It always boggles my mind how you can be in favor of manipulation on the left hand but frown upon manipulation on the right hand. On Asian Central banks intervening to support the USD a few weeks ago Roubini has no opinion but when it comes to the crowded oil trade action must be taken. Who sets the rules in this planned financial world Roubini envisions? The Goldman Saches of this world? Ben Bernanke? Politicians? The people?
Exactly the opposite is true. Plot crude against US dollar index in a inverse spread, and the current crude price is inline with the lows reached in the recession of 2001-2002. Do the same with gold and it will show that gold is 66% overvalued over the gold-dollar index adjusted price of 2001-2002. Which means the fair value of gold should be about $650 to $700 if US dollar index stays at 76.
The point he was making is that high oil prices will stall the recovery and I agree. A weak dollar resulting in ever higher crude prices is going to hurt, no two ways about it. It did the last 3 times (1973, 1979, and 2008), although the first two were due to supply disruptions. I don't have a good enough handle on gold, other than being a flight out of fiat currencies and breaking and holding above 1000 is significant.
Lib - Disagree with you on Japan analogy - Japan is: 1. Demographically more aged that US 2. Xenophobic (no immigration to mitigate low birth rate) 3. Lower birth rate than US 4. >10 years along into deflationary scenario / ZIRP policy than US 5. Yen not "reserve" currency (but getting closer recently) Japan is an analogy and an experiment, not a roadmap. But I am about to read Richard Koo's book so I reserve the right to change my mind thereafter.
.................................................. Yes.... Am referring to .....lack of savings... inability to realize losses.....the interest rate trap....risk getting overpriced at 0 %.... You know the list.... The best hope for the US.... Tax structure change....
Koo: http://www.bloomberg.com/apps/news?pid=20602007&sid=a5682ThUSwY4 U.S. Risks Japan-Like âLost Decadeâ on Stimulus Exit, Koo Says
Soros said the same in his latest interview. http://www.ft.com/cms/s/0/79edee04-c00a-11de-aed2-00144feab49a.html?nclick_check=1 Despite his reputation of bloodsucker I like listening to Soros. He rarely talks in dogma's which is a change from most of his peers. You wouldnt have any thoughts on him do you, Makloda?
Soros? One of the greatest traders (!) and minds of our times. Soros has his own money on the line backing up his macro thinking, unlike many talking heads who make bold predictions day and night and never follow up on them. Soros' track record speaks for itself, even more so in recent years:
Gold is indeed in a bubble. We are getting the big "inflation scare" in commodities and precious metals. Once the "delation" sets in the dollar is going to see a prolonged rally. The Gov't run banking system is doing everything it can to postpone the margin calls.