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Why has the dollar been strong recently?

*Dow Theory Letters, by Richard Russell, December 2, 2014

”In the meantime, leading nations move to inflate their debts away.  Europe, Japan and Germany are all showing major signs of weakness.  This leaves the US as the only safe haven on the planet, but even here, you may be facing troubles, at least according to John Williams of Shadow Statistics.  If it turns out that Williams is correct, we can expect an exit from the current safe asset, the US dollar.

Aside from the US dollar is there another safe currency?  The safest currency of all is gold.  Gold bugs are wondering whether the recent spike in the yellow metal was the real McCoy.  Based on recent action, 1200 is the fulcrum for gold.  As I write fifteen minutes before the close, gold is selling at 1199.6.

Personally, I have held physical gold as a safe asset over recent times.  I don’t know where gold will be ten years from now, nor do I know where the dollar will be over the same period, but my bet is that gold will hold its purchasing power by 2024.  I am not looking to make a killing in gold, I just want my purchasing power to keep up with inflation, maybe the great inflation that I see ahead.”

*This information is solely a highlight of the opinion of a third-party publication and is incomplete.  Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.

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