This page has a whopper 480 hits in one day, actually was hoping for more contributors....
Anyway, read this.
http://www.nytimes.com/2008/07/04/business/worldbusiness/04euro.html?_r=1&oref=slogin
Searched so hard for a less volatile stock, finally found one. I believe fear is preventing anyone from entering short positions in gold, wish I have done so earlier. This stock has lost about 3.50 in value before I started buying puts, today RGLD lost another 1.80.
The euro is now below the 138.4 resistance line, it has had its opportunity to bounce.... Next target for euro could be 133.8
Potential Risk and Analysis:
There is a lot of talk about FED rate cuts this weekend, which could add to inflation. However, we must remember that the Dollar is not using Gold predominantly for preserving its value. If Euro weakens, Dollar will get stronger....it is all based on relative strengths of each countries' currencies.
Time and time again, the FED and Central Banks have refrained from cutting interest rates to prevent inflation. I think cutting now might be too early, after all we still have a possible long recession ahead....may as well reserve the rate cuts for later use.
Thus far Central Banks and the FED have pumped billions of dollars and euros into the financial system, to me that is the same as cutting rates minus the inflation effect. Inflation is a double edge sword, it can help to manage a country's debt....but can also increase the cost of living. Central Banks around the world need a stable currency and I believe the dollar can lead.
Lets see how this play out, I could be wrong.
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