Changes in Preference for Dollar?
The Financial Times of London reported a drop in Net Foreign Purchase of Securities (NFPS). The November amount was $91.6 Billion and December was $56.6 Billion. The trade deficit for December was $65.7 Billion, so that left a shortage of over $9 Billion. The purchase of U.S. Treasuries was down $18.3 Billion. The drop was primarily from Asian central banks and those of the oil Mid-East. China and other Asian banks have indicated that they will manage their reserves more closely. Does that mean less purchase of our securities? We will have to wait and see.
Industrial production was down 0.2% and capacity utilization was down 0.3% for January.
In the face of these negative reports, it seems that Big Ben's Report to Congress encouraged the dollar bulls who pushed the dollar a bit higher. One comment is that Big Ben does not use as much Greenspan speek. He speaks with more clarity which provides more understanding to the audience. We will have to see if his actions follow his words.
Meanwhile, gold has languished in its correction. For the last seven days, the high just over $550 was briefly touched two times and the low has been around $540. For the last 24 hours, the high was $544.50 and the low $535.40. It is now at $538.40. DROOY has traded from $1.38 to $1.47 and the last trade was $1.45. I made an additional purchase at $1.46 yesterday. The price looks good to me! You study and see if it is right for you.
The general market in terms of the DJI has been a bit above $11,000 for the last day or so. Were it to stay above and move much higher, most would say that is a good sign. There is much uneasiness among investors domestic and foreign (as was explained in the opening paragraph). This is negative for markets. Some of the uncertainty must come from the saber rattling over Iran.
Adding to uncertainty are those in Congress who are pushing for sanctions against China. This is in spite of the fact that we are dependent upon China and other Asian central banks for purchase of our debt. China now holds in excess of $800 Billion in reserve. Any substantial dumping of these dollars would send the dollar into the toilet. Of course, it is to foreign advantage to slowly replace dollar reserves to prevent a substantial loss in value. However, sanctions against China could cause a negative reaction.
As usual, we are faced with an unknown future. I am glad that the future is totally in the hands of the Sovereign God of all. Were it in our hands, we would make a mess of it. I often wonder if some of our individual and national sins are not the result of God's giving us over to our own devices as reported in Romans Chapter One. We must give Him the glory and be thankful to Him in all things.
Best to each, Doug
Industrial production was down 0.2% and capacity utilization was down 0.3% for January.
In the face of these negative reports, it seems that Big Ben's Report to Congress encouraged the dollar bulls who pushed the dollar a bit higher. One comment is that Big Ben does not use as much Greenspan speek. He speaks with more clarity which provides more understanding to the audience. We will have to see if his actions follow his words.
Meanwhile, gold has languished in its correction. For the last seven days, the high just over $550 was briefly touched two times and the low has been around $540. For the last 24 hours, the high was $544.50 and the low $535.40. It is now at $538.40. DROOY has traded from $1.38 to $1.47 and the last trade was $1.45. I made an additional purchase at $1.46 yesterday. The price looks good to me! You study and see if it is right for you.
The general market in terms of the DJI has been a bit above $11,000 for the last day or so. Were it to stay above and move much higher, most would say that is a good sign. There is much uneasiness among investors domestic and foreign (as was explained in the opening paragraph). This is negative for markets. Some of the uncertainty must come from the saber rattling over Iran.
Adding to uncertainty are those in Congress who are pushing for sanctions against China. This is in spite of the fact that we are dependent upon China and other Asian central banks for purchase of our debt. China now holds in excess of $800 Billion in reserve. Any substantial dumping of these dollars would send the dollar into the toilet. Of course, it is to foreign advantage to slowly replace dollar reserves to prevent a substantial loss in value. However, sanctions against China could cause a negative reaction.
As usual, we are faced with an unknown future. I am glad that the future is totally in the hands of the Sovereign God of all. Were it in our hands, we would make a mess of it. I often wonder if some of our individual and national sins are not the result of God's giving us over to our own devices as reported in Romans Chapter One. We must give Him the glory and be thankful to Him in all things.
Best to each, Doug
posted by Doug @ 8:57 AM
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