the bill will pass — possibly by the end of September, but more likely by the end of October.

Damien: Congressman, what do you say to the primary criticism that auditing the Fed’s book is like exposing confidential information which can lead to harm?

Congressman Grayson: The Fed made that exact same argument in court and recently lost across the board in the case of Bloomberg LP v. Board of Governors of the Federal Reserve System [U.S. District Court, Southern District of New York (Manhattan), No. 08-9595.]. The judge looked at the facts and noted that shining a spotlight on what the Federal Reserve’s actions will only be a good thing. So, that argument has been demolished based on the evidence.

Damien: Congressman, while we are waiting for a Fed audit, does anyone know what the Fed has been doing given that they have not fulfilled their government delegated duties as listed on the Federal Reserve website?

Congressman Grayson: They are performing a truly remarkable, surreptitious transfer of wealth from public to private hands. They are taking their ability to print money and shore up failed banks. They are simply stuffing money into the pockets of private interests.

In the case of the half a trillion dollars, they stuffed the money into foreign private pockets. In the case of another $230 billion, it has been tracked as a secret bailout to Citicorp in the US. The fact is the Federal Reserve continuously puts all of us on the hook for decisions they make to play favorites with private interests to the tune of trillions of dollars.

Source: Zerohedge.com

Damien: Congressman, what do you say to those who call your allegations a conspiracy theory?

Congressman Grayson: Something I found very intriguing was the Semi-Annual Report from the Federal Reserve to the Congress. That’s a mother-load of secrets if you read it very carefully and ask the right questions.

Since it looks like the Federal Reserve may soon be subject to the Freedom of Information Act, that opens many opportunities for the public to see the facts.

These are not conspiracies. The Federal Reserve’s own website has some incredibly interesting information about the general state of the US economy and the distribution of wealth in our country. I was recently reading our national wealth capped out at $62 trillion two-years ago has crashed to $50 trillion since. Those are Federal Reserve statistics on their website.

Damien: Congressman, I know you have another interview in a moment, so thanks for your time. I would love to follow up with you on this story sometime soon.

Congressman Grayson: Super. This is the story of the millennium. There are very few stories you can ever write about where the numbers involved have 13 digits in them. I look forward to staying in touch.

Our upcoming book will feature interviews with stars such as Jim Rogers, Dylan Ratigan, John Mauldin, Dr. Brett Steenbarger, Todd Harrison, and many more. To make a free reservation for your copy from our first printing, simply join our V.I.P. list below:

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This is a guest post by Denis Ouellet at News to Use.

U.S. economic data are firming up and numerous forecasters have admitted being surprised by the vigor of certain indicators. Speculators too are taking note. Using just-released data from the CFTC, we estimate that total net short positions on the USD stood at only $6.2 billion for the week ended August 15.1 Short positions have been trimmed by a whopping $20 billion in the last two weeks alone.

As today’s Hot Chart shows, this is the largest reduction since the summer 2008 when safe-heaven flows rushed into the greenback. What is interesting this time around is that interest in the dollar is not dominated by market fears; equity markets are holding up and credit spreads continue to tighten. In our view, current flows reflects the realization that the U.S. economy may actually outperform many of its pears in the coming months.

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Corey Rosenbloom, CMT, submits: “The market that has suffered most is that of the US Dollar (Index).  The Dollar Index began 1999 at the $95 Index level, rose prominently until its mid-2001 peak above $120… and fell all through the decade with the exception of 2005 and late 2008.  Price remains in a primary downtrend.

While the chart may look terrifying, in percentage terms, the Index is ‘only’ down 25% from where it began 1999 at $95, and is down 40% from its 2001 peak near $120.

Use this post and these charts as a reference for the 1999 – 2009 period when looking at how major markets have performed over the last decade.” (Source: Afraid to Trade)

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This is a guest post by The Golden Truth.

“There will be two social classes of American in the future:  those who sell their U.S. dollars today and buy gold and silver and those who buy into the false hope of an economic recovery.”

I suspect that there is a lot of factual information and news reports in this 30 minute documentary that most people who view this video have not seen.  Some of the best footage is of Congressmen grilling Banana Ben Bernanke under oath and his obvious discomfort with the questions and, for those who know the facts, his obvious lies.

“Eventually this dollar is going to stop working and everybody is going to know what poverty is all about.”

“Unfortunately, those who buy real estate this time around will get slaughtered.”

Consider this video as yet another huge warning shot directed your false sense of well-being.  And also consider that in Weimar Germany, over 80% of Germany’s citizens clung to the false hope of their national currency and held onto the (Renten)mark until it was completely worthless by late 1923.

Presented by the National Inflation Association:

“Those who cannot remember the past are condemned to repeat it.” – George Santayana, poet and philospher.

Consider that during the course of this decade, gold and silver have both appreciated well over 450% against the U.S. dollar.  This is without the benefit of perceived inflation and without most large institutions and small investors participating in the “stealth” bull market.  Imagine what will happen to gold and silver when serious inflation hits the system, as a result of the catastrophically reckless fiscal and monetary policies being imposed upon us by the Federal Reserve and our Government … GOT GOLD?

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This is a guest post by Prieur du Plessis.

With the US dollar falling down a precipice, spare a thought for non-US investors invested in US stocks and bonds.

The graph below shows the performance of US 10-year Treasury Notes since the beginning of March in both US dollar terms (red line) and euro terms (blue line). Whereas US investors are showing a poor return of -2.8% for the period, European investors are completely under water to the tune of -17.5%. For the year to date the figures are -4.8% (US dollar) and -10.5% (euro). (Although I am using the euro in this example, the same logic applies to most other non-US dollar currencies.)

The next graph illustrates the same principle for equities by comparing the performance of S&P 500 Index in US dollar terms (red line) with the same Index from the viewpoint of a euro investor (blue line). Whereas US investors have every reason to be very pleased with a return of +64.1%, euro investors are lagging quite far behind with +39.2%, which becomes more pronounced when compared to a return of 55.4% for the European Top 100 Index. For the year to date the figures are +22.9% (S&P 500 – US dollar), +15.6% (S&P 500 – euro) and +21.9% (European Top 100).

It is understandable that European investors are not ecstatic about the greenback’s slide and will keep having reservations about committing funds to US assets until they see signs of the dollar forming a bottom.

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On Monday night we posted Tyler Durden’s breakdown of the SIGTARP audit of the AIG bailout. Will this report resurrect the Fed Audit movement now that Ron Paul’s End the Fedbook release PR has died down?

I contacted Congressman Alan Grayson to see how some of our representatives view the jaw-dropping report:

“This audit report is a vivid illustration of the danger of secret bailouts that transfer public resources to private banks.  When all else fails, Wall Street can still stick it to the taxpayer.”

Congressman Grayson and I discussed Fed Transparency back in December. Since then, H.R. 1207 (the Federal Reserve Transparency Act) has been floating in the water. After reading the AIG Audit Report, if you don’t believe the Fed needs more transparency, your retirement account may continue floating in the water too.

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Yesterday, Federal Reserve Chairman Ben Bernanke gave a speech at the Economic Club of New York during which he declared interest rates would remain low for “an extended period.” Those who have been turning their “rising rates” theory into hard bets got crushed on the heels of Bazooka Bens remarks.

With the dollar losing more value and commodities attracting more investors, we take Bernanke’s comments to imply that “The trend is your friend.” By the looks at the chart of Gold ETF (GLD) below, inertia is in control:

Disclosure: GLD was the Featured Trade in the October issue of the Wall St. Cheat Sheet Premium Newsletter.

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