Guest Post by Michael Ashton
The recent, aggressive ECB ease, combined with some mild Fed growls about increasing rates “at some point,” ought to be good news for the dollar against the Euro. And so it has been, although as you see in this weekly chart (source: Bloomberg) the weakening of the Euro has been (a) mild and (b) started more than a month before the ECB actually took action. (Note that the units here are dollars per Euro).
Guest Post by EWI
Very few people know that the United States did not create a monetary unit pegged to “buy” some amount of metal, as if the dollar were some kind of money independent of metal.
In 1792, Congress passed the U.S. Coinage Act, which defined a dollar as a coin containing 371.25 grains of silver and 44.75 grains of alloy. Congress did not say a dollar was worth that amount of metal; it was that amount of metal. A dollar, then, was a unit of weight, like a gram, ounce or pound. Since the alloy portion of the coin was nearly worthless, a dollar was essentially defined as 371.25 grains — equal to 24.057 grams, or 0.7734 Troy oz. — of pure silver. (15.43 grains = 1 gram, and 480 grains = 1 Troy ounce.)
It appears that two anti-USD market participants have dropped out of the running since we last checked in. So now it is shaping up like SPY, Euro and commodities against Uncle Buck. Emerging Markets could be thrown in there too. Gold and silver? Palookaville. This can’t make the ‘Dollar Collapse’ cult very happy.
The ‘all one market’ vs. the US dollar scenario is breaking up a bit. Commodities and the Euro are doing well. Gold is hanging around and the US stock market? Not liking the weak dollar so much. The precious metals want to see silver get off the floor, but it’s got a heavy open interest sitting on it. This is a tough market, folks.
Guest Analysis by Bob Hoye
Click for full report
One is dropping below its MA 50′s and the other is popping above, after the ECB sat on its hands with rates but made a lot of Jawboning about ‘unconventional’ stimulus in the battle against the dreaded deflation.
It is unbelievable the degree to which people still have confidence in these clowns (including the ones packed into the little clown car here in the US), but apparently they do.
It remains all one market vs. the US dollar, AKA the anti-market. SPY has actually remained somewhat on its own course over the last week, but the others are strictly in anti-USD mode right on down to the little hook upward this morning as Uncle Buck hooks down. Silver, which I got longer on yesterday, is the most sensitive.
Since February 1 it’s all one market arrayed against one market, Uncle Buck. Maybe it should be called the ‘all but one market’ market. Whatever…
By Tom McClellan
Chart In Focus
Bond Yields Say More Downside For Dollar
November 15, 2013
The Chicago PMI blew everyone’s sox (<—typo not intended, but I’ll leave it, considering… ) off and tomorrow we have the national ISM, which has been very strong the last couple of releases. Typically, this strength got the ‘taper’ blow horns going again today.