Interesting combination of news and opinion this morning.
1) It's official now, the US entered recession a year ago. Ordinarily, such news should give the market a shot in the arm, as it would mean we are closer to the end of the recession than the beginning. That the market did not, or has not responded, signals that it does not believe we are in a typical recession.
The Nation Bureau of Economic Research, however, estimates that the recession will be quite severe, but only lasting into mid-2009. Again, it appear that the market doubts what (to me) looks like good news.
2) Jim Sinclair today put out his opinion that the Fed (via the Exchange Stabilization Fund) will shortly mount an attack on the dollar, as their last trick in their bag of tricks to fight deflation.
As many of us know, the dollar is quite overvalued anyway. Once it begins it's inevitable fall, all metals will benefit, particularly the PM's. And, December looks to be a critical month, given the loosely coordinated plan to demand delivery on December gold contracts, and an official desire for a weaker dollar.
Kind'a odd to, huh? People like Steve Forbes seem to think that one of the best remedies for the economy is a strong dollar, but he is thinking about less government spending, lower taxes on corporations, and higher interest rates to encourage savings. Such is not the Democratic way, though, is it? |
