26 February 2008 - 19:42Market Commentary 2/26/08

Ding dong the dollars dead. Where is the amero when you need it? That is what the American populace will soon be asking as the dollar continues to plunge. The powers that be are going to use this weak dollar to launch the new currency and this will be the next step towards the North American Union. They will point to the euro’s strength and say see this is why we should create the amero. The Canadian dollar once again led the way and properly predicted the U.S. dollar’s future direction yesterday. Although it did bounce a little bit when it hit that Fibo I mentioned in yesterday’s trading advice and made a feeble attempt at parity it ended up falling like a stone later. Today the dollar was battered against the other currencies with weak consumer confidence hurting it. The consumption based economy is a economic model which is doomed to fail ultimately, you cannot continue to consume and not produce anything, eventually it will catch up to you. The high PPI did not strengthen the dollar, it just made things worse because people know the Fed will not raise rates and that inflation is out of control. So it makes America and the dollar an even less attractive investment, much like third world countries with soaring inflation. No one wants to invest there because they know that their percentage gain cannot keep up with inflation and the rate of exchange will continue to worsen. The only thing making the U.S. different right now is the intervention by Asia and even they are starting to see the writing on the wall. Bottom line is, if the dollar did not rally by now it is not going too.