Thursday, October 14, 2010

Dollar falls, commodities (read oil, read metals, read ammunition) will be more expensive.

Oh, joy.

Dollar fall sparks stability warnings

Financial Times
By David Oakley and Peter Garnham in London and Michael Mackenzie in New York

October 14 2010 19:55

The dollar tumbled against most major currencies on Thursday, prompting warnings that the weakness of the world’s reserve currency could destabilise the global economy and push other countries into retaliatory devaluations to underwrite their exports.

Increasing expectations the Federal Reserve will pump more money into the US economy next month under a policy known as quantitative easing sent the dollar to new lows against the Chinese renminbi, Swiss franc and Australian dollar. It dropped to a 15-year low against the yen and an eight-month low against the euro.

The dollar index, which tracks a basket of currencies, reached its lowest level this year.

A senior European policy-maker, who asked not to be named, said a further aggressive round of monetary easing by the US Federal Reserve would be “irresponsible” as it made US exports more competitive at the expense of its rivals.

Simon Derrick, chief currency strategist for BNY Mellon, said: “In narrow terms, the US is winning the currency wars as a weaker dollar will help its economy, but it could damage the other big economic blocs of China, Japan and Europe.”

The dollar’s fall was given fresh impetus after the Monetary Authority of Singapore surprised the market when it tightened policy by widening the trading band for its currency, allowing it to appreciate. The move by the Singapore authorities, responding to fears over inflation, helped push up other Asian currencies.

Russia’s finance minister Alexei Kudrin, in a meeting with European Union officials, blamed the US – and others – for global currency instability.

He said one reason for exchange rate turmoil “is the stimulating monetary policy of some developed countries, above all the United States, which are trying to solve their structural problems in this way”.

Commodities, which are mostly traded in dollars, were boosted by the US currency’s slide. Copper hit a two-year high of $8,490 per tonne at one point, while gold surged to a record of $1,387 per troy ounce. . .


Taylor H said...

Joy to every girl and boy...

Defender said...

If Obama were CEO of a corporation, and Congress the board of directors, I wouldn't touch their stock with SOMEONE ELSE'S ten-foot pole. (That's why they want to turn everyone's 401(k) into Treasury bills involuntarily.)
He's not solely responsible, of course. The Uniparty has worked to humble us for decades. They got theirs.

Crustyrusty said...

Imagine that....

My only surprise is that it's taken this long.

Anonymous said...

Hoora,my wife no longer wrinkles her nose at my "metals and ammo" investments! There is the silver lining. Shane M. Ross IIIper

Anonymous said...

Dollar has lost 20% of value
in last 3 months.
Sure to have been noticed in
paying more for smaller packages
at the s-mart.
Estimates indicate 15% more
declination prior to the Christmas season.
Plan purchases accordingly.



Dedicated_Dad said...

I've actually been reading on this lately, and ...


Somehow our masters have decided that a weaker Dollar will help our economy - by increasing our "exports."

Not that we export much of anything -- except jobs and factories, mostly to China.

I started saying it when the "housing crisis" first began to fall apart and I realized how many would be stuck in "upside down" mortgages: They'll inflate - deliberately - to weaken the dollar.

After a painful period of "hyperinflation" - when it takes $5 to buy what $1 used to - then these people with a $100k house they paid $500k for will be able to sell.

This too is how they plan to bail out the banks - they'll be able to sell all those inflated properties they're now repossessing without taking a loss.

Further, they won't change the tax code to reflect the new reality, thus bumping everyone into higher brackets and greatly increasing "revenue" -- with which it'll be a lot easier to pay back China...

Anonymous said...

Gas in my area has gone up 33 cents in less than a month.


WarriorClass said...

Yes, but $499 will still get you 1000 rounds of .308 PRVI PARTIZAN at

Stock up while it's there men.


J. Croft said...

Of course it's deliberate: they're at war with us. They've ALWAYS been at war with us; it's just that if they were honest about it say, 50 years ago, there'd be about a million traitors swinging from lightpoles and tree branches. Can't say they're stupid... at least the ones that make policy. Their bureaucrats and enforcers know enough to stick together and shut up.

Defender said...

It's ALL deliberate, Dad. What middle class?


People in Appalachia still lack indoor plumbing, and schools.