The Asian currency war is getting started and the USD is probably on a longer term rising trend. I am not worried about gold here either. Other commodities, yeah.
The particular problem is twofold. One is Japan’s emerging fiscal crisis, where they are deciding to print money for their 50% fiscal deficits vs. taxes. One is China who is evidently determined to hold the Yuan down from appreciating, even though their masses are starving. Don’t know how else to say that one…
I mean these two countries are doomed. I know that they say (and those rich dummies from the USA who move their money over to China so the rich in China can exit and let the US rich whores lose a few billion dollars) that China is the new golden empire. Laugh. Like Japan said recently in this trade and territory and pride war,’ China have problem if 1.3 billion people not fed’.
Which brings us to the USD rally question.
So in this currency war, which will be gold supportive, they are all trying to devalue or do what is called competitive devaluations. They (The Asians) think this will save them from their doom of bankruptcy and anarchy. No. Japan won’t have anarchy but China will. Japan will just suffer old age in poverty.
So what happens here is the USD is the only currency left with a country which is still functioning (at this late stage) and so we have Asians fleeing here, and also EU people who are afraid of the chaos emerging in the EU over the fiscal cuts and financial mess.
So between people fleeing to the US (which is supporting US Stocks) and the USD, we have monetary flight out of the Euro and into the USD and also Asians sending tons of money to---- get this---- the US markets.
Strange isn’t it.
But then again, considering that the US has sent according to my tracking a total of roughly $ten trillion USD to support the Euro, how could the USD not be stronger?
And interestingly enough, gold is also strong. So we have an unusual trend here. The USD IS rallying (I suppose for a while) and at the same time gold is holding and I am sure will not break $1550 on a bottom. Mostly that is. With me if you track my predictions, mostly always happens (65%).
I just find it interesting that this currency war broke out in Asia in the last months in a large way. But then again I am not surprised.
There is more to say, and we at PrudentSquirrel track gold, and currencies and commodities, with a generally weekly in depth newsletter and you can stop by and have a look at www.PrudentSquirrel.com
Anyway, we forecast gold to range from $1500 to $2000 for 2012 back in Winter 2011, and have been right. We also caught the last gold price collapse from near $1800 this year by two days warning subscribers. We also predicted the USD rally last year April 25, 2011 by about one or two weeks’ notice, and no one I know of did that. We also predicted in Summer 2011 the great general commodity crash.
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