That sounds like the sanest way to go, but I've got less of a stomach for timing this instrument. I've tried and failed around four times entering LT positions at 920 and 980 in the past so I'm just glad enough to get a good avg price to wait for a rollover after a trend line violation. Or a top or volume blow-off. But your call gave me the balls to buy into that horrid sell off -- thanks!
Is it reasonable to buy the out contracts ... say June '10 instead of the Dec. '09 in order to roll them less often. Or is there a way to roll them at lower cost. Seems to me many who think gold is a reasonable investment (as opposed to a trade) intend to hold for years not months
Reinstate the constitution, restore the republic, bring back sound money, abolish fractional reserve banking, abolish the FED, abolish the two party system, bring back US troops from abroad, ... Just a few actions ( with possibly disastrous short therm repercussions) perceived as necessary by those 'hoping' for a collapse as they view the curent route the USA is on as unsustainable and ending in total disaster anyway. Somethimes societies have to be willing to take a huge hit so their grandchildren will enjoy a better live. Ofcourse this is all theoretical jibbering, nevertheless I could understand why some would actually be in favor of happening what I described before and I wouldnt judge their motivation as being more flawed then that of those hoping for the system to survive in it's curent form.
He never said the dollar was going to zero vs the euro. He would probably say that all fiat currencies will approach zero value relative to real assets, and that the dollar is currently on the fast track, with the euro close behind. Also, Faber never implied that the dollar would under perform the Zimbabwe currency, although he stated that he was 100% certain the US would experience hyperinflation. I agree that this is a ridiculous statement, but has no relation to your proposed wagers.
1. When talking about exchange rates (and that is what he's doing) then one currency imploding vis-a-vis another exchange rate automatically means the other currencies are going to the moon. Without further clarification it would mean the EUR/GBP/JPY will go parabolic (vs. the USD). Like Cutten said, e.g. $10 per EUR. That is what Faber is saying and it is complete non-sense, let's say over the next 10 years. Faber knows that but he is more interested in shocking headlines rather than boring the audience with e.g. "The purchasing power of the USD and all other fiat currencies for consumer goods and commodities will continue to be eroded" -- because that doesn't catch as much media attention because it's too much common sense. 2. http://www.bloomberg.com/apps/news?pid=20601110&sid=avgZDYM6mTFA "U.S. Inflation to Approach Zimbabwe Level" Prices may increase at rates âclose toâ Zimbabweâs gains, Faber said in an interview with Bloomberg Television in Hong Kong. Zimbabweâs inflation rate reached 231 million percent in July, the last annual rate published by the statistics office. He said US inflation should approach 231 million percent. If that's not sensationalist then I don't know what is.
You did not listen to or understand the interview. Faber was talking about the value of the dollar, not the exchange rate. The value of a currency is determined by purchasing power, which Faber is saying will go to zero. Given a long enough time horizon, he is 100% correct. Faber also points out that other currencies are not much better than the dollar. Your second point proved my point (brilliant debating tactic). He said the US inflation will 'approach' Zimbabwe's. Meaning the USD and ZWL could never reach parity, hence cutten's bet makes no sense.
I agree I disagree with this interpretation. As hofficita suggested, although it should be noted that Faber didn't specifically state ("zero" against real assets) either.
It is called hyperbole. Like when the goldbugs say gold is going to the moon. They don't actually believe it is going to go to the moon. They just expect it to apreciate considerably.
I call it sensationalist marketing. He has a product to sell (newsletter and appearances) and he needs headlines.