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Politics : Welcome to Slider's Dugout
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From: SliderOnTheBlack8/6/2006 8:00:00 PM
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The Death of the Dollar has been greatly exaggerated.

re: Trillions trump Billions.

It seems that many goldbugs seemingly ignore the rather vested interest of literally Trillions of dollars of investment have in the US Dollar -- "not" cratering.

Just a week, or so ago... the head of currency trading for either Goldman, or Morgan was on CNBC and Joe Kernan asked -- "do you know ANYONE who is bullish on the US Dollar?"

...and after a pause, the analyst answered -- No.

And that's my point.

Here is a chart since Jan. 1 2004 for the US Dollar.



For the last 2 1/2 years virtually every goldbug and every market pundit has called for the "imminent death and collapse of the US Dollar."

...but, it won't die.

It's supported near 80 and sold around 90...and has been for the last 2 1/2 years.

Think about this...

Just how do foreign Central Banks unload the massive amounts of US Dollar reserves they presently hold -- without literally shooting themselves in the head (not the foot -- THE HEAD)?

And what's the alternative?

A gold standard?

Calling mr. blue... (he's the guy who has been holding his breath since 1981).

The Yen?

The Euro?

A Basket of what.... other less productive economies, other equally debt laden fiat currencies?

It's too late to "dump" dollars.

The Dollar is in a very well supported and very well managed trading range.

Central Bankers are in the process of "re-balancing" the global economies.

Gold sounded an alarm and Central Bankers actually listened.

Steve Forbes has had a good handle on gold for the last few years.

Early on... he called for the Fed to monitor the Gold price as a barometer to the level it should reflate the US Economy.

Forbes called for a reflation to the $450ish level for Gold.

And re-flate the US Fed did... along with a little help from our friends at the BOJ....but, they over did it on the upside.

Now Forbes is calling for the Fed and global CB's to once again use Gold as a barometer on how far to tighten and remove speculative excesses from the market.

Do you think maybe... just maybe... there is a chance that they also might "over do" it on the downside?

Another specious arguement is Central Bank manipulation of Gold.

When you think about it... isn't that just part & parcel of a free market in gold?

When Central Banks dumped gold in 1999 -- it's "manipulation" ?

But, if they buy gold here today... it's not ?

...think about the irrationality of that for just a minute, or two.

Also... given the rather abysmal timing of Central Bankers when they sold Gold... why should their "timing" on buying be viewed any better than what it was when they sold?

I think in reality, Gold has been more "free" than many give it credit for.

And I'll repeat my earlier tome:

Gold did it's job here of late -- did you do yours?

SOTB
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