Quote:
Originally posted by davecummings@Dec 5 2003, 09:27 PM
With crude still in the $30+ range, instead of the $25-28 that I think we need in order to sidestep energy inflationary pressures, and with the ready availability of cheap dollars and low interest rates to spur our economy and corporate earnings thus possibly giving the FED reason to raise interest rates and shut off the printing presses, I predict considerably better days for the dollar by this time next year.
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You're right about the availability of cheap dollars, but no one is taking up the offer.
Look at the latest M2 figures.
M2 graph
the money supply has been decreasing lately. I don't really know what to make of it.
It's hard to see the USD turning around any time soon. The pressures on the current account are so high, there's the Iraq money hole, ther prospect of Bush 'buying votes', uncertainty over trade tariffs over textiles with China. Also the trend and general sentiment are against it
I hope the Fed start raising overnight rates sooner rather than later. With gold (an inflation hedge) over $400 there are some alarm bells on the distant horizon.