Thursday, July 9, 2015

There are still a lot of problems in the banking system

It’s basically meaningless in the sense that nothing fundamental has changed for the better for the dollar. The federal government is still running huge deficits. There's still too much debt. There are still a lot of problems in the banking system. There's just too much money-printing going on around the world.

What's happened is that for six months or so the dollar rallied because of all of the problems that were emerging in Japan and in the Eurozone. The dollar jumped all the way up to 100 on the Dollar Index, but it was an emotional knee-jerk reaction. People were moving their money into the dollar to avoid the problems plaguing other currencies. They were also drawn to the dollar to try generating a rate of return, or if that was not possible, to at least avoid the negative interest rates in the euro, yen and Swiss franc.

- Source, James Turk via HAI

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