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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers
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To: SouthFloridaGuy who wrote (1938)11/16/2005 10:26:30 PM
From: kacy_in_LA  Read Replies (1) of 78418
 
My short answer is to your conundrum is that expected inflation is exceeding the short-term interest rate cost of carry by an amount that exceeds the strength in the US dollar. In other words, the dollar is strengthening because there is the expectation of continued economic growth and profits (and hence fed "measured pace" tightening relative to the other CBs), but the rise in short-term interest rates are not expected to keep pace with inflation at this time. Its a variation on the "Fed is behind the curve" argument.
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