Friday, November 24, 2006

 

US$ "Taking It On The Nose"

The Associated Press reports on the US dollar. "The dollar dropped against other major currencies Friday and fell to a year-and-a-half low against the euro, weakened by expectations of higher European interest rates. In late afternoon New York trading, the 12-nation euro bought $1.3079, up from $1.2941 late Thursday in New York. The euro hasn't traded above $1.30 since April 2005 and it briefly topped $1.31 in trading before easing back."

"The dollar slipped against the Japanese currency, falling to 115.75 yen from 116.26 the day before, while the British pound rose to $1.9317 from $1.9156."

The euro was aided by a report which showed that business confidence rose unexpectedly for a second month in a row to a 15-year high. Thursday's Thanksgiving Day holiday may have made markets more volatile by keeping trading volumes relatively light. Many U.S. dealers also took Friday off as part of a long holiday weekend."

"The Ifo report firmed up expectations that the European Central Bank will continue to raise interest rates, with the next increase forecast for December. In contrast, many believe that the Federal Reserve will keep rates on hold or cut them next year."

"The ECB has raised rates five times since last year to 3.25 percent, while the Fed has left its rate at 5.25 percent for three months after 17 hikes since June 2004."


"In other trading, the dollar bought 1.2105 Swiss francs, down from 1.2246 late Thursday, and 1.1331 Canadian dollars, down from 1.1419."

"Analysts said that the dollar's fall was spurred by increasing worries that the interest-rate differential between the U.S. and other parts of the world will narrow soon."

"The concerns come from a mix of developments, including speculation that the U.S. central bank may lower interest rates earlier than expected, as well as comments from China warning about the risk to Asian currency reserves from further dollar declines."

"Gold futures rallied Friday as the dollar tumbled to a 1 1/2-year low against the euro and an almost two-year low against the British pound on concerns about flagging economic growth in the U.S. Platinum continued its trend of extreme volatility, rising $34 in the Friday session alone."

"With the stock market closed at 1 p.m. Eastern, gold for December delivery was up $9.60 at $638.60 an ounce in electronic trading. The New York Mercantile Exchange is closed for trading Friday, leaving the electronic Chicago Board of Trade contract as only way to trade the precious metal. It's the first time the CBOT contract has been open while Nymex is closed."

"'The dollar is taking it on the nose as slow holiday trade in the U.S. is also helping to push gold much higher,' said Kevin Kerr, a trader and editor. 'Gold seems to be building a consensus of buyers at this level and many bullish factors are at work -- the bearish turn for the dollar seems to be even more juice for the gold price,' he said."

"Silver futures were up 43 cents at $13.47 an ounce. Platinum recovered from a steep sell-off Wednesday to trade up $34 at $1,188 an ounce. Palladium was up $4.95 at $330.95 an ounce."

Comments:
Wow, this steep a drop in such short a time is worrying. Check out the five day charts for the US$ in:

Yen

Swiss francs
 
Maybe that currency crisis isn't as far off as everyone would have us think, eh?
 
Currency crises pick up speed fast. That's why the bankers try to not let them out of the acceptable range at all. A ponzi scheme without confidence is called a collapse. When the crisis happens there won't be time to move out of the USD. Got gold/CHF,etc?
 
THE U.S. DOLLAR IS THE WEEK'S BIGGEST TURKEY

Peter Schiff: While Americans were busy digesting their Thanksgiving feasts, the rest of the world was barfing up dollars.
 
not good if you understand how vital the dollar is to our markets and economy.
 
This is EXACTLY why you hold PMs physically.

Most likely it will take years to unwind all the problems facing this country. However... any number of events could cause the markets to seize up literally overnight.

Needless to say, very few are prepared for such circumstances.
 
I'm watching gold and silver very closely now.
 
Watch gold and silver futures vs. spot prices for backwardation. I'm wondering if the CBOT futures will complicate matters for the alleged Comex manipulators. I'm also thinking of doubling my physical PM holdings from a ridiculously high percentage of my net worth to insanely rediculously high percentages.
 
Very interesting times indeed.

We may be approaching the end of phase II of the PM bull. Short of something really nasty happening, I still expect at least one more huge correction prior to phase III, though.
 
Sorry for a long post, but I thought y'all might be interested in this little revelation from Jim Sinclair:

http://www.jsmineset.com/

My father is Bertram J. Seligman. From simple observation and a study of history, I believe he was the greatest trader that ever lived. Yes, greater than Jesse Livermore who befriended Bert because of his talent.

Bert traded like an old master painted. He used to trade 10% of the NYSE's volume and ended the day with a 500 share position. He taught me to trade from as far back as I can remember. I sat beside him in the car, in the office, and in the house.

We failed miserably as father and son but succeeded beyond anyone's wildest imagination as partners. He was also a business man. He financed the first movies in aircraft via "In-flight Motion Pictures, Inc." He put the first refrigeration device in trucks via "Thermo King Inc."

A partner of Smith Barney who ran its trading department had inadvertently become a controlling shareholder in a small company and called Bert when the company asked him to lower his position. Bert took on the man's entire position and control of the company and went on to promote Dr. Land's new camera. The company eventually became Polaroid and Dr. Land visited my home on several occasions.

Bert financed a company that had invented a feminine hygiene product called Pursettes which was sold in the U.S. through the 1960's and 1980's. One of the great fortunes he made was in a metals company called Strategic Materials.

He was also a partner in deals and trading operations with Jesse Livermore, Old man Kennedy and Arthur Cowen. He invented what is today called the NASDAQ.

At my request, he left me totally out of any financial or material inheritance, having given me more than that: the knowledge to spot value in businesses and - more importantly - how to trade for a living.

I was in a trading department when I was 12 years old. At 19, I was an over-the-counter market maker maintaining 35 markets. That is the training and qualification you need to handle huge margin positions.

During the entire gold market, I never got a margin call - not because I never made a mistake but rather because I margined myself and if a call was pending I liquidated my holdings before the close of that trading day.

I am trained to be a survivor in a battle that takes no prisoners. You may not be. I live markets day and night. I come from the lineage of Jesse Seligman and a famous banking family.

Now you will love this. The Cartel of Common interest is comprised largely of Seligman firms. Yes, my ancestors founded them all except Merrill. Goldman and Lehman are my family's. Many of you made fun of me when I first told you those cartel members had met their match. Well, they have. They face the bloodline of their founder and did not know it until know.

Read the book, "Our Crowd," by Stephen Birmingham and it's all there. Markets, metals and entrepreneurialism course through my entire body not just my blood. The market is my mistress but compared to the real life equivalent I thrive on the volatility associated with this one.

I am committed totally to markets. I love risk and feel alive only when all is committed. Absolutely nothing else in the material sense interests me. Now that I have played the material game, even that no longer interests me. Money does not interest me. I have given away much more than I have. The game interests me. The game is called building companies and trading markets.

Now I am passing my love of this business on to whoever recognizes the gift and is willing to run with it. My two youngest children have chosen to go their own routes outside the financial sphere and my eldest daughter is in my service in Africa. She is an adventurer in her own right but remains uncomfortable with the intensity I show when the bell rings which is her feminine prerogative.

For the curious, my name has been James E. Sinclair since the day I was born. My mother was Abbey's Irish Rose.
 
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