Coelacanth

You Can Get on the Gold Train and Ride the Dollar

Chux08,

Did you fall hook line and sinker for Jim Rodger's advice to "dump the dollar and get long gold"? You do know he's been long gold for 10 years now right? How's his advice working out for you lately?

It's pretty clear you're not a trader. Did you really believe an over-valued euro was sustainable? How intense do you think images of people in emerging countries rioting over food prices had to be before there was the will to ease the pressure? Do you really believe there would be any airlines left in a year from now at $146.00 barrel oil?

What you're seeing is the pent-up capitulation of unsustainable global macro-economic imbalances. That's o.k. though.....I'm sure you've been "buying gold on dips" because you know all this nonsense about a stronger dollar will blow over eventually. Better to be right than to make money though right?

Is the Price of Gold Artificially Depressed?

No....you're not seeing things. Gold is dropping.

Has the Dollar Bottomed?

German consumer confidence at a 5 year low, Euro-zone & German June PMI reads all below 50 (denoting a contraction of manufacuturing), German Business sentiment IFO reads dropping below the psychologically important 100 mark, Industrial output for the euro-zone falling 3 months straight, French consumer spending falling off, etc.......many economists out of the euro-zone are now saying the EU block probably contracted in the 2nd qtr. (As a reminder.....the U.S. hasn't experienced negative growth yet)

One could argue that between the euro & dollar it's a "battle of the ugly ducklings" at the moment but it seems clear to me, despite all our troubles that are pretty much all priced in to the buck by now, that the euro is wildly over-valued relative to the dollar and yen given their medium term fundamentals.

It won't be a straight line but don't be surprised to see the euro around the 1.45 - 1.50 handles in 6 months to a year.....if even that long.

U.S. Dollar Shaking Off Risk Aversion

wyosteven,

On balance I would have to agree with Ms. Lien.

In addition to defense spending, non-defense capital goods, excluding aircraft rose 1.4% after a decline of 0.1% in May. Shipment of these items rose 0.7% after a 0.2% gain the month before.

Clearly the numbers reflect more than military spending and suggest U.S. factories are holding up due to increased exports overseas. If you want further proof than check out 2nd qtr. & 3rd qtr. results of companies like Caterpillar and Monsanto.

The World's Revenge

Amazing how someone can turn a forum on currenices into a partisan issue. The author of this thread couldn't care less about currencies.....he's just looking for another venue to spew his hack partisan views.

You should go to a political forum.