Wow! Gold just hit $1,000 an ounce...oil is at $111 a barrel now. Gasoline futures just rose to an all time high (even though the "summer driving season" hasn't hit yet). Wait until that happens...we'll all be paying more for gas than ever before this summer.
The euro hit an all time high (once again) against the buck at 1.5624.
The yen is at parity with the dollar (USD/JPY = 100)...It may not be long before the USD/CHF pair reaches parity also...the Canadian dollar is still "better than parity" with the greenback.
The U.S. dollar index hit fresh lows at 71.80....
The Singapore dollar just hit fresh highs against the buck...and the list goes on.
Not to mention that food costs are still soaring....foreclosures on homes are still rising...in fact, bank repossessions just doubled last month over the previous month.
So what am I trying to say...it's ugly out there. It's going to get even more ugly in the near term. Economies can't turn around on a dime no matter what "rabbit" the Fed pulls out of its hat.
Unemployment will rise, more firings will take place. So you'd better tighten your seat belt and get ready for the ride.
If you live in the U.S., then you'd better save back some cash and trim the fat financially. You'll be glad you did.
As the U.S. dollar continues to sink in the near term, most anything priced in dollars will become much more expensive: gas, oil, electricity, gold, silver, food, etc.
So watch your spending...because you're going to see many around you in tough times.
The Good news....I've had you positioned into many currencies and pairings that have done great in all of this and will continue to do so.
The carry trades are still in the tank...so the short sells that I've talked about have done rather well (EUR/JPY, GBP/JPY, EUR/CHF, etc.).
The Australian and New Zealand dollars have soared. So you're a part of a knowledgeable crowd that gets to take a lot of the sting out of your downside because you've experienced so much upside that offset the falling buck and higher energy costs.
Sean Hyman
Editor/Trader
www.money-trader.com
Comments