Up, up, she goes!

[caesar]

Well of course it is but that will take time but for other reasons than the price of a dollar.

[maplesyrup]

Gold matches 16-year high as dollar nears euro low

I wonder what this week will bring us in currency, oil, and gold values. For those who want a lower Canadian dollar it sure does not look like a good beginning to the week. But you never know, as you could always win the lottery!

/676

[Guest eureka]

One facet that has not come up yet is the probable positive of improved productivity that should result from our stronger currency.

The cheap currency has sheltered us from our productivity deficiency in the past (it is often the reason for devaluation of a currency). We will now be forced to introduce efficiencies and innovation.

There are certainly going to be industries that will suffer for some time. The long run should be highly beneficial.

[maplesyrup]

Canadian dollar is back at it again, up almost 3/4 of a cent today.

The price of gold is up $3.50 an ounce as well.

As Canada continues to record surpluses, such as the one announced today, I think we are going to see our Canadian dollar continue to rise.

Don't think I want to purchase any of that Nortel stock though.

[maplesyrup]

The price of crude oil has dropped quite a bit, and is moving into the $45. per barrel range since its high of $55. per barrel during the last week of October, 2004.

December delivery crude on the New York Mercantile Exchange was down 26 cents at $46.61 US per barrel in late-morning electronic trading in Europe after falling to $46.53 earlier in Asia.

This is quite a drop in a very short period. I guess all that bloodshed in Iraq is paying off for Big Oil and the US economy. /725

[maplesyrup]

THE THREE STAGES OF A US DOLLAR COLLAPSE

Interesting to note that the three stages are:

1 - Gold/Silver to Outpace Foreign Currencies

2 - Gold/Silver to Outpace the Base Metals

3 - Silver to Outpace Gold

Our bearish views on the United States Dollar have been formed over years of watching what we view as reckless and incredibly shortsighted policy decisions by the Federal Reserve. The chief culprits of this attack on the greenback have been none other than Alan Greenspan and his band of merry sheep spearheaded by Ben “Printing Press” Bernanke and Bob “Lever up & Buy an SUV” McTeer. We have never been shy about our belief that the most likely outcome to be spawned from the monumental current account deficit, trade deficit, and other enormous debt imbalances in our country is a sharp and severe devaluation in the U.S. dollar. Globally, holders of dollars will seek to diversify into other assets. We have seen a bit of this as the dollar index peaked in 2001 at over 120 and has since dropped to 84.

Wow! When you think about it, that's one heck of a drop, 30% since 2001.

[maplesyrup]

This seems a little bizarre:

Europe pleads with US to bolster dollar

[kimmy]

This seems a little bizarre:

Europe pleads with US to bolster dollar

It's not bizarre. It's straightforward. When the biggest spender hasn't got as much cash to throw around, it's bad for business. Everybody understands the concept, except apparently you.

-kimmy

[maplesyrup]

There goes gold. Up again over $4. at the moment today.

kimmy....you need to chill man, it's only money!

What's bizarre are the European Bankers comments.

[maplesyrup]

Gold Rises to 16-Year High; US Dollar Falls to Record Against Euro

Looking at the gold charts, the momentum is for more of a rise in the price of gold. It has been a long time since we have seen these prices. Hummm.

[Guest eureka]

If the US does not take steps to bolster ots currency, look for action by Europe to lower the Euro - lower interest rates. Look for China to sell off its dollar reserves and debt ownwership.

Look for big trouble for the US that will make even Bush and Rice understand that the world does matter.

Don't sell the US dollar short just yet. That opportunity has passed by.

[Cartman]

As a left-wing proponent, let me play right-winger (devil's advocate) for a change.

Uh uhmm...the free market should decide dollar values and governments should not intervene because anything government does is inefficient, wasteful and probably oppressive. At this time of job losses, we should cut taxes which support the unmotivated because taxes support laziness. If the dollar drops or rises, you should be happy to take advantage of it! Anything detrimental like job losses are simply "market corrections" and are inevitable. You should ensure that you are in a competitive industry or have competitive skills. People in such industries will not suffer job losses, but if they do, they should be able to easily find work in countries looking for them.

If you do not have a competitive education, one can always be obtained from student loans at low interest rates. Did you know how many times most people will change careers? Constant learning is the lesson. People are treated too well by the welfare state in Canada. If you or your family have not realized the potential of investing conservatively in the marketplace, then you really have only yourself to blame. Remember, people in third world countries are poorer than are you.

[kimmy]

(what was that all about? did I miss something?)

There goes gold.  Up again over $4. at the moment today.

kimmy....you need to chill man, it's only money! 

What's bizarre are the European Bankers comments.

I'm sorry, Syrup, but I'd rather be right than chill.

So, what do you suppose is driving up the price of gold? The Gnomes of Zurich?

The cheap currency has sheltered us from our productivity deficiency in the past (it is often the reason for devaluation of a currency). We will now be forced to introduce efficiencies and innovation.

Is "Efficiencies and innovation" codespeak for "Downsizing and outsourcing"?

-kimmy

[maplesyrup]

kimmy.....time to roll up your sleeves and get to work.

Just work 8 hours a day, and sleep 8 hours a day, and you will do fine, as long as they are not the same 8 hours.

[maplesyrup]

Conservative financial prowess:

Enactment would raise the government's borrowing limit to $8.18 trillion

And you wonder why the US dolla is sinking like a stone.

[Guest eureka]

Unfortunately, the initial reaction of business may well be "Downsizing and Outsourcing." That, though is not productivity.

We could be forced to make better use of technology: better use of brain power: and better attention to the R & D that we don't do now. Canada is a laggard in these over recent years when the currency has enabled us to drift and to allow the Americans to do the brain work for us.

[Cartman]

Only in Canada do we complain when we do too well.

[Guest eureka]

Unfortunately, we are not doing too well. The euphoria over the rising dollar is misplaced. Over the past 25 years or so Canada's economic performance does not compare favourably to most of the developed world, including, I am loath to admit, the United States whose own performance is not great.

We are riding a wave that is heading for the beach, of high commodity prices and the sinking US dollar. The fundamentals in Canada may be quite sound now but they are not exploding into a sea of prosperity. Canada is still in relative decline. Most of this can find its roots in the Mulroney years when no effort was made to stem the decline that started a few years before him. Instead we got a phony Free Trade that gave us nothing but a reduction in our ability to do the things we needed to.

Canada may be a wonderful country to live in for its social cohesion and tolerance: it is not so wonderful in its realtive economic performance. That poor performance is, as much as ideology, the root of the failures to alleviate poverty and to address the needs of health care and the military among other desirable objectives.

[August1991]

I'm sorry, Syrup, but I'd rather be right than chill.

So, what do you suppose is driving up the price of gold? The Gnomes of Zurich?

Uh, if the US dollar is going down, and the price of gold is quoted in US dollars, does it not make sense that the price of gold will go up?

Also, is it not ironic that "European Bankers" want the US to do something so that the euro is not worth so much?

We could be forced to make better use of technology: better use of brain power: and better attention to the R & D that we don't do now.

eureka, doesn't new technology lead to redundancies and unemployment? In fact, I think that's the whole purpose of new technology - to eliminate jobs.

Uh uhmm...the free market should decide dollar values and governments should not intervene because anything government does is inefficient, wasteful and probably oppressive.

Cartman, I'll play the leftwing advocate:

The government should decide dollar values and we should not let the market decide such an important matter since currency markets are unfair, volatile and nothing more than speculative crap shoots to rip off ordinary people.

----

When the price in any market rises (or falls), there are going to be some happy people and some unhappy people. The happy people will benefit more than the unhappy people lose.

[Cartman]

QUOTE 

Uh uhmm...the free market should decide dollar values and governments should not intervene because anything government does is inefficient, wasteful and probably oppressive. 

Cartman, I'll play the leftwing advocate:

The government should decide dollar values and we should not let the market decide such an important matter since currency markets are unfair, volatile and nothing more than speculative crap shoots to rip off ordinary people.

----

When the price in any market rises (or falls), there are going to be some happy people and some unhappy people. The happy people will benefit more than the unhappy people lose.

Actually August, I agree with you, but there are some who would like to see the government(s) intervene.

I am not sure about your last point though and I would like you to explain.

The happy people will benefit more than the unhappy people lose.

Are you referring to absolute dollars?

I always believed that every time the CDN $ lost a cent, I lost 1% on my investments relative to the US. My broker disagreed and thought I was making money.

[August1991]

I always believed that every time the CDN $ lost a cent, I lost 1% on my investments relative to the US. My broker disagreed and thought I was making money.

If you were planning on retiring in the US, then I disagree with your broker!

Are you referring to absolute dollars?

Absolute dollars? As opposed to relative dollars? Huh?

I am not sure about your last point though and I would like you to explain.

The happy people will benefit more than the unhappy people lose.

This example barely does justice to the idea:

If you put your house up for sale, that increases the supply of houses, and makes house prices fall a little. Other sellers "lose" - but house buyers "gain" the same amount. So far, it's a wash, a zero-sum game.

Where is the net benefit? Your benefit from getting into the market and selling your house.

It is my experience that people on the left generally do not understand this idea at all.

[Cartman]

QUOTE 

Are you referring to absolute dollars?

Absolute dollars? As opposed to relative dollars?

Yup! Canadian NHL players are paid in US $$. Why do they not settle for pesos or Cdn $'s?

[maplesyrup]

They might be soon!

It's Over

As we head into the weekend it is interesting to look at today's gold chart. It seems that a lot of people did not want to head into the weekend without holding gold. Gee, I wonder why!

Gold prices today are at the highest they have been in 16 & 1/4 years - check the gold charts to see the trend.

And the Canadian dolla is up 1.04% today against the US dolla.

And keep your eye on silver US$7.57 today. /859

[maplesyrup]

Maybe it really is over.

Greenspan Warns That U.S. Deficits Pose Risk to Dollar

The US wouldn't do something smart like raise income taxes, would they? NAh!

[August1991]

Greenspan is just signaling to everyone that he has no objection to a falling US dollar.

IOW, if the Fed raises the US discount rate (for domestic reasons and as he has often suggested), his statement intends to circumvent arguments that it's doing it to defend the US dollar.

Smart guy, Greenspan. The Woody Allen of Central Bankers. (You can take that comment however you want to.)

-----

Are you referring to absolute dollars?

Absolute dollars? As opposed to relative dollars?

Yup! Canadian NHL players are paid in US $$. Why do they not settle for pesos or Cdn $'s?

If you mean US dollars, say so (and not absolute dollars(?).) What are relative dollars, again? Sorry, I'm lost.