It looks like the dollar could finally (finally!) get the bounce it’s been waiting for …
You know what I think this means for gold — it means Buy more gold! I mean, heck, if we do get a bounce in a fiat currency that’s becoming more of a paper tiger all the time, then you should use that opportunity to buy more hard assets. And gold has lots of support at lower levels.
But what about oil? Let’s look at that chart …
I’d start to worry about oil pulling back if it breaks its 10-day moving average. It then has two pretty strong levels of support — around 76, and then again at its broken downtrend. My guess is support at 76 should hold, but could oil really pull back below 70? Of course it could — this market is very unpredictable, floating as it is on a sea of government money.
Here are some stats that should tell you where oil prices are going longer-term …
- China claims its economy grew at 8.9% in the third quarter. Let’s say they’re lying about some of the growth — 2% worth, say — that’s still 6.9% growth. China’s economy is roaring.
- There are still only 30 cars per thousand Chinese people - compared to over 800 in the US.
- China’s car market just became the world’s largest - with sales reaching 9.7 million during the first nine months of 2009, a jaw-dropping 34% above the same period last year
UPDATE: US$ gets tripped up over article discussing China’s reserves - an opinion piece in the Financial News, a paper published by the People’s Bank of China, said the dollar should remain the principal currency in China’s foreign exchange reserves but the share of euros and yen should increase. This is hurting the dollar, but doesn’t seem to be helping oil, not yet anyway.
Here is some other news of interest …
GDP Probably Grew as Stimulus Took Hold: U.S. Economy Preview
The world’s largest economy grew at a 3.2 percent pace from July through September after shrinking the previous four quarters, according to the median estimate of 65 economists surveyed by Bloomberg News. Other reports may show sales of new homes and orders for long-lasting goods increased.
XX Sean’s note - Seriously? Do they seriously expect us to believe the REAL economy grew at 3.2%? Not my local economy, that’s for sure.
George Washington of Washington’s Blog asks if America is drifting into Capitalism, Socialism or Fascism? His answer may surprise you.
Pelosi Floats Tax Credit For All Home Buyers
Speaker Nancy Pelosi (D-Calif.) said Wednesday that the House not only plans to extend an $8,000 first-time home-buyer’s tax credit — it may be broadened to include all home purchases. “It might be expanded to anytime home buyers,” Pelosi told reporters. The credit is scheduled to expire November 30th and has already cost the government roughly $10 billion. Expanding it to all homeowners would dramatically raise that cost. Some 1.4 million tax returns have so far been filed that take advantage of the credit.
XX Sean’s note — damn, that’s a stupid idea. For more on why, read The first-time home buyer tax credit is idiotic (hat-tip The Automatic Earth)
Related Posts
- Charts of Dollar, Gold, and Agriculture (08/13/09)
- Watch the US Dollar Rally (08/10/09)
- The Dollar’s Long Kiss Goodnight (08/21/09)
- The Dollar and Oil (11/30/09)
- 3 Charts on the US Dollar and Precious Metals (08/24/09)
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