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12/02/2005 Archived Entry: "Gordon on money"
Gordon P. writes, Back in mid-September, I wrote about the skyrocketing post-Katrina price of gold, and wondered if there would be a corresponding plummet in the U.S. Dollar. At the time, with only two weeks of baseline, the decline wasn't obvious, but now, after a couple of months, the trend is quite clear: Gold has cracked US$ 500/oz up 11% since Katrina, while the dollar has sunk 6% relative to the Euro, the Pound, and the Swiss Franc, and 8% relative to the Japanese Yen. (By comparison, the exchange rate for the Canadian dollar appears to have stayed almost flat since late September, in contrast to a fairly steady rise prior to September; has the Canadian gov't been taking monetary steps to devalue its own currency in order to "stabilize" the CDN/US exchange rate out of fear of lost export revenues ???)
I don't see this trend turning around any time soon --- in spite of the recent precipitous drop in the price of gasoline, which is starting to look to me like a temporary "anti-blip," possibly generated by Bushnev's release of some of the strategic oil reserves at the tail end of the annual EPA-generated "Fall Spike"... :-(
I have to wonder where Bushnev's cheerleaders (who keep telling us how "great" the economy is doing) are getting their news from (Pollyannas R Us ??? ), because all the economic indicators _I'm_ seeing suck like a fist-sized meteor-puncture into hard vacuum and there's only so much air left in the crew compartment.