Posted on 04/21/2011 3:01:49 PM PDT by SeekAndFind
Weakness in the US dollar, which is causing everything to go up—including gas prices, food and stocks—is unlikely to go away soon as a selling frenzy hits the currency market.
The greenback is approaching pre-financial crisis lows and threatening to smash through its all-time low when measured against the world's predominant national currencies.
A combination of factors accounts for the weakness, with the Federal Reserve's easy-money policies, huge national debts and deficits and the consequential possibility of a debt downgrade because of the financial mess in Washington leading the way.
In short, as trader Dennis Gartman noted Thursday, "the rout of the US dollar" is in full effect.
"Panic dollar selling is setting in," Gartman, a hedge fund manager and author of "The Gartman Letter," wrote in his daily commentary. "This may carry farther than any of us dream of or, worse, have nightmares of."
How low can it go?
Rick Bensignor, chief market strategist at Dahlman Rose in New York, said the dollar index, which measures the greenback against a basket of select other global currencies, has scant technical support "that has any meaning" between its present level and the historical low of 70.70.
That's a widely shared view, even as currency pros wonder how the dollar could be falling against the euro considering the near certainty of sovereign debt defaults in smaller European Union nations.
Gartman described the dollar as being in "serious jeopardy" because of its status against the euro, which was defended recently as European Central Bank President Jean-Claude Trichet announced a rate hike in the zone.
No such defense is being offered in the US, where neither Fed Chairman Ben Bernanke nor most of the rest of the central bank's Open Market Committee seems much in the mood to raise rates despite the anemic dollar.
(Excerpt) Read more at cnbc.com ...
Can we agree that it is by design?
QE3 and QE4, will determine how low, interest rate should be about -.001, by that time.
The dollar can go lower and metals will go higher if it does. Gold is now at an all-time inflation-adjusted high, silver is not close.
Buy Ag.
Potter’s buying and so am I. :)
Not to mention the near certainty that those sovereign debt defaults might get a little help since we would hate to see something bad happen to that Euro, such a pretty currency.
Or the end of the commodity bubble whichever comes sooner. The dollar carry trade unwind and revaluation will be dramatic, and gold will not suffer too much, but silver will be hammered.
It's one reason gas is so high. Our dollar is not buying anything from overseas.
This is another example how the stimulus plan has backfired.
I doubt that any of Obama’s “Facebook” fans understand this when they fill up their tanks!
GRRRRRRRRRRRRRRRR
How low can it go??
If you’re not looking at all of your possessions with an eye towards their barter value, you’re a wild-eyed optimist...
;)
Oh, just wait for the next global “crisis” and the resulting “flight to safety”. Should be any time now......
Negative rates coming soon.
This is how Obama is planning to spend like a drunken sailor and then not worry about the bill: Let inflation pay off the debt.
Wno ends up holding the bag?
America's creditors and every responsible American that worked and saved for a nest egg.
We are now in the same position as a thrifty, hard working, German citizen in 1913 who had worked, his entire life, to save his hard earned nest egg, one hundred Mark note at a time.
Ten years later, 1923, his entire life's savings was not worth enough to buy him a single loaf of bread.
In 1923, burning your 1913 money provided more heat than the amount of coal that you could buy with it.
RE: Oh, just wait for the next global “crisis” and the resulting “flight to safety”.
The Most important question people want to know the answer to: Where’s this so-called ‘safety’ that people keep talking about?
Spend your money now on the things u will need to survive...ammo, food, gold, fuel.
bm
We’re still the tallest midget in the room......no offense to midgets.
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