SGM Metals: Qatar QIA Operator "Value of Money Will Go Down Very Soon w/ QE3"

Common sense seems to be surfacing as legitimate concerns of dollar destruction are being voiced. Conversations are no longer blissfully in love w/ the idea the FED is infallible & we can print fiat money indefinitely w/ out real world consequences.
LOOK! The FED is inflating the bank bubble again! All is good in the world again
LOOK! The FED is inflating the bank bubble again! All is good in the world again
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Oct. 9, 2012 - PRLog -- Reuters reports: [ - Wealthy Qatar, a major investor in U.S. & EU assets, worries that haphazard attempts by countries to shore up their economies could weaken the dollar & the euro, its prime minister said.

"What should happen is we should have a full package with a full strategy to solve the problems," Sheikh Hamad bin Jassim al-Thani, who also heads the country's sovereign wealth fund, Qatar Investment Authority (QIA), told U.S. financial broadcaster CNBC in an interview aired on Friday.

This month the FED announced a program of heavy purchases of mortgage-backed securities in an effort to boost employment, but the U.S. government has so far failed to reassure financial markets that it has an effective plan to cut its budget deficit & boost economic growth.

The ECB has also said it will buy bonds to protect economies from the euro zone debt crisis, but governments of weak countries such as Greece & Spain have not persuaded investors their debts can be cut to safe levels.

Sheikh Hamad said the central banks were right to act to prevent worse crises, but added: "With more printing money, without having a strategy, I believe the value of the money will go down very soon."

He did not give details of the economic measures which he believed Western countries should be taking, but said the risk of further volatility in markets was making investors such as Qatar cautious. Analysts have estimated the size of Qatar's sovereign wealth fund at around $100 billion. "There are some questions with no answer up to now," he told CNBC.

However, Sheikh Hamad added that Qatar would retain holdings of strategic stocks and buy when prices dropped, and that it would continue to make new investments in promising assets.

The gas-rich Gulf state has bought more than $5 billion or $6 billion of real estate assets over the last four to five months, mostly in the US & Europe, Sheikh Hamad said. "If there is some good opportunity, why not," he said of investing in crisis-hit Europe.]

The head of the very wealthy $100 billion ‘Qatar Investment Authority’, the sovereign wealth fund of the oil rich nation Qatar has stated the obvious, the consequence of the global currency war will be currency devaluation & it will come very soon. The verification of the global race to the bottom for currency values can be easily identified by simply looking at the price of gold in all currencies. Once you see this shocking display of currency devaluation you will quickly identify that gold is either at its all time high or within a mere 8% of its all time high when priced in every major currency on the planet! So if Mr. Bernanke was correct when he suggested that inflation is under 2% & poses no real danger to currency value, how can gold be priced at or near its all time high?

This is unequivocal proof of the fact that every central bank has been quietly printing their own currencies every time the federal reserve decided they needed to print money & gave it to their banker buddies or the White House decided they needed to bailout the auto industry, etc. Stated differently, if the FED was the only central bank printing money since the housing crash began then it would be the dollar in relation to gold’s value that would reflect all time highs & no other currency. Instead, the other central banks have also opted to print to protect their export markets from the fed’s dollar devaluation campaign & this is exactly why you see gold at all time highs or within spitting distance of it in every currency of the world & not just the dollar. This is a simultaneous global hyper currency devaluation that will be an equal opportunity wealth destruction campaign as it will reach into every single occupant of the planet’s wallet & remove ever increasing volumes of hard earned money from them as a consequence of the hidden tax of inflation.

There are very real consequences for every single economic policy that has been enacted over the past 4 decades since the gold window was closed, even though they have been very effective at hiding these consequences thus far but that’s all about to change. For example, in order to make publicly traded companies on Wall Street ‘appear’ more profitable without increasing productivity or sales (which is how a company would ordinarily become profitable) was to shift the economy to what is affectionately referred to as “ZERO SUPPLY SIDE ECONOMICS”. This model destroys the century old model of companies buying raw materials 6 or 9 months ahead of demand in order to shield their profit margin from price spikes that may occur in the calendar year. This was discarded for the modern incarnation that has these companies heavily exposed to volatility now because they only buy the raw materials they need for a 2-4 week period of production (if even that) so that these companies can hold the liquidity on their balance sheets that would have otherwise been allocated for the materials purchases. This new found liquidity on the balance sheet gives the false allusion of them being more profitable than they were before this shift in policy so that you think the company is a good investment. This also creates tremendous volatility where there traditionally wouldn’t be when an extreme weather pattern appears in the area of the raw material acquisition for an industry which provides exploitable opportunities for the high frequency traders to jump in a move billions of dollars in nano seconds in a stock your mom is holding in her retirement account for the long term. A real world example of this is the oil producers in the gulf when a hurricane comes barreling through & you see the price of oil spike as a result of this effecting the zero supply side model for oil refiners. This is why if even the threat of a storm appears you see this trade all of the sudden become the hot trade of the day when it never used to be a tradeable event. Consequences come from trying to cheat the system to create a profit where stability used to reside.

As more of these “funny accounting” policies of the past 4 decades are exposed (including the feds trick accounting of funding the US deficit, QE3 & fractional reserve banking w/ a fiat currency) the consequences will become deep & wide for the average Joe if they have not caught on & moved into hard assets. The globe is bracing for a hyper currency devaluation world where the prices of goods & services will rise beyond the scope of affordability for roughly 90% of the globes occupants & hard assets will become the most desirable goods on earth. If you are smart you will focus on hard monetary assets such as gold & silver bullion for your wealth preservation strategy. The big money will be made by those who capture the initial surge of ‘awakening’ to these truths when the first wave of panicked sheep break away from the herd & rush into the precious metals to offset dollar devaluation. They will believe they were the first people to figure this out & be quite proud of themselves for getting this price action in their favor. But the big bucks will be in the hands of those who didn’t require the herd to make the move to into gold & silver but did it because of their understanding of economics & a little common sense. Perfect example of my trademark closing line: It is a far better strategy to PREPARE your portfolio than to attempt to REPAIR it once the damage has been done. Traders make big money by identifying trends before they happen & getting positioned first which allows them to capture every single dollar worth of investors coming into the investment they made first. Have you ever got into an investment first? Have you ever been given inside information so you could exploit a trade for every dollar of profit it creates? There is a first time for everything! Join the sound money debate. Tick, tock.
Source:SGM Metals & The ELemental Economist
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