Dan Schmeidler

Today in Commodities: Dollar Sets the Tone

Shoot! The above should read: "It appears ...". Sorry.

Today in Commodities: Dollar Sets the Tone

Thank you, Matthew, for your postings. At appears that China (and other economies with massive amounts of U.S. denominated reserves) are currently (the logical) willing buyers of Oil (in exchange for the greenback) at these levels. But these nations have (at least until recently) been mostly dependent on foreign economic growth (a la the "foreign" consumer) in order to spur their own economic growth. And until we see definitive proof that these nations can economically expand on their own, I would not be betting on continued higher commodity prices all across the board.

P.S. Love the new spell-check feature in the comment section. Thank you Seeking Alpha.

The Mighty Greenback Gets Some Breathing Room

Going to gold would appear to be the obvious choice considering the feds policies to support the financial system at the expense of the dollar. But one can not and should ignore that the credit crunch is now a global issue as a result of the US trade deficit getting substantially smaller. Gold right now is trading at the low 200 day moving average of $850. That average can be deceiving as a good entry point. Gold could easily fall below $800 and even further considering where it was in 2004 to 2006. Commodities are not hot market plays right now. And the dollar is on a rebound that could wipe out a lot of the losses it had against other currencies over the last year or two. It's insane to be thinking of that kind of market action in an environment of a collapsing US financial system. But it could very well unfold. Look at how the equities of the garbage US financials are trading as a desparate attempt to pump up their liquidity in order to restore the old status quo of the US as the great nation of debt. These are dangerous times to bet for a weaker dollar and stronger Gold.