Talking Up & Down The Dollar

With all the talk of dollar’s demise as the globe’s reserve currency you would think it would devalue its worth against other currencies.

You would also think that if the dollar is falling due to its trashing by the IMF chief and the World Bank, treasuries and other US notes would sky-rocket on the yield curve.

Yet all the talk I cited above of a cratering dollar is true, but none of the consequences have come to pass. It’s all very curious to me.

The greenback as measured on the Dollar index against a basket of other currencies is at a week high. And gold is off some six dollars since the shorts took out the $1,000 an ounce mark on last Thurs. monthly expiration.

I know this may come as a shock to some, but there are forces within the markets that are skewing the responses to such news from week to week.

At one point during the week the dollar is falling and gold and stocks rise, then they don’t without any news to dislocate the trend from continuing.

Record offering on Uncle Sam’s debt has only driven the yield lower on the ten-year even though participation is dwindling.

Just to be safe, we have Bill Gross from Pimco saying he is a buyer of long notes to hedge deflation to reinforce the mirage.

For more on Wall and Washington and the economy see:


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