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Thursday, December 04, 2008

Gold Chart and More

Time to look at gold again ...

Gold is drifting sideways, trying to decide if it wants to rally or head lower. I'm keeping an eye on it. And now let's look at a chart of the gold's doppleganger (in the short-term, anyway), the US dollar ...

More sideways drift. In this case, the dollar looks to be testing overhead resistance, while gold is testing downside support.
Here's another great chart from Jesse ...

Click on the chart for a bigger image.
Here is more news I'm reading (it's pretty depressing)

The price of key industrial metals has fallen further over the last four months than occurred during the worst years of Great Depression between 1929 and 1933, according to research by Barclays Capital.
Oil prices will continue to fall during the next 12 to 18 months if OPEC fails to implement “sufficient cuts” and supply stays at current levels

According to the Beige Book, which offers a picture of the economy based on anecdotal evidence provided to the US central bank, “overall economic activity weakened” across all 12 of the Fed districts since the last report in mid-October, which had also offered a grim outlook.
What is being advocated as a Keynesian remedy is in fact the opposite of what Keynes called for in his day. Keynes' prescription then would lead to a global rebalancing, with the US depending more on internally generated demand and less on its foreign partners (who were defaulting on their government debt). But if it were successfully deployed in the US now, it wold lead to a continuation, of our excessive consumption and China's underdevelopment of its internal demand.
Job cuts announced in November totaled 181,671, up 61 percent from October and 148 percent higher than November 2007, when job cuts totaled 73,140, outplacement firm Challenger Gray & Christmas said in a report released on Wednesday.

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