Oldtent Archives 2007 - 2008

Rate cuts will hammer dollar: Chinese official

Flight of capital seeking higher returns in Asia could depress dollar on further rate cuts, China says.
December 27 2007: 7:28 AM EST

BEIJING (AP) — Further cuts in U.S. interest rates would have a “harmful effect” on the dollar and the international finance system, a Chinese finance official wrote in a commentary Thursday in an official newspaper.

The dollar’s fall against many currencies has prompted investors to sell dollar-denominated assets, Hu Xiaolian, director of the State Administration of Foreign Exchange, wrote in the Financial News, a newspaper published by the central bank.

“If the (U.S.) federal funds rate continues to fall, this will certainly have a harmful effect on the U.S. dollar exchange rate and the international currency system,” Hu wrote.

Financial markets closely watch official Chinese comments on the dollar because Beijing keeps a large portion of its $1.4 trillion in reserves in U.S. Treasury securities and any change in China’s investment strategy could affect exchange rates.

Despite his warning, Hu wrote, “the U.S. dollar’s dominant position in international currency markets is unlikely to change in the near term.”

The U.S. Federal Reserve has lowered its federal funds rate, the interest that banks charge each other for overnight loans, to 4.25 percent, a full percentage point lower than it was in September, to ease a credit crunch in the U.S. financial system.

Chinese officials have said that cutting the rate could encourage investors to move money to Asia or elsewhere in search of better returns, which could depress the dollar.

…..way to go….great stuff….keep us posted

There is only one thing certain in the financial market world … the only 100% certainty I have ever come across when it comes to the markets: if there is a crisis of any sort, gold will not be allowed to go up very much. The Gold Cartel will sit on any rally and then take it down in the short term. Under NO circumstances is gold allowed to be seen as a go to crisis investment. IF gold does run in the very short term, it is then taken right back down the following day.

Can there be one clear thinking person left in the world who still doesn’t get it? (Please keep in mind the mainstream gold world have few clear thinking people … the leaders in the gold industry are collectively the most pathetic group of men in the history of corporatedom.) Oil was staring at $97 per barrel this morning, the euro was up .80, and Ex-Pakistan Prime Minister Benazir Bhutto was assassinated, making civil war a real possibility in a nation which possesses a nuclear bomb.

On all of this gold (following a significant technical breakout) goes up $4, and after a blink it is down on the day. Silver, which was clearly capped later yesterday (as mentioned), then is taken down 11 cents. The HUI stares at its downtrend line, then it too goes down on the day.

Gold and silver should have rocketed. It is always the same: SHOULD HAVE. I am as sick of writing this as you are reading about it.

From a couple of Café members EARLY today:

“how ridiculous the Cartel has become. The good news is there can be NO DOUBT now that thousands around the world are finally starting to see what we see as well. When a critical mass of such people is reached, which should be very soon, they will attack the gold shorts like sharks in blood-infested waters. Cannot believe they even have another quarter left.”

“As I was listening to CNBC explain gold’s $4 rise, I said to myself, what will they say when gold goes down on the day in the face of the assassination? Haven’t heard anything yet but I’m sure there will be an explanation forthcoming.”

***

touche’ lol

There is a large family in North Alabama that is absolutely wild for Ron Paul.  They almost singularly  constructed 2 floats and entered them in 14 parades in North Alabama.  They are the Wahl family and have a home business called wisemen trading ( http://wisementrading.com/ ).  I had the privilege of helping a little bit and drive one of the floats.  My son and two of my girls rode in several of the parades. 

http://www.youtube.com/watch?v=Fxo05S5noOY&feature=user  2 floats and 14  Parades

http://www.youtube.com/watch?v=Yull456uFYw&feature=user  Building the floats.  I procured the trailer and yes that is my veggiemobile pulling it.

 http://www.youtube.com/watch?v=RqZHbmiN68A&feature=user  Water skiing on Christmas day for Ron Paul

you can take the smell off of gold,

the manure will grow roses ,

but the smell that lingers is the aroma of a crook…

Burma Shave 

you can take the smell off of gold, the manure will grow roses , but the smell that lingers is the aroma of a crook…

I just hope those guys are bettin their BS.  Couldn’t happen to a nicer bunch! 

……..I read a comma after the 4
……..It was a decimal point
………which is the difference between 4.5 Trillion and 4.5 Billion
………think about that ..
………a comma vs a period…..
……Digital Money is so cool that way…..

…..On the other hand.there is no mistaking the difference in 4.5 tons and 450 tons of gold..
…..it’s pretty obvious that difference …..
……which is another good reason Gold is “Better” money than electrons

…..

Does have a smell about it — but — it is so much fun to post these articles when idiots are talking their book - wishing - hoping — praying!  Kinda like all those articles with the calls for the bottom in real estate for the last six months - ain’t no way - but these guys are out here spreading it around.  Time will tell, but I think Ment is going to need a bigger WAGON! 

That article smells like Ment’s wagon. 

the manure wagon lement would of could of should of..

Dec. 27 (Bloomberg) — The dollar is poised to end a two- year slide against the euro in 2008 as government-backed funds in Asia and the Middle East purchase U.S. assets, currency strategists say.

The currency will gain 4.4 percent to $1.40 per euro by the end of the third quarter, according to the median forecast of 43 strategists surveyed by Bloomberg News. The dollar is down 9.8 percent this year to $1.4638 per euro, after weakening more than 10 percent in 2006.

“Sovereign wealth funds are getting cheap deals by buying some of these bombed-out assets,” said Gerry Celaya, chief strategist at Aberdeen, Scotland-based research company Redtower Ltd., whose $1.23 per euro forecast is the most bullish. “The U.S. economy is resilient and good at clearing out all the dead wood and bouncing back, and the dollar will follow.”   

http://www.bloomberg.com/apps/news?pid=20601109&sid=aLHODVxKIpuc&refer=home

With gold’s recent performance, the metal really deserves a daily site all its own. I’m showing a rather unusual monthly gold chart below. What we see here is the profile of gold’s powerful primary rise from 250 to its current level of 829, The trick here was to sit tight, ignoring all the uninformed chatter — and ride the bull. I’ve done everything in my power to get my subscribers to do just that, and from e-mails I’m receiving I gather many subscribers have taken my advice.

But the reason I’m showing this chart is the panel at the bottom of this chart. The line you see here is the 12-month rate-of-change. And as you can see, the rate-of-change has been steadily but subtly heading higher. The rate of change is now 27.98% on a 12-month basis. However, somewhere ahead, I believe gold will be moving into its third speculative phase. At that time I expect the rate-of-change to rack up new highs as gold surges higher in chunks of 15, 20 and 30 dollars a day.

A lot of late-comers to the gold stocks are frustrated and disappointed. I think the gold mining stocks are going to work out all right. It may take gold at a new high or even above 900. The leverage is still huge for the mines — as long as gold continues to rise.

The monthly chart below shows the erratic and tricky ascent of the gold shares as seen in XAU, the Philly gold and silver average. Those who bought the gold stocks back in 2000 when I first advocated buying them, those people who held on are to be congratulated. Because, as you can see, this has been one wild and wooly bull market. And it’s far from over.

The recent correction in XAU hardly shows on this chart, and, of course, one reason is that this chart deals in percentages. What to do now? The same thing I’ve advocated, grip the arms of you chair, and hold on, brothers and sisters — hold on.

“Fans” — On the near term, I’m showing the GDX exchange traded fund for the gold shares. What we see here is the “fan principle.” From a central point, draw three trendlines, each shallower than the preceding. At the point where the item breaks above the third most shallow of the three fanlines — that identifies the reversal to the upside. I think we may have seen the turn to the upside for the gold shares.