World economy talk

[uls]

the Fed thinks inflation now is too low

from the most recent FOMC statement:

Measures of underlying inflation are currently at levels somewhat below those the Committee judges most consistent, over the longer run, with its mandate to promote maximum employment and price stability. With substantial resource slack continuing to restrain cost pressures and longer-term inflation expectations stable, inflation is likely to remain subdued for some time before rising to levels the Committee considers consistent with its mandate.

the Fed wants to create more inflation

in other words, the Fed wants to devalue the USD

that can't be any clearer

[tidus1203]

And here comes Hank este Timothy Geithner telling the Chinese and telling the Japanese WE SUPPORT A STRONG DOLLAR POLICY and does otherwise... Everyone is racing to devalue their currency!

[uls]

ZIRP (zero interest rate policy), QE

don't believe their words

look at their actions

[uls]

Gold spot


Gold Dec 2010

[uls]

re gold

my prediction:

demand for physical gold will intensify in the coming weeks

but there's more paper gold out there than physical gold

what's gonna happen?

the spread between cash gold and gold futures will vanish

then spot price will become higher than futures prices

if contract holders think they can't get physical gold in the future, they'll dump futures and rush to the spot market

just a prediction

we'll see if my view is correct in the following weeks

for reference:

http://www.barchart.com/commodityfut..._Futures/GCV10

[silverrain]

Goodness, if the Marcos gold bouillon were true, Imelda is probably in cloud 9 now.

[tidus1203]

http://www.cnbc.com/id/39376353

European central banks halt selling gold. More good news for gold bulls (like me)...

[uls]

there was a flash crash last night

Progress Energy

[uls]

i mentioned competitive devaluation

Brazil's finance minister calls it currency war

Brazil in ‘currency war’ alert
http://www.ft.com/cms/s/0/33ff9624-c...44feab49a.html

An “international currency war” has broken out, according to Guido Mantega, Brazil’s finance minister, as governments around the globe compete to lower their exchange rates to boost competitiveness.

Mr Mantega’s comments in São Paulo on Monday follow a series of recent interventions by central banks, in Japan, South Korea and Taiwan in an effort to make their currencies cheaper. China, an export powerhouse, has continued to suppress the value of the renminbi, in spite of pressure from the US to allow it to rise, while officials from countries ranging from Singapore to Colombia have issued warnings over the strength of their currencies.

“We’re in the midst of an international currency war, a general weakening of currency. This threatens us because it takes away our competitiveness,” Mr Mantega said. By publicly asserting the existence of a “currency war”, Mr Mantega has admitted what many policymakers have been saying in private: a rising number of countries see a weaker exchange rate as a way to lift their economies.

[safeorigin]

hmmm... currency wars...
[ame="http://www.youtube.com/watch?v=CERxBG2bg1U"]YouTube - Keiser Report â„–79: Currency Wars Break Out[/ame]
[ame="http://www.youtube.com/watch?v=WxtfcltKmko"]YouTube - Keiser Report â„–80: Markets! Finance! Scandal![/ame]

[uls]

check prices of cash gold and gold futures

http://www.barchart.com/commodityfut...old_Futures/GC

[tidus1203]

USD is getting slammed hard especially against Euro and Swiss...

[uls]

Sept consumer confidence drops

Richmond Fed data much lower than expected

the more bad news that comes out, the more QE2 is inevitable

hence the movement of USD and gold

[uls]

BTW, it's not only the Fed that's gonna create more money to buy assets

Bank of England:

BOE's Posen: I think further monetary easing should be undertaken in UK, subject to debate

BOE's Posen: If QE does not work, then time for further fiscal stimulus, corporate debt purchases

BOE's Posen: Additional monetary stimulus should begin in the form of addition QE gilt buying

[tidus1203]

Ay sus diba nga sabi ko sayo UK is US Jr. Their financial system is so identical... Reliant on services industries, with few manufacturing industries...

[uls]

race to the bottom

BoJ cannot keep the yen weak when the Fed is deliberately destroying the dollar

effect of yen intervention completely gone

[tidus1203]

Hahahaha the obvious result of a unilateral intervention... The Yen will continue to strengthen I hope you guys were able to get some when it hit the 85's...

[dcph172]

experts, i have a question. should we sell usd's now or buy more? as of the moment we're down 200k php kasi 44 na lang ang dollars

[uls]

di ako expert pero personally i'm not selling my USD

the strong peso is due to inflow of dollars from foreign funds

that can easily reverse

[tidus1203]

But be prepared for more pain in the near future... I am not a PHP trader I trade majors only pero from what I heard from other the PHP could even reach 41 by next year... Again I can't verify that myself...