By Andrew Snyder
In less than a week, the U.S. Dollar Index has dropped by 1.6%. In terms of the sorts of moves the equity markets make, it seems like a miniscule weekly swing. But figure in the absurd change in global wealth when trillions of dollars decline by just a percent or two and the news is much more acute.
As U.K. citizens ponder the economic impact of a possible credit ratings cut, many America citizens are watching the situation very closely. After all, we could be next.
The way the Obama administration has been spending lately and with renewed Treasury-buying interest from the Fed, the global markets have every reason to re-evaluate the value of the American dollar. China must be sweating bullets.
With the rapid, but not-so-surprising drop in the dollar (currently trading for 1.388 euros), it is not surprising to see gold’s price climbing just as rapidly. As I write, the shiny, precious metal is trading for $950 per ounce, very close to the top of its six-month range.