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Gold/Mining/Energy : Gold Price Monitor
GDXJ 109.23+3.7%Nov 28 4:00 PM EST
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To: Rarebird who wrote (67319)4/7/2001 9:16:15 PM
From: Hawkmoon  Read Replies (1) of 116779
 
Why am I dreaming? The DXYO dollar index is compared against other currencies, not gold (at least I don't believe it is). Thus, if foriegn economies are heavily impacted by a US slowdown, I see no major reason for the dollar to make major decline against the other currencies it is compared against.

And we're seeing capital flight from overseas markets as Bob Johnson's link so aptly noted.

The US has a tremendous amount of additional financial arrows left in its economic quiver. We're still running a surplus while many other nations are running deficits to spur their economies, or facing more oppressive demographic challenges due to their declining tax base and aging population (since the US imports new citizens/workers so our tax base remains more stable). So in the worst possible scenario, I won't get worried about a meltdown in the dollar until the US deficit spends on a much more massive scale and fails to re-ignite the economy.

And I almost have the gut suspicion that AG is trying to force Japan and Europe to carry more of the global economic burden, and thus his unwillingness to over stimulate the US economy, even if it requires a recession here at home.

And I agree.. that the rise of the USD cannot continue forever. But it will rise until foreign currencies stop declining against it, or US interest rates decrease so much that dollar denominated assets are non-competitive against other interest bearing assets.

But all I'm asking for is a trading range.

Regards,

Ron
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