Another Day, Another Dead Dollar

Thought For The Day

On Friday, Citibank posts a $5.1 BILLION loss, but it's not as bad as expected and the stock market goes up 200+points.

This morning, Bank of America posts a $1.23 BILLION profit but its 18 cents a share worse than expected and the stock market is down to flat.


So, it's better to buy stocks in companies that lose money but do better than the experts predict, than to buy companies that make money and do worse than the experts predict. Hmmm, what would Warren Buffet do?


Another bizarre day for the Precious Metals: The Dollar gives back 2/3 of it's gains from Friday, Oil hits ANOTHER record high above 117 and Gold is flat and Silver gets taken to the woodshed?


I think a key factor in the short term is the Euro. Traders are absolutely reluctant to take it through the 1.60 level. To date, as soon as the Euro clears 1.5950 the bids disappear, the Dollar catches a bid and the Precious Metals get sold. It's all very mechanical, and somewhat amusing. The G7 is powerless to stop the fall of the Dollar. Their jawboning may slow it's decent for a few days, but it will do nothing to save it from it's demise. The Bull in any market is going to do the best it can to throw as many off it's back as it can. 953 Gold and 18.50 Silver remain our breakout targets. A move thru 1.60 in the Euro could set off a cascade of events in these markets that will be a wonder to behold.


The May Silver contract is in the process of being rolled into July this week and could keep a cap on Silver until late in the week. Gold is presently at the mercy of the timid Euro traders. Today's move higher in Oil should have had the Gold Bulls squeezing the COMEX shorts without mercy. Irrational behavior to be sure, but who ever said the Precious Metal markets, or any market, are supposed to act rationally?



Bob Chapman, The International Forecaster
What everyone keeps forgetting is that bond prices are at 50-year highs due to plummeting rates of interest that are destroying the dollar. If the Fed keeps lowering rates, speculation and inflation will get worse, and gold will soar. But if they start to stabilize rates, or to raise them to support the dollar, bond principal will get cremated and a goodly portion of those many trillions of dollars in bonds will flee in terror and find their way to precious metals as a safe-haven and inflation hedge.
http://news.goldseek.com/InternationalForecaster/1208412540.php


USDOLLAR REBOUNDING… NOT !!!
The USDollar has been trying to rebound for a month. With growing federal deficits, widening trade deficits, an underwater banking capital core, and rising homeowner negative equity, the US financial fundamentals resemble a banana republic on four primary pillars, unworthy of any currency rebound. Look for a breakdown to 70 and below in the next several weeks. The downtrend is stronger than any newly formed basis for a bottom bounce. The impact on gold will be to send it over the 1000 level again, this time as floor support for the summer advances. The next USFed rate cut could be the impetus. A game of chicken is being played by the Euro Central Bank, which refused to cut rates since last summer.
-Jim Willie CB
http://news.goldseek.com/GoldenJackass/1208358000.php


There are no markets anymore, just interventions
What other agency of a democratic government could get away with the principle that was articulated on national television in 1994 by the vice chairman of the Federal Reserve, Alan Blinder? Blinder declared: "The last duty of a central banker is to tell the public the truth."
http://news.goldseek.com/GATA/1208711352.php


40 Years of Inflation, 80 Years of Dow/Gold
IF WALL STREET STOCKS can surge 160 points on falling earnings, an 11% drop in housing starts, and a 16-year record for consumer-price inflation, then so can everything else that doesn't carry a picture of George Washington.
http://news.goldseek.com/GoldSeek/1208357744.php