Last week, Ben Bernanke suggested that the US base interest rate will stay close to zero for an "extended period". It's been there since December 2008.
Hedge funds increased their bets against the dollar to a massive $28.6bn (£17.1bn) in advance of Ben Bernanke's historic first press conference as chairman of the Federal Reserve last week.
Part of the job description of the Treasury secretary is to declare at every opportunity that it is in the interest of the United States to maintain a strong dollar and preserve the dollar as the world’s reserve currency. To do otherwise would risk triggering a run on the dollar and a tidal wave of political denunciation.
So let me get this straight. The Standard and Poor's rating agency last week took the historic step of putting the US government's AAA credit rating on "negative watch".
Weakness in the US dollar, which is causing everything to go up—including gas prices, food and stocks—is unlikely to go away soon as a selling frenzy hits the currency market.
Bail out the euro so Europeans can keep buying stuff? Lock up mineral rights around the world? Spend it on imports? Sock it away under a mattress — or in U.S. Treasury notes — and let the pile keep growing?
[[wysiwyg_imageupload:2170:]]By Chris Vermeulen
So far in 2011 the equities market has made some sizable whip saw type moves that even veteran traders have had difficulty being on the right side of the price action. The year started out with equities being very overbought and extended making is virtually impossible for a low risk trader to buy on pullbacks. This was primarily due to the fact that there were no real pullbacks other than for a day or two which was immediately followed by prices continuing to grind higher.
In March, we finally had the pullback everyone was waiting for which we caught 4% of the sell off using an inverse ETF. Then we saw the bottom a few days later and caught a 3% gain from near the lows during a rally higher. So as you can see there have been three trends in the SP500 so far this year and we are about to see another sizable move unfold in the coming week.
China and four other leading high-growth economies have taken landmark steps toward lowering the importance of the dollar in international financial transactions — part of a seminal shift in the move towards a multicurrency reserve and trading system.
[[wysiwyg_imageupload:2150:]]By Axel Merk & Kieran Osborne
We believe that continued U.S. dollar weakness may be a consequence of the diverging monetary approaches central banks are taking around the globe. While many international central banks have been on a tightening path, raising rates (i.e. central banks of: Australia, Brazil, Canada, China, India, Norway, Sweden, to name but a few), the U.S. Federal Reserve (Fed) has been conspicuous in its continued easing monetary policy stance. Indeed, while other central banks have been shrinking the size of their balance sheets, the U.S. Fed's balance sheet continues to expand on the back of ongoing quantitative easing policies.
By Stewart Thomson
1. Most investors get involved in the market to book profits on trades and to build wealth on core positions. A focus on both cash and physical gold is the best way to achieve your goal. Click here now to view the GDX daily chart.