There is a surge in bets against the dollar that warns time is running out to take cover behind investments in certified gold coins.
Posted by Adam King on March 10, 2011
Don’t get caught in the stampede – take shelter behind certified gold coins.
March 10, 2011 – There is a surge in bets against the dollar that warns time is running out to take cover behind investments in certified gold coins.
“Hedge funds and forex dealers are betting record amounts against the dollar,” says Peter Garnham in Market Watch. In the last week of February the volume of short dollar positions surged 40% to 281,088 contracts with a value of $39 billion – three billion more than the previous record. The “growing belief that the US currency has lost its haven appeal” has investors looking elsewhere, particularly at the euro.
Until recently Europe’s sovereign debt problems tainted the euro’s appeal, but investors are doing an about face in response to the European Central Bank’s monetary tightening policies that include the distinct possibility that it will raise interest rates in April. In light of the Fed’s soft response to oil and food supply-side inflationary shocks, the euro climbed to a four-month high against the dollar.
“Dollar bears have become a marauding horde,” said RBC Capital Markets analyst David Watt, and Kit Juckes, Société Générale’s head of foreign exchange strategy, sees “a turn in the longer- term outlook for the dollar – for the worse.” Clearly the rest of the world has looked behind Wizard Bernanke’s curtain and seen the real state of our economy.
True unemployment – the Labor Department’s U-6 rate, which includes those who have given up their fruitless search for work – stands at 15.9%, says the Wall Street Journal’s Phil Izzo, despite the addition of 250,000 jobs last month. In fact, as more jobs are added more people are likely to resume their search – and that will increase the reporting labor pool and drive the unemployment rate back up.
The speculative hedge funds and forex dealers are just the frontrunners of a stampede against the dollar. The safest place to get out of its way is behind certified gold coin investments.
Stewart Lawson
Senior Staff Writer – Certified Gold Exchange
Categories:
US Gold Market
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