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By Monty Guild & Tony Danaher, on November 23rd, 2009
ELECTION ECONOMICS-NOVEMBER 2010 ELECTIONS
Although they are almost a year away, the 2010 U.S. elections should be foremost on the minds of all investors. Why? Because the 468 incumbents in the House and Senate who are running for reelection are already springing into action. Terrified about their prospects for reelection, the candidates are ready to do (spend) what it takes to secure another term. This will set into motion a chain of economic behaviors that will ultimately have a depressive effect on the U.S. dollar.
WHAT THE POLITICIANS FEAR
Let’s consider the position in which incumbents running for reelection . . .
Continue Reading: ATTENTION: CONGRESS WILL SPEND BEFORE 2010 ELECTIONS
By Monty Guild & Tony Danaher, on November 17th, 2009
A TOUGH WEEK FOR PRESIDENT OBAMA President Obama was met by strong language from China’s chief banking regulator hours before he arrived in China. Chief regulator Liu Mingkang said a weak dollar, low interest rates, and other actions have “led to massive speculation". He was saying, in effect, that the U.S. carry trade (a process in which the U.S. Dollar is borrowed and then sold to purchase assets such as commodities, stocks, and real estate) is creating asset bubbles around the world. He pointed out that many countries are experiencing a rise in real estate prices due partly to . . .
Continue Reading: OIL AND GOLD CONTINUE TO RISE
By Monty Guild & Tony Danaher, on November 11th, 2009
TO PUT IT MILDLY, WE WERE SHOCKED Does the Obama Administration want the U.S. dollar to decline? We believe it does. On November 5th, the U.S. Federal Reserve announced that they intend to keep “interest rates exceptionally low” for an “extended period of time.” Given that the U.S. Dollar is already under pressure due to low interest rates, the Fed’s announcement is the equivalent of saying: “go ahead and short the dollar”. In our opinion, it is clear that this announcement ushers in a period of extreme volatility and a continued downward bias for the U.S. Dollar.
During the . . .
Continue Reading: THE DOLLAR IS DECLINING – WHAT TO DO?
By Monty Guild & Tony Danaher, on November 2nd, 2009
Last week, we had a short-lived rally in the U.S. dollar predicated on the unrealistic view that a weaker U.S. economy would send gold and oil down and the dollar up. Only algorithm writers who are completely ignorant about stock and commodity markets could believe that a poor U.S. economy is actually good for the U.S. dollar.
Last week, we had a short-lived rally in the U.S. dollar predicated on the unrealistic view that a weaker U.S. economy would send gold and oil down and the dollar up. Only algorithm writers who are completely ignorant about stock and commodity . . .
Continue Reading: CURRENCY AND DEBT MARKETS
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