Friday, 5 October 2007

The coming months for gold and the dollar

Jim Willie agrees

"We are witnessing a failure of economic and banking stewardship, management, and performance. The entire world is held hostage. Their banking systems are reinforced by gargantuan sums of US$-based securities. To call them 'secure' at all is a bad joke and a misnomer in every sense. The backlash from the subprime bond export, complete with fraud, mispricing, mislabeling, and premeditation, has in no way been fully played out. With the European, British, and Japanese central banks frozen on policy, urged to hold on interest rates at the point of a gun, the gold price will serve as a relief valve. These major central banks are expanding the money supply in magnificent fashion, over 14% together. With the US Federal Reserve certain to cut rates further, and with far less likelihood of foreign major central banks to follow suit, the USDollar is in great jeopardy. With the Arab states which form the Gulf Coop Council contemplating a removal of the US$ peg, a fracture in the PetroDollar defacto standard is near. Implications to the USDollar negatively, and to gold positively, are profound. The Asians and Arabs are hedging against US$-based bond losses by purchasing increasing amounts of gold. The transactions are not being hidden. Gold is heading for $1000 in the coming several months. The USDollar is heading for DX=70 in the coming several months. The euro is heading for 150 in the next several months. The Canadian Dollar is heading for 110 in the next several months. The precious metal mining stocks are poised for a substantial runup in the next several months. The season will work favorably until the spring."

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I teach Film, Media and English Lit.