Iraq and North Korea are wildcards. Everyone expects a quick eary victory in Iraq but that is nonsense. They're still shooting at us in Afganistan and I don't expect things to be any different in Iraq. No way would we ever challenge North Korea. We'll yell alot but in the end they will do whatever they want.
All the war talk and military action will be blamed for the weakening economy which will let the FED and the politicians off the hook.
Richard W.
Bush I believed this too - look at what happened to him.
Dollar 'declines' in terms of what? As the dollar declines against the larger market foreign currencies such as the Euro and the Yen? Sure--thats easy. However if the dollar remains flat against the Euro and the Yen, does the price of gold go down against the dollar? I think not necessarily.
The dollar may well continue to 'decline' against gold, even if the dollar does not 'decline' against the Euro or the Yen. Because all of the fiat currencies are losing credibility as stores of value. In light of hindsight, it may well appear that the drop in central bank controlled interest rates may well turn out to have been the cause of their loss of control of the fiat money system. When your return on T-Bills was 5%, even if inflation was running at 2 or 2 1/2, you were still earning a rate of return on your stored liquidity. But when your T rate drops to 1%, the dollar ceases to be an attractive or safe appearing place to store liquidity.