The Economy Guy

Issue: 9/13/07 Wednesday

I took off a couple of days while nothing much was happening in the market. Yesterday, the stock market went up a bunch, and came back down 17 points today. The big news today was that the US Dollar sank to a new low against the Euro overnight when it traded briefly at $1.40/Euro. All of you who travel should be sucking in a big breath right now.

Gold hit a new recent high, and stayed at it today. It closed at $721 – and is telling the word that the US Dollar has lost more value. At least that’s the message that the FED doesn’t want you to hear. The FED has been waging a decades long war against gold and losing the battle, and perhaps the war. The FED wants its worthless paper (that’s the green thing in your pocket) to be the only thing in the world of value. Gold kind of gets in the way – so the FED did one of those things that isn’t logical. It sold it’s hoard of gold to depress the value of Gold. Well, so did the international central banker friends of the FED around the world. This happened several years ago, and finished when the gold price started increasing. Well, the FED’s actions were illogical because one of its “raison d’etre”’s is to maintain the value of the US Dollar. You would think that holding an appreciating asset, like gold, would better serve that purpose than selling it, wouldn’t you????

Oil is hitting new highs each day. The reason given in the press is the trouble in Nigeria. What isn’t stated is that oil, like gold, reflects the real value of the dollar. As the dollar weakens, the cost of oil and gold goes up.

Here are Today’s closing details:

DJ30 – 13,291

10 year US Treasury Bond – 4.41% (Up .04)

US Dollar – $1.3904/Euro.

Gold closed at $721 per ounce.

Oil Closed at $79.91 (Up 1.68) Oil is testing its high, and also indicating a weak dollar.

Gasoline is $2.02