"Euro, gold, oil surge to record highs"

**Prada** · 03-03-2008, 09:22 PM

Starting to get worrisome
http://rawstory.com/news/afp/Euro_go..._03032008.html

The euro surged to a new high against the dollar on Monday, while gold and oil also struck records on a turbulent day for global financial markets.

The euro rose to 1.5274 dollars in mid-afternoon trading as fresh evidence emerged of a softening US economy.

The plunging dollar was a driving force behind rises in dollar-priced commodities such as gold and crude oil. Crude hit 103.95 dollars per barrel in New York and gold rose to 989.54 dollars an ounce.

Dollar-priced goods rise when the dollar falls because a weaker US currency makes them cheaper for buyers using other, stronger currencies.

"It's been a very volatile afternoon," said Daragh Maher, currency strategist at Calyon.

Global stock markets were also lower on Monday, with sharp falls in Asia.

The foreign exchange market was focused throughout the day on key data for the US factory sector amid growing concern that the world's largest economy is heading for a recession.

The Institute of Supply Management said its survey of manufacturing activity fell to 48.3 percent from 50.7 percent in January. A number below 50 percent signals declining activity.

This figure was broadly in line with expectations but was described as "very weak" by Maher.

In late European trading, the dollar recovered slightly from its record low to trade at 1.5184 dollars against the euro.

The dollar sank to 103.54 yen compared with 103.73 late Friday, after earlier hitting its lowest level since January 2005.

The rise of the euro against the dollar and other major currencies led to concern at a meeting of finance minister from eurozone countries in Brussels.

"I have to say that I'm starting to become increasingly concerned and vigilant," Luxembourg Finance Minister Jean-Claude Juncker told journalists as he arrived to chair the meeting.

A strong euro can be a double-edged sword for the eurozone economy, making its exports on international markets less competitive while making imports of essential commodities like oil cheaper.

Dutch Finance Minister Wouter Bos struck a relaxed tone, saying: "When we created the European monetary union we wanted a strong currency, so now that we have it we should not complain."

The underlying reason for the rise of the euro and the fall of the dollar is the different interest rate outlooks for the United States and the eurozone.

Recent comments from Federal Reserve rate-setters have left markets in little doubt that the US central bank is likely to continue cutting interest rates, while the European Central Bank is still concerned by inflation.

Eurozone inflation figures released Monday showed the annual rate remained at 3.2 percent in February, well above the ECB's 2.0 pct target.

The ECB holds a rate-setting meeting on Thursday.

"Overall, while the further signs of a slowdown in activity suggest that the ECB is likely to soften its hawkish language a bit further at Thursday's press conference, the high rate of inflation probably means that it will be unwilling to cut interest rates for a few more months yet," said Jonathan Loynes at Capital Economics.

For gold, the rise in the price of the precious metal is also because it is regarded as a safe investment in times of financial uncertainty.

The metal has soared amid heightened fears of a potential US recession, alongside jitters over record high oil prices and rising inflation, traders said.

"(Gold) prices found support from the dollar weakness, buoyant oil prices and inflationary concerns, and these factors as well as continued geopolitical tensions are likely to support prices in the near term to challenge the 1,000 dollars per ounce level," said Barclays Capital analysts.

In late European trade on Monday, the euro was changing hands at dollars against 1.5182 late on Friday, at 157.32 yen (157.49), 0.7654 pounds (0.7633) and 1.5849 Swiss francs (1.5803).

The dollar stood at 103.54 yen (103.73) and 1.0432 Swiss francs (1.0409).

The pound was at 1.9846 dollars (1.9889)

**SMCengineer** · 03-03-2008, 11:34 PM

Originally Posted by Prada

For gold, the rise in the price of the precious metal is also because it is regarded as a safe investment in times of financial uncertainty.

The metal has soared amid heightened fears of a potential US recession, alongside jitters over record high oil prices and rising inflation, traders said.

The irony is overwhelming. Maybe it's time we allow for competing currencies and stop this belief that we should artificially manipulate our money supply.

**Panzerfaust** · 03-04-2008, 09:12 PM

Originally Posted by Blome

The irony is overwhelming. Maybe it's time we allow for competing currencies and stop this belief that we should artificially manipulate our money supply.

I was going to say the same thing. hahaha

The answer is right in fron of our face yet we ignore it. bwahahahaha

I also got a laugh out of this quote:

"Dutch Finance Minister Wouter Bos struck a relaxed tone, saying: "When we created the European monetary union we wanted a strong currency, so now that we have it we should not complain."

Won't be long now before our new currency is delivered with the BS excuse above being given as the reasoning for it.

**juju** · 03-04-2008, 09:42 PM

Gas price at my local gas station has set record too!
Did I mention price of flour.
And even eggs has gone up considerably.

**Panzerfaust** · 03-04-2008, 09:52 PM

Originally Posted by juju

Gas price at my local gas station has set record too!
Did I mention price of flour.
And even eggs has gone up considerably.

In reality, the price of those items have not gone up, it is that the dollar has gone down in value which in turn means you need to hand over more of said dollar to pay for those goods.

**Pooks** · 03-05-2008, 06:54 PM

Originally Posted by muriloninja

In reality, the price of those items have not gone up, it is that the dollar has gone down in value which in turn means you need to hand over more of said dollar to pay for those goods.

over 1 year

oil 1 year ago 67$ USD a barrel, today $105 a barrel
thats an increase for American's off... 57% Increase.

in euro's
oil 1 year ago = 51 EUROs per barrel, today $69.30
thats an increase in Euro's off 18% increase...

so Europeans have 18% increase in OIL prices.
We got 57% increase in oil prices, over the last year.

**barondumonde** · 03-05-2008, 09:22 PM

Originally Posted by Pooks

over 1 year

oil 1 year ago 67$ USD a barrel, today $105 a barrel
thats an increase for American's off... 57% Increase.

in euro's
oil 1 year ago = 51 EUROs per barrel, today $69.30
thats an increase in Euro's off 18% increase...

so Europeans have 18% increase in OIL prices.
We got 57% increase in oil prices, over the last year.

now track the forex difference between the dollar and the euro and you have a very neat mathematical relation.

**Red Ketchup** · 03-05-2008, 09:36 PM

Which means that the US dollars buying power is going down the shîtters... (the readers digest version of this whole thing...)

Red

**Prada** · 03-05-2008, 10:01 PM

Originally Posted by muriloninja

I was going to say the same thing. hahaha

The answer is right in fron of our face yet we ignore it. bwahahahaha

I also got a laugh out of this quote:

Won't be long now before our new currency is delivered with the BS excuse above being given as the reasoning for it.

Perhaps there may be a currency union in north america. Time will tell but there have been talks.

Which means that the US dollars buying power is going down the shîtters...

For now....thats what it looks like. Hence the reason some nations are dropping the US dollar