Dollar Strong - Gold Weak
The U. S. Trade deficit for September set another record at $66.1 Billion. As the dollar strengthens, one has to wonder the basis for this confidence in the dollar. Eventually, we will find that such astronomical deficits do matter. However, for the time being, it seems that very few are concerned about this imbalance.
Richard Russell of www.dowtheoryletters.com, suggests that there are two reasons for the current strength of the dollar: (1) The higher interest rates make the dollar more attractive than some other currencies, and (2) Many people in the market are bearish on the dollar and this may have overloaded the investments on that side. The strength could be coming from these investors bailing out of the short side.
There also a deep rooted preference for the dollar by citizens around the world. After all, it has been for decades the reserve currency of the world. Nevertheless, there will come a time when the strength of the dollar is examined and found to be without sound basis. As always, the question is when? Your crystal ball is as good as mine. Only the Lord knows for sure.
In the meantime, gold and mining stocks are having a rough time. Gold has been pushing up to almost $470 and then falling back on almost a daily basis this month. It is currently at $466.20. We should be thankful that it has recovered from the mid $450s. DROOY, my trading gold stock, has been as low as $1.21 and almost to $2.38. Now it is trading at about $1.27. I tried to buy at the $1.21 low, but the order was not filled.
It seems that the rioting in France has lessened a bit this week. Thankfully, it appears to be disorganized and likely developing from the resentment of African and Islamic populations who feel they are not getting the breaks afforded other Frenchmen. Some have reported that it may come from deep rooted resentment from citizens from countries which were in the past part of the French empire. These have had a dampening impact upon the EURO which has been hammered by the strong dollar.
Have a great weekend! Do not neglect corporate worship on the Lord's Day. Take your thankful heart and mine to worship the Lord in the fellowship of His people.
Best to each of you and yours, Doug
Richard Russell of www.dowtheoryletters.com, suggests that there are two reasons for the current strength of the dollar: (1) The higher interest rates make the dollar more attractive than some other currencies, and (2) Many people in the market are bearish on the dollar and this may have overloaded the investments on that side. The strength could be coming from these investors bailing out of the short side.
There also a deep rooted preference for the dollar by citizens around the world. After all, it has been for decades the reserve currency of the world. Nevertheless, there will come a time when the strength of the dollar is examined and found to be without sound basis. As always, the question is when? Your crystal ball is as good as mine. Only the Lord knows for sure.
In the meantime, gold and mining stocks are having a rough time. Gold has been pushing up to almost $470 and then falling back on almost a daily basis this month. It is currently at $466.20. We should be thankful that it has recovered from the mid $450s. DROOY, my trading gold stock, has been as low as $1.21 and almost to $2.38. Now it is trading at about $1.27. I tried to buy at the $1.21 low, but the order was not filled.
It seems that the rioting in France has lessened a bit this week. Thankfully, it appears to be disorganized and likely developing from the resentment of African and Islamic populations who feel they are not getting the breaks afforded other Frenchmen. Some have reported that it may come from deep rooted resentment from citizens from countries which were in the past part of the French empire. These have had a dampening impact upon the EURO which has been hammered by the strong dollar.
Have a great weekend! Do not neglect corporate worship on the Lord's Day. Take your thankful heart and mine to worship the Lord in the fellowship of His people.
Best to each of you and yours, Doug
posted by Doug @ 9:26 AM
0 Comments:
Post a Comment
<< Home