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Gold/Mining/Energy : Gold Price Monitor
GDXJ 94.04+0.6%Nov 21 4:00 PM EST
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To: Lucky Lady who wrote (16528)8/24/1998 11:42:00 PM
From: PaulM  Read Replies (1) of 116764
 
LL, the reason the $US is strong is every CB on the planet has a stake in it. Whether they like it or not. That's why during an International Monetary crisis like the one we see now, the $ must be last to go.

I doubt it has much to do with the American economy or "faith"in the dollar. I doubt foreign "public" around the world are buying someone else's currency as a store of value, particularly when that currency fell from 240 yen to the dollar to 100 yen to the dollar only ten years ago. And particularly when a $ today is worth a nickel in the 60's.

Its the CB's that are buying. Asia and Europe have complained about the $ and America's "fiscal house" for 20 years. They've wanted out. But they know that to sell even 10% of their holdings or even fail to buy more $'s could mean the remainder of their holdings get decimated.

So every other currency is allowed to fall--and the commodity based countries especially suffer as a result of the strong dollar, cheap oil deals in the ME (what else is that expensive military hardware doing in S Arabia?) and gold leasing. Again, govt/CB stuff.

Anyhow, I expect Euro group is one block with the clout to avoid sacrificing itself to a $ that must collapse anyway. They will dump the $ ball and chain when they know the Euro is settled.

The dollar must remain until the Euro is in place. Once its clear the Euro has succeeded (or failed!!), watch the CB scramble for gold. It will be unlike any gold price movement ever seen.

I think if we understand what is going on the strong $ presents an opportunity. IMHO.
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