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Message: gold snapback

gold snapback

posted on Oct 24, 2008 10:01AM

The counter-intuitive rise of the US currency, as many posters have explained, is not a sign of strenght, but a phenomenon created by the liquidation of assets into currency. This will end, and the US dollar will adjust back down. From the Canadian perspective:

CIBC World Markets said Friday.

“It's not interest differentials that are driving the foreign exchange move,” CIBC senior economist Avery Shenfeld said in a note to clients, as the loonie was hovering at between about 78.50 cents (U.S.) and 78.70 cents in midday trading, down more than 15 cents from the beginning of October. “Instead, it's a wave of ‘forced' U.S. dollar and yen buying to cover short positions created by other asset price developments.”

But this wrenching process could be over “quite soon” and bring a “significant snap-back” for some of the many currencies that have plunged against their U.S. and Japanese counterparts.


My hope is that one evening in November, I'll take a walk out in a snow-shower here in Winterpeg, and look back on how far we've come out of the crazy period we went through Aug - Oct, and breath a sigh of relief in contemplation of gold's recent rise....

SKELEG


Oct 24, 2008 10:36AM

Oct 24, 2008 10:52AM

Oct 24, 2008 11:21AM
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