cpngtw
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Tiger21Invest
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Federal Reserve Vice Chairman Donald Kohn said, “I don’t think a V-shaped recovery is the most likely outcome this time around. All told, I expect that the recovery in US economic activity will proceed at a moderate pace in the second half of the year before strengthening some in 2010…. I expect the persistence of economic slack, accompanied by stable longer-term inflation expectations, will keep inflation subdued for some time. The substantial rise in the unemployment rate and the plunge in capacity utilization suggest that the margin of slack in labor and product markets is considerable.” Further evidence that the Fed isn’t concerned about inflation and there isn’t any need to increase interest rates in the near future. The dollar will continue to be the funding currency for those seeking risky assets and higher yielding currencies.
Tiger21Invest
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Interesting article in the FT:
A strong US needs a weakened dollar
Published: October 9 2009 22:23 | Last updated: October 9 2009 22:23
Lawrence Summers, the director of President Barack Obama’s National Economic Council, has voiced his support this week for “a strong dollar based on strong fundamentals”. He was responding to the greenback’s recent feebleness: the US currency has depreciated by 13.3 per cent on a trade-weighted basis since its peak in March of this year. But this fall in value, while large, should neither be feared nor obstructed.
The immediate cause of this slide is not growing fear of inflation: market expectations for future inflation rates have been stable and low. Rather the decline in the dollar has been caused by the recent recovery in world economic confidence.
The weakening is part of the unwinding of the stampede to safety that, between August 2007 and the spring of this year, drove the value of the dollar up by 12.6 per cent as investors rushed to hold safe assets. The US currency is now roughly where it was as the crisis was emerging.
It would actually be rather helpful if the dollar were to weaken further. Politicians everywhere see strong currencies as national virility symbols, but the effect of a cheaper dollar would be to help American exporters while making imports to the US dearer.
This is what America – and the world – needs. In the medium term, as Mr Summers put it earlier this year, “the rebuilt American economy must be more export-oriented and less consumption-oriented”. In short, the US must start living within its means, and the rest of the world must stop relying on its profligacy.
This is the prospect that has worried monetary authorities in Asia. The central banks of South Korea, Taiwan, the Philippines and Thailand have intervened in markets in the past week to bolster the dollar’s strength against their currencies. They are trying to slow the pace of any such rebalancing.
That is understandable: this type of reordering of the world economy would be enormously disruptive for these export-led countries, since their economic strategy is to sate the appetites of the consumption-led countries.
But this is a losing game. Devaluing their own currencies to maintain weakness against a sinking dollar is dangerous. It risks domestic inflation and stakes public money on currency speculation in a race to benefit from the largesse of already over-indebted consumers. Mr Summers may be inclined to repeat his empty mantra in favour of a strong dollar. We can only hope he does not mean it.
A strong US needs a weakened dollar
Published: October 9 2009 22:23 | Last updated: October 9 2009 22:23
Lawrence Summers, the director of President Barack Obama’s National Economic Council, has voiced his support this week for “a strong dollar based on strong fundamentals”. He was responding to the greenback’s recent feebleness: the US currency has depreciated by 13.3 per cent on a trade-weighted basis since its peak in March of this year. But this fall in value, while large, should neither be feared nor obstructed.
The immediate cause of this slide is not growing fear of inflation: market expectations for future inflation rates have been stable and low. Rather the decline in the dollar has been caused by the recent recovery in world economic confidence.
The weakening is part of the unwinding of the stampede to safety that, between August 2007 and the spring of this year, drove the value of the dollar up by 12.6 per cent as investors rushed to hold safe assets. The US currency is now roughly where it was as the crisis was emerging.
It would actually be rather helpful if the dollar were to weaken further. Politicians everywhere see strong currencies as national virility symbols, but the effect of a cheaper dollar would be to help American exporters while making imports to the US dearer.
This is what America – and the world – needs. In the medium term, as Mr Summers put it earlier this year, “the rebuilt American economy must be more export-oriented and less consumption-oriented”. In short, the US must start living within its means, and the rest of the world must stop relying on its profligacy.
This is the prospect that has worried monetary authorities in Asia. The central banks of South Korea, Taiwan, the Philippines and Thailand have intervened in markets in the past week to bolster the dollar’s strength against their currencies. They are trying to slow the pace of any such rebalancing.
That is understandable: this type of reordering of the world economy would be enormously disruptive for these export-led countries, since their economic strategy is to sate the appetites of the consumption-led countries.
But this is a losing game. Devaluing their own currencies to maintain weakness against a sinking dollar is dangerous. It risks domestic inflation and stakes public money on currency speculation in a race to benefit from the largesse of already over-indebted consumers. Mr Summers may be inclined to repeat his empty mantra in favour of a strong dollar. We can only hope he does not mean it.
N Rothschild
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euro high 1.4920 
N Rothschild
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:clap:
cpngtw
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N Rothschild
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i believe the euro rally to now be over, short
N Rothschild
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your going on ignore
This message is hidden because SSINGH is on your ignore list.
ahh bliss
This message is hidden because SSINGH is on your ignore list.
ahh bliss
:clap::clap::clap::clap::clap::clap::clap::clap::clap::clap::clap::clap::clap:
Nostradamus359
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i believe the euro rally to now be over, short
short at midnight)
http://www.trade2win.com/boards/metals/76598-gold-october-14-15-09-a.html
