Sunday, July 17, 2011

The Dollar's Last Stand

This week, it will be all about the strength in the dollar.  The debt talks will keep people wondering how the ceiling will be breached (as it has been already- justified by plundering public pensions, the question is if it will be officially so).  This will mean that traders will remain skeptical of their respective investments, and will seek a safe haven.  Gold has provided this immensely over the last few weeks, and although it is the safest trade in the long term, I think institutions will look to take some gains.  The problem will lie with the euro.  Europe is about to enter the house of pain now that Italia is on the chopping block.

Since the dollar will see a gain, it will be first silver and oil that take a hit.  Silver will test $35-$36 in a few days, and oil $96.  Gold will come down then, too, to its support of $1550, abouts.  Equities will see Dow 12k.  But this will only last a week or so, as the US will be the one to fall hardest.


  1. Terrible call right before a mega breakout.

  2. @Anon
    Not really - Oil DID drop,well below but is now finding support at 96 and just because PMs moving north today it would be extremely optimistic to expect not to retest and find where firm support lies. I;m inclined to like higher numbers but a retest WILL occur! (they ALWAYS do)

    I kind of see the debt ceiling deal AS (a form of) QE in that money must be created or borrowed in order to finance the gov going forward and topay back the billions borrowed these last few months. I think the market may take a bit to feel it -= but the tide of fiat money is still rising... not just in America either. IMHO

  3. Anon, I am glad you show up. Why stay Anon, when you come by so often? Could you not use a name, one we would recognize? Anywho, equities are right in line, and since I am long term uber bullish on PMs, I do not mind missing ONE run up.

  4. Tesla,

    Would you think if (when) the ceiling is raised then they will increase spening? What if they kept it marginally the same? Would that not be QE?

    I think that raising the ceiling will only put a floor under things, like our QE Light.