From Kaplans site....................
COMMENTS OF THE DAY: Commodities rose sharply on Wednesday, while precious metals rallied. Gold gained $4.90, silver surged 18.2 cents, platinum rose $5.00, and palladium soared $21.10. Bonds and the U.S. dollar declined sharply, both of which have a strong historic negative correlation with gold, since a small percentage of the money departing fixed income securities finds its way into precious metals. The U.S. Federal Reserve actively and openly sold dollars to buy yen. While dollar selling of this nature was common in past decades, it has been years since this kind of currency intervention was undertaken by the U.S. government. Obviously there is concern, well justified, that the market problems in Asia are spreading to the rest of the world, along with a soaring U.S. trade deficit that aggravates the financial situation. Intervention by itself, however, cannot accomplish fundamental economic realignment so long as the causes of the imbalance remain unresolved. I still believe that the only long-term resolution is for the U.S. stock market to decline sufficiently to discourage money flows into U.S. assets, thus causing a natural dollar decline which will narrow the trade gap and bring U.S. share prices closer to equilibrium with U.S. corporate profits and closer to equilibrium with other world stock markets.
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