Unrest Has Investors Clinging to American currency
It looked like the Greenback (US Dollar) might reverse during the European session but that was short lived as it regained its momentum with the US Dollar Index ended the day higher again. Continued world unrest has investors clinging to the safety of the American currency. New problems have emerged in Hong Kong where pro-democracy demonstrators were tear gassed to quell the protest against decreased democratic options. The Middle East and ISIS also continue to concern investors.
The Euro moved slightly lower against its major counterparts and is expected to remain weak for some time. Stock Indexes around the Globe showed slight weakness from yesterday’s action.
Silver is sometimes called, “The Devil’s Metal” and for good reason. Since Silver hit a high of $50.00 in 2011 it has virtually been a blood bath as of today price is $17.46, sitting on minor support and is at 2009 levels. Gold also eased down yesterday a couple of dollars to take a rest at the $1215 area. The simple explanation minus the manipulation is as follows.
- The Dollar strength reaching all time new highs against most currencies.
- The Stock Market recording new highs every single month (thanks to the Fed’s printing press)
- Official and I repeat official inflation is practically non-existent.
All this is really a Global scam as US print up to 4 trillion to quell the Markets. The US Dollar should be crushed by now with all the quantitative debasing and the commodities should be swinging from the rafters. Inflation doesn’t show up in Government reports but coffee, milk, meat, energy, are up to 5% higher. When the Fed stops all QE, the chickens will come home to roost and the Markets will be forced to stand on it’s own wobbly legs. Gold and silver will continue to weaken as long as this charade plays on but last week it was noted several large institutions have reduced their net shorts of Gold by 60,000 contracts, a small indication of setting up new positions for the future.
Another indication of impending massive changes coming is from world famous investor, billionaire, George Soros. Recently his, “Soros Fund Management” increased their “puts” (sells) on the S&P500 boosting his position to 11.3 million put options bringing the total value of that short position to 2.2 billion dollars. That is not a typo!! Soros has also increased his share value in ETF – Gold Mining sectors by buying millions of dollars of shares… In contrast, Goldman Sachs are still quoting that gold will hit $1050 within the next twelve months, so even the big boys can have a difference of opinion and investment strategies, as one goes net short the other scales into a buy position. It’s all about timing. Remember, Soros made 2 billion dollars in 1992 by shorting the British Pound, a trade still marvelled at by grizzled investors.
There is lot’s of Asian data out today headlined by China’s Manufacturing PMI which contains, employment, new orders, inventories, production. Later on in the day the Euro-zone has CPI Flash estimate, an inflation estimate which has been Mario Draghi’s nightmare these past months.