Dollar Collapse

(interview with Dollar Collapse) -

Blogging

How long have you been blogging?

I created DollarCollapase.com back in 2004 to help market a book, ?The Coming Collapse of the Dollar? that I had co-written with GoldMoney's James Turk. Over time the site evolved into a general gloom-and-doom news site, and as most of the original dire predictions come true, traffic has been growing steadily. Now it's a forum for the ideas of a growing community of people who understand what's happening and want to help others protect themselves from what is clearly the most dangerous financial environment of our lifetimes.

What is the focus of your blog, i.e. how does it set you apart from the other bloggers out there?

The premise of DollarCollapse is that the world in general and the U.S. in particular are making the classic mistakes that have historically led to financial crises. But we're doing it on a vastly larger scale and with essentially unlimited currency printing presses. The end result will be a global currency crisis in which the dollar, yen, euro and most other paper currencies are inflated virtually out of existence, causing chaos in the process. The site is designed to be a ?one-stop shop? for news on this point of view, and a source of advice on how to protect your assets and actually profit from the transition.

What is it you hope a reader will come away with when they visit your blog?

A sense that as a society we're in very deep trouble and the mainstream media is clueless about how we got here and what should be done.

Do you like to be edgy in your posts and try and stir up some controversy?

It's impossible not to be controversial when you're predicting a crash of 1930's proportions and blaming virtually everyone from politicians to bankers to consumers to reporters and talking heads.

What do you think about bloggers who have this kind of approach?

I think if you have something interesting to say it's by definition controversial. If you're not offending someone then your point of view is already pretty well represented in the mainstream press and your time could be better spent elsewhere.

Do you think it being edgy gives you a boost in subscribers?

It limits your audience to those who ?get it? but solidifies that base.

Trading

Do you trade the markets? If so, when did you start to trade?

About thirty years ago, after reading ?How I Found Freedom in an Unfree World? by Harry Browne. Browne was a philosopher but also a ?gold bug? investment advisor. So I started buying gold mining stocks and some gold coins, just as that market took off. Turned a miniscule amount of money into a small amount. After that I was hooked.

What is your favorite instrument to trade (stocks, options, forex, futures, bonds, etc.)

The past couple of years I've been short financial stocks either directly or through LEAPS puts, and long precious metals miners (and more recently clean tech like solar and wind), generally through their shares and ETFs.

What is your favorite strategy to trade?

Sell a put on a stock I'd like to buy at a lower price. When it goes down the shares are assigned to my account and I get to keep the put sale price, which lowers the effective purchase price of the stock.

What time frame do you like to trade?

That's something I'm wrestling with. The market is so volatile that it's hard to avoid taking profits when shares spike, but this creates a big short-term capital gains tax bill. Writing the IRS a check is excruciating. I'm experimenting with option strategies to minimize taxes.

For someone new coming into the markets, what steps would you recommend they use to get started?

Be very cautious. You'll have to discover for yourself how hard it is to invest successfully, and you'll want to minimize the cost of the discovery process. Set up a good discount brokerage account (I use OptionsXpress and recommend it highly) and spend a couple of years reading everything you can find on your sectors of interest and investing very small amounts. Like I said, you'll find out that markets can't be timed, no matter what your brother-in-law says.

What is the biggest stumbling block you see for most beginner traders, i.e. where do you see them making the biggest mistakes?

Getting overexcited. Once a trend is in place betting on a continuation looks like easy money, and it's tempting to bet big. This is a bad idea. Some trends are your friend and some aren't. You'll need experience to tell them apart.

In today's trading environment, where do you see the biggest opportunities for traders?

Volatility will be huge for the next few years, as the deflationary effects of a global financial collapse collide with the inflationary impact of governments running their printing presses flat-out. Hot sectors might be precious metals and clean tech, which will benefit from all that new money.

2009 Forecast

What do you see in store for the markets in 09?

Maybe a temporary bounce once the new administration firms up its stimulus plans. This will last until interest rates start to rise due to a falling dollar. At that point the real crisis begins. So, after a possible brief rally, the worst is yet to come.

Do you use technical analysis?

Not really, though the COT (commitment of traders) report is a good short-term indicator of gold and silver prices.