Red-Hot Resources

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Friday, December 08, 2006

Egg All Over My Face

What an ugly reversal day we’re seeing in gold, and the US dollar has rallied back from the precipice, all thanks to U.S. Treasury Secretary Henry Paulson. At least, that’s what the talking heads on CNBC are saying –Paulson was able to smooth things over and talk up the dollar, describing Friday’s nonfarm payrolls as “very, very good news.”

Really? That’s why he’s going to China to beg the Chinese to let their currency (the yuan/renminbi) appreciate against the greenback. Oh, that old saying I quoted this morning: “The market can remain irrational much longer than you can remain solvent,” is coming back to haunt me.

Oil and natural gas are down as well! Apparently everyone in Nigeria got a unicorn and lollipop, and OPEC is a bunch of toothless old walruses. Or so today’s action would have you believe.

Energy stocks are off their earlier highs. Gold stocks got shellacked. Silver stocks have lost their luster. Well, you know what they say: Tomorrow is another day. We’ll see how long sweet-talking Paulson can work his magic.

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