It is down but not yet out.
The once mighty US dollar flops around in the mid-70s like a fish out of water, gasping for it’s last breath. Like the Emilio, the goldfish (see link), it would be very easy for the powers that be to stomp the life out of it in its weakened condition but, if someone would be so kind as to pick it up and put it back into a bowl of water (or Global Liquidity, as the case may be), it might fully recover as soon as it catches its breath.
As noted by Gold and Oil Guy, Chris Vermeulen – “Most economists are discussing the possibility of a major decline in the value of the U.S. Dollar going forward as inflationary monetary policy begins to strangle growth. While that view point may prove right over the long haul, in the short run most traders are not likely expecting the U.S. Dollar to rally.”
Chris also has some lovely charts indicating that the Gold sector may be presaging a rapid decline in the price of gold and another that points out that the Russell and the Transports are clearly rolling over – something that was discussed in last night’s Phistockworld Wrap-Up Show:
Indeed Bill Gross’s comments are well worth a read and let’s not forget Mr. Ron Paul, who we discussed yesterday morning, who added yesterday: “It is important to understand the Fed’s role in creating today’s unemployment crisis, while also highlighting that high unemployment and low economic growth can persist even in the face of tremendous monetary inflation.” Wow, that was the topic of Monday’s special post – how timely we are getting! Robert Reich added to our conversation last night, saying:
Corporate earnings remain strong (better-than-expected reports from UPS and Pfizer fueled Tuesday’s rally). The Fed’s continuing slush pump of money into the financial system is also lifting the animal spirits of Wall Street. Traders like nothing more than speculating with almost-free money. And tumult in the Middle East is pushing more foreign money into the relatively safe and reliable American equities market.
It’s simply wonderful, especially if you’re among the richest 1 percent of Americans who own more than half of all the shares of stock traded on Wall Street. Hey, you might feel chipper even if you’re among the next richest 9 percent, who
…
