Diluted Dollars
Stocks bounced around today as worry exists over a trade war between the US and China (that’s better than a shooting war.)
Bonds bounced on the same data with increased interest rates.
Gold fell a little today. Oil and gasoline went sideways.
The Dollar is falling, and falling fast right now. Why??? It’s simple. The FED is printing money to keep our economy out of deflation, but they don’t know how much to print – so they will print until things really turn around. They haven’t turned anywhere so far. But, there are a LOT of new dollars floating around, and that is just causing the Dollar to drop. In effect, the Dollar is being diluted compared to all the other nations of the world. Who cares, you might ask??? You should care. That will mean higher prices on everything in the future as the weaker Dollar will mean higher energy prices (oil, natural gas, etc) and higher import costs. When prices go up, people scream inflation – but it’s happening right now – just watch the Dollar exchange rates.
In the news today….
Just the fact the Obama is going to tax Chinese tires by 30% when they enter the US because China broke the WTO rules. China is crying foul, but they are guilty as sin – they just don’t like being called guilty – it’s all about saving face, (and money, of course.)
Here are the last numbers for today (about 40 min before closing):
Dow Jones 30 Industrial – 9627 (up 21 points)
10 Year Treasury Bond – 3.41% (up 0.05%)
Euro – $1.4609
Gold – $1000 (down $5)
Oil – $68.82 (down $0.47)
Gasoline – $1.74 (down $0.02)