"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


Monday, March 21, 2011

Broad Dollar Index continues sinking

The Broad Dollar index is a much wider or "broader" representation of the plight of the US Dollar on the global markets as the basket from which the index is created is more representative of the globe than the smaller basket of currencies that comprise the USDX.

Even at that, it still shows a very similiar pattern to the USDX and is also now technically within striking distance of its 2008 low having broken downside support near 97.

It is highly unlikely that gold will not make a new lifetime high if this support level near 95 fails. I can easily see it above $1500 were this to occur.

I also believe that the US Dollar is at levels that are now necessitating it to be watched very closely by the US monetary authorities. In much the same manner as the Yen went flying to the upside, so too the Dollar could go crashing to the downside if the speculators decide to sit on it in earnest. While the Fed and the US officials WANT a lower Dollar, they do not want a Dollar crash. Sometimes it is easier to talk about such things than to actually accomplish it.

Should the Dollar carry trade increase in intensity, every hedge fund on the planet would be arrayed against the G7. That would be weird to say the least as the G7 monetary officials do not want the Yen any higher yet if they are not careful they may end up pushing the Dollar past the point of no return. What an awful stinking mess!


  1. Dan, I know this is a bit random, but it does mention livestock in your bio... with the recent madness in corn where do you see LC going?

    And bravo to the above!

  2. Harry - Cattle prices are already at record highs because beef demand has been outstanding.I have to weigh that current level of beef prices against the overall spending of the consumer because I would have thought by now that the lousy employment situation would ahve price beef out of the market at these levels but exports are making the difference. As long as that side of the equation stays strong, it is difficult to see cattle dropping sharply lower but we might have already seen the highs of the year. Those are very lofty price levels. A lot depends on how pork and chicken demand fares heading into the grilling season.


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