The U.S Dollar, Oil, Gold, Silver and the U.S. Stock Market Daryl Montgomery September 10, 2008 Copyright 2008, All Rights Reserved The contents of this presentation are not intended as a recommendation to buy or sell any security.
Summary of Market Conditions Fannie Mae and Freddie Mac taken over. U.S. Government manipulation of economic statistics reaches new levels of mendacity. Dollar rally continues thanks to central bank intervention. Oil sell off continues. Target price around100. Gold and Silver sell offs continue. Stock Market is struggling. Long-term picture for all markets remains unchanged.
Fannie and Freddie Update U.S. government takes them over Sept 8 th. This should add $5 trillion to U.S. national debt. Shareholders will be wiped out (includes every major public pension plan in U.S.). Banks and Thrifts hold $1 trillion in their bonds. Foreign governments other big holders (these are the people really being bailed out). $200 billion cash infusion by U.S. government. anticipated (bailout cost estimated at $25 billion). Highly inflationary and negative for the U.S. dollar in the long run.
News since August Meeting GDP for Q2 revised up from 1.8% to 3.3%. Mysterious growth not confirmed by other statistics. Inflation rate (the GDP deflator) used to calculate figure was 1.2%! Official CPI is 5.6%, PPI is 13.2%. The actual CPI is around 13.0%. The official CPI implies a 3.5% decline in GDP; the PPI and actual CPI indicate a bigger drop. Official U.S. employment figures indicate a loss of 605,000 jobs this year (losses for all 8 months). U.S. dollar is rallying because U.S.economy better than Europe (actually, U.S. just lies more about it).
Dollar Index: 9-Month Daily Green Arrows – Gaps; Note floating island
Dollar Index: Two-Year Weekly Green Lines – Resistance
ETF OIL: One-Year Daily 50, 200-day Moving Averages, RSI, DMI, MACD
ETF GLD: One-Year Daily 50, 200-day Moving Averages, RSI, DMI, MACD
ETF SLV: One-Year Daily 50, 200-day Moving Averages, RSI, DMI, MACD
Dow Jones One-Year Daily 50, 200-day Moving Averages, RSI, DMI, MACD
S&P500 One-Year Daily 50, 200-day Moving Averages, RSI, DMI, MACD.
Nasdaq One-Year Daily 50, 200-day Moving Averages, RSI, DMI, MACD
Russell 2000 One-Year Daily 50, 200-day Moving Averages, RSI, DMI, MACD