Right off the bat, the market mover yesterday, as promised, was the press conference following the Fed meeting. We basically had all of the markets holding their collective breath until they were blue in the face just waiting for Ben Bernanke’s speech before they took a gasp of air. Once the rate decision was announced and Ben began speaking, the floodgates opened. By this, I mean wide open. It was like a dam had broken apart and swept the dollar right on down the river with no chance to get to higher ground.
[Read more...]China Makes Plans to Diversify Its Dollar Reserves
April 25, 2011 By Leave a Comment
The storms are building for the dollar, and the US economy, folks… There are a couple of things happening this week that could give us a clear indication as to which road we’re going to take… the Big Events Week! But first, while we were pounding down our Easter feasts, the Chinese were making plans to diversify their $3 trillion in reserves, and reduce their dollar holdings… Here’s the skinny…
[Read more...]Gold and US Treasuries: The Bulls and Bears of Fed Policy
April 11, 2011 By Leave a Comment
As we might have forecast, the government didn’t shut down. Gaddafi in Libya wants a ceasefire. And while another earthquake has hit northeast Japan, it doesn’t appear to have wrecked anything that wasn’t already destroyed.
And yet, silver has pushed to another post-1980 high. At last check, it’s $41.27. Spot gold hit an intraday record in overnight trading at $1,476.
[Read more...]Aussie GDP Prints Strong
September 1, 2010 By Leave a Comment
Front and center this morning, Australia printed a moon-shot second quarter GDP report, that has the risk aversion campers running for cover this morning. All currencies, except the risk aversion currencies of dollar, yen (JPY) and francs (CHF), are getting sold, and the Aussie dollar (AUD) has gained 1 1/2-cents!
[Read more...]Japanese Yen Hits a 15-Year High Versus the US Dollar
August 12, 2010 By Leave a Comment
I told you yesterday that the FOMC had set off some fireworks with their statements the other day, and those fireworks turned into a major sell-off in the risk assets yesterday… Stocks, currencies and commodities, all sold in a major way!
Stocks were down 2.5%, the euro (EUR) was down three whole cents, and gold lost ground… I would think that the 3-cent sell-off was a bit overdone… We'll have to wait-n-see… But there was good news for Japanese yen (JPY) holders… The yen hit a 15-year high yesterday, when it traded, albeit briefly, below 85… I was a foreign bond and currency trader at the old Mark Twain Bank in 1995, and I truly recall when yen was 85 in 1995… I have to say that, in some ways, those days are very reminiscent of today… Like investors flocking to yen when yields are non-existent and the country is wallowing in deflation and a rising national debt…
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The Economic Recovery Fantasy
Stocks went up yesterday. They’ve gone up so far, for so long we almost wish we had bought some.
But wait… Look at the stock market in terms of gold. Stocks have lost more than 75% of their value over the last 10 years – and they’re still going down.
Yesterday, gold went up again. So did oil. The sell-off we’ve been expecting is still in the future. But a sell-off is coming. Because this economy is still in a Great Correction; much remains to be corrected.
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