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The CNBC/Fast Money Morons just don't get it....
The CNBC Morons just don't get it.
Just because the Fed may, and I stress may, stop cutting rates, doesn't mean the dollar will go higher. That's like saying all oil companies are going to do well simply because the price of oil is higher. It doesn't work that way. When the Fed stopped their last cycle of cuts, what happened? The dollar rallied then began its multi-year decline. I see no reason why this should be any different. Things are horrible out there, regardless of what CNBC wants you to believe.
In order for the dollar to go higher, you need economic strength, and there is none, and IMO there is none on the horizon; $119 oil will sap any strength from the economy. But won't oil come down, if the dollar goes higher, you ask? Not always. Look what happened over the last week or so when the dollar had a counter trend rally, it constantly made news highs except for one day when it was down a couple of bucks.Of course, in the eyes of the Fast Money guys, gold is toast. Again, this is not accurate. Assuming the dollar goes higher because the ECB cuts (and that's a big assumption) you will see, at some point, gold and the dollar going higher together, in peace and harmony.Guy "gold will go to $700 before $800, Adami calls for the death of gold and a major dollar rip in the second half. That alone is reason to believ it won't happen. If I am not mistaken, didn't he call for the same thing in December?
All roads lead to gold, unless Paul Volker comes back.
Just because the Fed may, and I stress may, stop cutting rates, doesn't mean the dollar will go higher. That's like saying all oil companies are going to do well simply because the price of oil is higher. It doesn't work that way. When the Fed stopped their last cycle of cuts, what happened? The dollar rallied then began its multi-year decline. I see no reason why this should be any different. Things are horrible out there, regardless of what CNBC wants you to believe.
In order for the dollar to go higher, you need economic strength, and there is none, and IMO there is none on the horizon; $119 oil will sap any strength from the economy. But won't oil come down, if the dollar goes higher, you ask? Not always. Look what happened over the last week or so when the dollar had a counter trend rally, it constantly made news highs except for one day when it was down a couple of bucks.Of course, in the eyes of the Fast Money guys, gold is toast. Again, this is not accurate. Assuming the dollar goes higher because the ECB cuts (and that's a big assumption) you will see, at some point, gold and the dollar going higher together, in peace and harmony.Guy "gold will go to $700 before $800, Adami calls for the death of gold and a major dollar rip in the second half. That alone is reason to believ it won't happen. If I am not mistaken, didn't he call for the same thing in December?
All roads lead to gold, unless Paul Volker comes back.
posted by Neal | 5:44 PM
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