Quote:
Originally posted by wig@Dec 4 2003, 06:56 AM
Okay, what do you think about the US Dollar at this level (89 handle on Dec dollar index)?
Who is bullish / bearish?
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Bearish.
Dollar has several things working against:
1) The Federal Reserve has been creating money hand over fist and pumping it into the Banking System (see:
http://www.economagic.com/em-cgi/data.exe/...fedstl/day-mzm) -- increasing the money stock like this devalues the currency.
2) Know, as we all know, the central banks of the world are doing everything they can to ensure they will never have to go back on the gold standard -- after all, fiat money inflation is the best way to steal from citizens. Russia, miraculously, seems to be bucking this trend and actually buying reserves. In that effort, they have been dumping gold and leasing out gold reserves at below the market rate of interest to keep the price of gold down. But, look at the price of gold -- people in the know are already hedging against the impending, inevitable inflation.
3) There is talk that OPEC will switch to the Euro from the Dollar as the medium for exchange for all oil transactions. This would significantly reduce the demand for dollars, and the supply of dollars being what it is, the price of the dollar would plummet.
The dollar is gonna get creamed (more than it already has).