Commodities Down as U.S. Dollar Strengthens on U.S., European Debt Concerns
Monday, April 19th, 2010
Commodity prices have eased as the U.S. dollar has strengthened today, as ongoing concerns over the debt of the United States and Europe has investors migrating to the U.S. dollar.
Some have attempted to throw this off as concerns over Goldman Sachs (NYSE:GS) being charged with fraud by the SEC, but that's nonsense, and there's absolutely nothing there connected to the markets other than those in the media and government who want more stifling regulation to give lawmakers more control over the private sector.
The real issue continues to be the central banks and governments around the world bailing out their economies at the expense of their citizens in order to justify increased interference in the markets around the world.
Although the U.S. dollar is a terrible currency, the majority of other currencies around the world are even worse, so there's not many other options other than gold as a place of safety for our money.
In other words, it's not that the greenback is strong, it's that the rest are so weak, which drives investors to the dollar. There's also the element of historical patterns and precedence which give impetus to the greenback, even though it has many dangers connected to it. Gold is a much better investment, but the mainstream media seems to be clueless or ignorant on this, and so continue to point to the U.S. dollar as the leading place of safety, even though many other countries, like BRIC, are looking at ways to lessen their dependence on the dollar by trading in their own currencies.
China has experimented with this internally, and it looks like they will possibly do the same with Russia, India and Brazil sometime in the near future. What held them back in the past was the trust in the currency of each nation. That seems to be eliminated to a large degree now, and they may go forward with something soon. Hopefully that will happen, as alternatives in the market are always better than only a single option, which is nothing more than absolute control; something we need to get rid of.
So contrary to what mainstream media outlets are reporting, very few investors are gravitating to the U.S. dollar because of Goldman Sachs, that's ridiculous, as the charges from actions they took three years ago are irrelevant to today's market. All they have come from is the pressure by the Obama administration and Democrats to force the regulations through which have been opposed by the Republicans. There's nothing else to it, and that will be revealed in the months ahead.
Debt is a far more real and relevant concern in relationship to investors, and that is what will drive them to the U.S. dollar and gold in the months ahead, as they continue to look for safety in uncertain economic times.
That will happen more once we get past the illusory euphoria connected to the earnings reports coming out, which are largely inflated when contrasting them with the economy we lived in a year ago; anything looks good and is an improvement over that.
What is more important is where this will all go once the year goes on and unemployment continues to rage and real and sustainable growth is seen as the fiction it is at this time.
Article by Gary B
The views expressed are the subjective opinion of the article's author and not of FinancialAdvisory.com
Tags: commodities , currencies , gold , goldman sachs , safe haven investing , us dollar
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