Thursday, April 28, 2011

Precious Metals React to US Policy

Gold in New Zealand dollars: $1903.68 per oz
Previous all time high: $1955.10 per oz

Silver in New Zealand dollars: $60.49 per oz
Previous all time high: $48.58
per oz

This is the first time I have quoted such a large blog post from someone else, but I think Dan Norcini's post today warrants a read.

FOMC gives Precious Metals Bulls reasons for cheer
The market has obviously interpreted the FOMC news and the comments from Fed Chairman Bernanke as a signal that they are unconcerned about the effect of their policy on the US Dollar, which is sinking further into the abyss. This has traders and investors moving strongly into the gold and silver markets, with gold soaring into a new all time high in nominal terms and silver shooting up a whopping 5%. 
Meanwhile, the Dollar has now convincingly broken down below critical chart support near 74 on the USDX and looks on target to sink as low as 72. I have said it several times here on this site and over at jsmineset - if the Dollar breaks down below 72 on that chart and cannot recover that level within a couple of sessions, we will be witnessing the historic demise of the currency and the probable end of its role as the global reserve currency. 
Thanks Ben and thanks to all the Fed governors whose foolish, inept, and short-sighted idiocy has set this nation on a path that will make the IMF prediction of its sliding into second place behind China, indeed come to pass. No nation ever kept its place of economic ascendancy by deliberately killing its own currency. An economically strong nation, with a solid manufacturing sector, the rule of law, an ethic of thrift, low taxes, reasonable regulation, etc, will by default have a strong currency.  
The plight of the Dollar is now a commentary on the decline of our beloved nation. It speaks with a more pure voice than any analyst could ever aspire to and what it is crying is disheartening to an extreme for those with ears to hear it. 
History has the advantage of being relatively objective in its analysis as it is removed from the passions of the era. It is with that in mind that I can confidently say it will render a harsh and severe criticism of those who led our nation and its monetary policy during this period as they presided over its decline.

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Articles of interest:


Dollar sinks, gold hits new high after Bernanke speaks

See article here
LA Times Blog


Gold and Silver Coins are Money


See article here
Franklin Sanders blog
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