The U.S. Lunatic Asylum (i.e., Economy) Is Facing Approximately $15 Trillion In Roll Risk By 2012

Zero Hedge ^ | 11/10/09

[TigerLikesRooster]

Ping!

[Oldexpat]

Gold’s hitting a new record high this day in London.

[TigerLikesRooster]

Against dollar or against every major currency?

[TigerLikesRooster]

From Market-Ticker,

Dollar vs Dow

[PugetSoundSoldier]

Against the dollar... The Euro is now worth $1.50, and the CAD is $0.96; JPY is at 89.8.

[TigerLikesRooster]

Thanx.

[PjhCPA]

So when are our retail prices going to start following the same path as the Dow?

I’m studying for my Series 7 exam. It’s fun to read articles like this and understand what they are talking about. Knowledge is a good thing.

[PugetSoundSoldier]

No problem... Love the graph a few posts up; the DJIA is actually flat this entire year, if you value it in EUR or GBP! It’s just that the dollar is so much weaker, it takes more of them to buy the slice of those multi-national companies...

[TigerLikesRooster]

[PugetSoundSoldier]

Weaker dollar drives gold...

I think my guess was accurate; Obama came to Beijing to discuss the coupling of the RMB to the USD; not to ask the Chinese to break it, but to KEEP it. The RMB is getting valued higher and higher, and that's helping to keep the USD up (via the peg).

When the Chinese unpeg the RMB from the USD (even for a 10% correction), the RMB will gain against other currencies, and the USD will plunge even further against those same other currencies. Right now, the peg is one of the solid things keeping the USD from plunging like a rock in deep water...

[TigerLikesRooster]

An interesting use of currency peg: RMB shoring up USD from below, instead of USD pushing down RMB from above.

[dajeeps]

It’s interesting how the discussion involves a weakening dollar and then goes on to state obligations in nominal values. A weaker dollar may just be the only way out this huge debt hole.

[preacher]

From Kitco.com at 5:30 CST

[Uncle Ike]

” A weaker dollar may just be the only way out this huge debt hole. “

Did I misread the article??

What I understood was that as US debt comes due, we don’t have the cash to retire it, so we must ‘roll’ (re-borrow) it at a higher interest rate - which negates any perceived ‘advantage’ from the weaker dollar....

What am I missing??

[Rummenigge]

The society of ownership.

[dennisw]

No problem... Love the graph a few posts up; the DJIA is actually flat this entire year, if you value it in EUR or GBP! It’s just that the dollar is so much weaker, it takes more of them to buy the slice of those multi-national companies...

If you take the US GDP and measure it in Euros it is down 25% since 2000

[dennisw]

RIGHT.... you need to go to Kitco for an instant breakdown as to why gold is up or down today. Whether it is due to USD weakness/stregth or plain old buying/selling

http://www.kitco.com/kitco-gold-index.html#RT

 

[PugetSoundSoldier]

VERY interesting! Looking at the 1 year graph, and we see over the last 7 months a big divergence in the price of gold in USD and the price of gold in a basket of non-USD currencies... Most of the change in gold in the last 7 months (since the passage of the “stimulus” bill) appears to be from a declining USD, not an inherent gain in gold!

[dennisw]

Most of the change in gold in the last 7 months (since the passage of the “stimulus” bill) appears to be from a declining USD, not an inherent gain in gold!........

Yeah and don’t fall into the trap of always attributing golds rise or fall to the USD activity

Kitco front page gives a a daily breakdown on gold telling you what part of that day’s gold rise/fall is attributable to the USD and what part is just plain old gold buying or selling