market: currencies, gold, silver, oil

  1. 22,691 Posts.
    Latest: USD 82.88 (+0.20), Euro 1.320, oil 51.5 (+0.33) Gold 433.7 (high 436.5).
    The artificial inflation rate rose by only 0.1% but the core rate the month before, rose 0.8 %.

    The marked tried to assess the Korean statement-See my previous post:
    Dollar Scare Reveals Fragile Support (Thanks Dub):

    The writer says:
    "For sure, the market overreacted to reports that the Bank of Korea wanted to reduce the share of dollars in its portfolio.

    "What the Koreans actually said was that they want to diversify out of low- yielding US Treasuries into higher-yielding securities, which could include riskier US assets as well as non-US government bonds. And they intend to do so by diversifying the flow of reserves, not the $200 billion (£105 billion) stock".

    COMMENT: By freezing the US reserves to $US200 bill, there could be 3 outcomes:
    1. Korea may not buy more US Bonds in the future.
    2. $US200 bill may sound a lot now but as the economy expands, it will become less and less as a ratio of the the overall currency reserves which should grow in normal conditions. So, there will be a loss of dollars.
    3. They may buy US assets or they may not. They didn't say they would buy US assets.

    Central Banks are notoriously secret so there is no guarantee that they will hold the $US200 bill in toto. Part of it can be slowly fed into the financial trading system.

    It is strange that Russia, Japan and now Korea made statements on the USD which they later amended.

    Interesting and it could happen:

    Theodore Butler:

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