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The Always Precarious Dollar (and Its Impact on Gold)

Many people seem to forget the real reason behind the dollar rally from 1.36 to 1.14 and back to 1.25 just in the calendar year 2005. That reason was the congress allowed U.S. corporations to repatriate foreign profits and pay only 15% corporate gains tax instead of 35%. If you look at those sharp 5% reversals the 1st weeks of 2005 & 2006 it seems that those movements had to do much more with the 'calendar' than any shift in fundamentals. And Warren Buffett misjudged this important factor and lost some 2bn on his euro long bet in 2005, so don't feel deflated if you seem to be sinking short term.