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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Mike Johnston who wrote (63540)	6/13/2006 1:28:50 PM
From: stockfiend	Read Replies (1) \| Respond to of 110194

Not only did they crack commodities, they corralled the fleeing money into safe-haven treasuries, which will in turn help offset the impact of their tough talk. Talk about a hat trick!

To: Mike Johnston who wrote (63540)	6/13/2006 3:08:03 PM
From: Claude Cormier	Read Replies (3) \| Respond to of 110194

It is not a gold crash but a very normal 50% retracement in a long term bull market.

To: Mike Johnston who wrote (63540)	6/13/2006 3:23:13 PM
From: gregor_us	Respond to of 110194

Very Interesting to See Markets React to FED in Textbook fashion. The dollar strengthens, just as it would in a textbook fight against inflation, as interest rates rise to attract global capital. Gold is sold, just as it would do once it sensed the FED Victory Lap is now on the horizon. T-Bonds strengthen, as though US govt fixed income will offer saftey and security in a slowdown. Again, from the dollar to govt bond yields to the forex space, asset movements all appear to be pricing in a garden variety slowdown, contraction of money supply, removal of either inflation or stagflation risk, and restoration of a Safe Environment for savers who use the USD as their base currency. I don't buy it for one second. Turning to the USD as measured by the USDX, or DXY, it's interesting to recall that the counter-trend reversals in the USD weakening trend over the past few years were coming when the USD had been a funding currency for spec/carry trades. Dollar strength now cannot, however, be from short covering, as it was during the 1-3% FF rate period. The USD has not been a funding currency for some time. And that is why the supposed "dollar strength" on the back of this Bernanke FED inflation scare looks weak to me. And it is weak. Were we facing the textbook situation, the dollar would have soared here. Instead it's managed to finally get above that ceiling of 85.00, to 86.46. Not that impressive. As someone said recently, the FED tightening into a slowing economy with current debt levels will ultimately draw a "no sale" response from investors being targeted by Pitchman Ben Bernanke. Despite the action right now, I think the signs are there in the tradign action that the promotion of the USD and T-Bonds by the FED tough talk, is nothing more than nod to the textbook. LP