RHINEBECK, N.Y., Nov. 19 (UPI) — A financial crisis will likely send the U.S. dollar into a free fall of as much as 90 percent and gold soaring to $2,000 an ounce, a trends researcher said.
“We are going to see economic times the likes of which no living person has seen,” Trends Research Institute Director Gerald Celente said, forecasting a “Panic of 2008.”
“The bigger they are, the harder they’ll fall,” he said in an interview with New York’s Hudson Valley Business Journal.
Celente — who forecast the subprime mortgage financial crisis and the dollar’s decline a year ago and gold’s current rise in May — told the newspaper the subprime mortgage meltdown was just the first “small, high-risk segment of the market” to collapse.
But from Kathy Lien, chief currency strategist at Daily Forex, some caution:
“Even though the US dollar fell to a new record low against the Euro overnight, the Euro failed to hold onto those gains. The currency pair’s struggle to sustain its upside momentum over the past three trading days has everyone wondering whether this is the top. Unlike the US, there are fundamental reasons behind today’s intraday reversal. For the most part European economic data was weak. Manufacturing PMI accelerated but service sector PMI deteriorated and French consumer spending fell by the biggest amount in over a year. ECB President Trichet also said that he is opposed to brutal currency moves while Airbus is complaining loudly about the damage of a weaker dollar. It is important to point out that Trichet did not call the latest move in the Euro brutal, but simply indicated his discontent with volatility in the currency markets in general. The pressure is heating up for the central bank president to do something about the currency but his reluctance to do so reflects what must be very strong inflationary pressures.”
And Sebastian Malloy at the Washington Post references that futuristic digital currency of Ben Steil’s I blogged a while back.
Update: Meanwhile, Goldman Sachs predicts the dollar will stage a come back in 2008. This is likely to be so for the short or midterm — but its likely to be go back down after that….the fundamentals argue for more decline…