Gold Disconnects from USDollar

The gold price has finally disconnected from its nemesis, the USDollar. This news should be read as the coming of spring after months of wintry torment, or as the sighting of land after 30 days adrift at sea in a derelict vessel. From 2002 to very early 2008, the gold price had risen from the massive speculative fervor that swept the United States and Europe, whose economies had been supplied largely by Asian factories. The mines from Latin America to South Africa to Australia greatly aided the process. The very paradoxical event of the USDollar rising this past autumn amidst truly horrendous news, one disaster after another, one major bank failure after another, one nationalization of a large financial institution after another, makes the disconnect all the sweeter for gold investors. That set the stage for a powerful gold price move. Imagine a notable rise in the buck, based upon broad negative news in August and October!

MSM: Bought Before It Could Fail? Citibank Acquires Wachovia

On the heels of JPMorgan’s purchase of Washington Mutual –- the largest bank failure in U.S. history -–a new bank merger has been announced. This time, though, the Federal Deposit Insurance Corporation assures us that a bank failure wasn’t part of the mix.