Front and center this morning, G-20 Finance Ministers are meeting in Paris, and it looks like the early leaks of what’s going on is responsible for the currency and metals rally this morning. A plan to deal with Europe’s debt problems has been hatched. The outline of the plan has deeper losses on Greek bonds, higher bank capital levels and increased firepower for bailouts, and the IMF. And it sounds like Eurozone leaders will meet next week to iron out the devil in the details, and put this to bed.
[Read more...]The Greatest Trade of All Time
August 23, 2011 By Leave a Comment
On its way to becoming the world’s greatest superpower, the United States pulled off some truly remarkable trades.
Two notable transactions come to mind and were both outstanding bargains.
- The Louisiana Purchase (purchased from the French)
- Alaska (purchased from the Russians)
What Didn’t Change When Nixon Cut the Gold Link
July 27, 2011 By Leave a Comment
“Let me lay to rest the bugaboo of what is called devaluation,” Richard Nixon told his fellow Americans on August 15, 1971.
The 37th President had just announced the US would “temporarily” close the gold window – ending the convertibility of Dollars into gold that had been key to the postwar Bretton Woods system.
[Read more...]Strong Chinese Economic Data Turns the Tables
July 13, 2011 By Leave a Comment
Well… I have some thoughts on the price action yesterday, and then there’s news from China with their latest economic data, which should explain a lot of why the currencies have rallied back versus the dollar, and gold heads for its all-time record high… So, let’s get this letter out of the starters blocks!
[Read more...]US Trade Deficit Takes on a Life of its Own
June 9, 2011 By Leave a Comment
The week of “non-data” here in the US continued on Wednesday, with the markets searching for a clue as to which direction to go, and the only news they had to work with was from Greece, which didn’t bode well for the currencies, yesterday.
But the lack-o-data ends today, with the Weekly Initial Jobless Claims, and… The April US trade deficit… This trade deficit has taken on a life of its own, in that we had a recession (I call an ongoing depression) and a financial meltdown, which one would think would bring this trade deficit in line… But NOOOOOOO! That’s not happening, folks, and why? Ahhh grasshopper, this has been discussed so many times in the past, but the point here is that the manufacturing in this country has gone the way of the Pony Express… Sure, it still exists, and in some countries would be great! But for a country our size, it has wasted away in Margaritaville! And it’s not enough to offset the imports…
[Read more...]US Dollar Declines But Stays in a Tight Range
May 11, 2011 By Leave a Comment
The dollar slipped a bit against most of the major currencies yesterday, but moved back up overnight and most currencies are right where they were when I hit the send button yesterday. Both the Japanese yen (JPY) and Swiss franc (CHF) traded lower yesterday as gains in the equity markets and commodities gave investors a bit more confidence in the global recovery. The euro (EUR) rose yesterday, but traded back off in early European trading as German Chancellor Angela Merkel suggested she may make it difficult for Greece to get more help. The bounce in commodities helped push both the Canadian (CAD) and Australian dollars (AUD) up a bit, and the British pound (GBP) rallied after inflation expectations were increased.
[Read more...]Why High Oil Prices Are Likely Here to Stay
April 12, 2011 By Leave a Comment
A number of forces continued to push oil prices higher last week, reaching their highest levels in the U.S. since September 2008.
US and Chinese Presidents Trade “Ideas”
The goings-on this past weekend were something. Every time I would pull up the news, I would find more quotes and statements that would potentially move the markets come Monday morning… One of the big ones was our president telling the Chinese: “Enough is enough”… Oooohhhh… I bet the Chinese are shaking in their boots… Look, I’ve talked about this before… You know the “biting the hand that feeds you” thing… Does the administration (and lawmakers) truly believe that China will not get ticked off, and choose not to attend the next Treasury auction? What happens if they do? Well, we all know what happens, as I’ve been through all that before; but let’s just pretend that will never happen, that’s best you know, stick our heads in the sand, and forgetaboutit! NOT! That’s not going to happen as long as I have a laptop and an Internet connection!
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