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Message: About the higher dollar

About the higher dollar

posted on Oct 22, 2008 08:20AM

This is my take on the higher dollar.

It is an illusion which is fooling many people and causing them to make inappropriate decisions.

Let's just make this simple example.

Oil sells for x dollars/bbl. and gold sells for y dollars per oz.

The U.S. triples its money supply. European nations quadruple the Euro. Japan prints the Yen by four times. The Swiss do similarly with the Franc, etc. In the situation described the dollar rises relative to the other currencies. But is that a "dollar bull?"

Anyone selling oil for less than 3 -4 times x dollars / bbl. is an idiot and will not do so for any length of time. The same holds true for the price of gold.

I think the simple example is (exaggeratedly) a fairly accurate picture of what is going on.

P.

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