"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat
Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput
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Euro responding to Trichet's comments
ECB President Trichet is obviously concerned about rising inflationary pressures across the Eurozone based on his comments early this morning. Contrast that with Fed Chairman Bernanke who spoke of "temporary and relatively modest" price increases.
There are legitimate fears that the steady and persistent rise in food and metal prices are being passed through at the consumer level across the EU. Germany in particular, whose economy is performing well, is already seeing this. Added to that now comes the potential impact from rising crude oil and energy costs.
Trichet is trying to walk a very fine line as there are pockets of definite weakness in some of the Eurozone nations which higher interest rates would obviously impact but at least his comments are refreshingly honest and straightforward.
The market is interpreting his remarks as indicative of a rate hike next month and this is the reason the Euro is moving higher this morning. Technically it is on track to move towards the 142 level. If it does, the Dollar is not going to hold chart support at 76 and will very possibly fall quite rapidly to major chart support near 75 on the USDX. If it fails there, gold and silver are going to move sharply higher.
We are truly living through remarkable developments.
Dan
ReplyDeleteGood stuff. We are truly living in remarkable times. Wish I could say the future looked brighter for the US. Unfortunately, this is not the case. Keep posting. Although we don't often respond with comments, we appreciate your work very much.
Regards,
JFC