When the euro staged a brief rally the other day, we professed to have been vexed. Why, we wondered, should there be any euro buyers at all at these levels – currently around $1.20 U.S. – when even the village idiot knows the currency is on its way down to 80 cents or lower? Of course, it’s not the little guys who have been goosing the euro into fleeting rallies the whole way down, but rather the central banks. And their perspective is quite different from that of Joe Sixpack; for although Joe can once again fantasize about being treated like a high roller on the Champs Elysee, and of eliciting smiles rather than scowls from Parisian bellmen, cab drivers and waiters, the central banks of the U.S. and Asia see only a sovereign competitor stealing an unfair advantage over their own exporters.
However, we somehow doubt that the folks at Daimler Benz and BMW will see it that way. They and other domestic manufacturers have struggled to hold the line on prices as the euro nearly doubled in value off an 83-cent low almost a decade ago. Now, with currency values being driven by factors wholly unrelated to trade in actual goods and services, the Germans undoubtedly sense that the U.S. dollar will fare no better than any other paper currency over the long run. And so it must be unsettling for them to watch helplessly as the greenback ascends for no good reason, if only temporarily, while the dream of a federated Europe sinks with the euro.
Indictment-Proof
Assuming they understand this, it seems obvious that the Germans and their eurozone neighbors will sooner or later come to recognize gold’s primacy as money. They quite obviously failed to do so yesterday, however, sitting idly by as the Dark Side’s agents sacked Comex gold for a loss of more than $20. Such craziness will reverse direction eventually, and do so with a vengeance, but for now institutional mindset is steering much of the world’s surplus capital into dollar instruments. Although the bankers cannot possibly be so stupid as to believe it will end other than badly for the dollar, no one will ever be able to indict them for having pretended otherwise.
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Gold and Silver was sold off with everything, but sooner or later Europe will start buying it. They are broken. China just upped it’s holdings of US Treasuries. They will add more Gold as well. The Euro is in trouble, and just 1 year ago or so the Euro was a theoretical candidate to replace the dollar? Why is there doubt of US world dominance? BP loses a major oil field in the gulf, and the repercussions could mean stricter regulations and prohibition on offshore drilling, and still oil falls? Russia, the Middle East Oil States and VZ will be weakened. Did you see that Chavez just lost support of another leftist party and now he is calling them right wing. Europe is a prime example of another socialism failure. Hopefully the US politico system and voters see it is a doomed agenda. Hello, Greece to Obama and company. How are those recent elections working for you? California, quit boycotting Arizona, quit providing tax payer support for illegal aliens and amnesty cities, and get your debt under control and that goes for the rest of the 50 States.
I feel sorry for the legally documented and approved foriegn workers in the US. They should be rewarded for following the Rule of Law. How many hard working and legally documented and approved Mexican workers will be harmed if AZ companies lose contracts with other States hypocritical enough to boycott AZ, itself?
We need some tough love in the US, right now. State and Federal funding that supports projects outside of Emergency Services (police, fire, ambulance/emt), Education, Water, Power, and Transportation, should be seriously reviewed. Probably the US’ greatest asset may be it’s farmable land and food production. I agree on special considerations there, subsidies if you will, to retain what WILL be the gold of the future…FOOD.
Cut most Foriegn aid. Most is lost on corrupt governments and the aid never reaches the people. There are arguments that the aid actually causes more harm than good as it props up these corrupt regimes. The US is great, because the People made it Great through Revolution, and supporting men of Great Ideas. Thomas Jefferson should be a class offered every year from gradeschool on. This is what the US should offer the World and the people of the US should never forget.
The American Theme is Independence. As an American we should all strive to earn our own, be Independent and live Free. To live on the Gvt dole, and be dependent on it for our livelyhood , only makes us slaves to the Gvt establishment. That is not to say that we as Americans should not be charitable and help our fellow man, but we should be allowed to do it on our own terms and means, be it through our church, the Red Cross, The United Way, or other Local Charities.