I began to worry about a coming dollar disaster and the implication of a global monetary collapse seven years ago. Before 2002 I was a dollar bull. I thought the US had the nerve, courage, energy and wisdom to repair the failing the system. However, over the past years I had to become more and more bearish. The one main factor which has held back an earlier dollar collapse has been the inherent weakness of the euro area and a wide-spread -- largely irrational -- mental aversion against gold. Both blocks are about to recede, the mental block against gold and the prevailing prejudices against the euro in London and New York. Now, we are entering the more dramatic phase of a global drama.
How will it end? The outcome depends as much on economics as on politics. Yet as of now there is no-one in sight who could serve as the savior of the US dollar. Worse: Ben Bernanke and Barack Obama, so it seems, are competing in their respective roles as gravediggers of the US dollar.
