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Currency War - It's On!

Well, almost.  Brazil, China and Germany shared concerns today about the FEDs printing press running overtime and Brazil in particular is prepared to be more aggressive suggesting a "currency war" is not out of the question. Germany and China are concerned that in spite of Geithner's attempts to mitigate the issue in a recent G20 meeting of finance ministers, the US is manipulating US dollars through the FEDs printing press.  A number of Asian countries are preparing a defensive strategy and the impact on emerging markets will be a net negative.

Wall Streets reaction is positive one, yet behind the scenes many are concerned.  Bernanke, however, seems to think he has the tools to fight inflation and sees the upsides as more important ot the increased dollar inventory more so than the downside.  Commodity values surged today with Gold hitting all time highs, oil at 6 month highs and sliver at mutlyear highs.  Gold is well on its way to reaching and exceeding $1400 an ounce before the end of the year.

Disclosure: Long GLD