Although the U.S. dollar has been the beneficiary of the forced liquidation of commodity positions which are for the most part denominated in U.S. dollars, it hasn't been because underlying fundamentals have changed, as its drop against the yen has proven. Today the dollar fell to a 13-year low against the yen, dropping to 90.89.
It has rebounded some since then, but it does show that the yen is behaving like the fundamentals connected to it, while the dollar isn't because of the forced liquidation mentioned above.
Still, the remarkable factors in the market keep the dollar high against other nations' currencies, as it was up to two-year highs against the euro, while it enjoyed a six-year high against sterling.
Sterling fell to as low as $1.5270 against the U.S. dollar, while the euro was as low as $1.2498. The Australian and New Zealand dollars also plunged against the greenback, with the Australian dollar taking the biggest hit, falling by 7.6 percent to $0.6213, while the New Zealand dollar was right behind it, decreasing by 6.5 percent to $0.5576.
Friday, October 24, 2008
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People do not realize the real reason for the Iraq war and the current war threat against Iran by USA. It’s not the nukes, it’s not the terrorism and it’s not the oil. It’s all about the protection and propping up of the greatest con-job in recent history, the US Petrodollar Scam.
Back in 1971, the USA printed and spent far more paper money than it could cover by gold. Few years later, French demanded redemption of its paper-dollar holdings in gold. But the USA rejected as it actually didn't have enough gold for the dollars it had already printed and spent all over the world, thus committing an act of bankruptcy. see my blog for detail
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