Good morning everyone,
The world of finance is really a thrilling & super dynamic. Things might appear simple but sadly it is not. Here expect the unexpected. When whole world has an eye on dollar now suddenly shifted on Euro. Thanks to Greece. Suddenly the weak dollar started to gain strength. Among the blind, "one eyed man is the king". That's what happening with the dollar, as I am writing this, news is just coming that dollar started to recede as Europe promised to help Greece. If we look to the world of finance through the frame of so called financial journalist who is in the business of telling the reason finding story of every event, it seems utterly simple. Things are much more complex and randomness factor is great.
The role of one eyed king cannot be ruled out, by simply on the news of extending helping hand by Europe to the Greece. Now the question where is the safe haven of investment. Gold is already at the high. But why we invest in gold though we know very well that we are not going to any future cash flow? Strange!!! The simplest explanation is in the gloomy situation, when risk aversion is very high we do invest in gold. Bubble in gold has been already created and I don't think that rationally we have scope of appreciation in gold. Hence the option again left with the dollar only after recent euro debacle.
World will feed again USA by parking money with US T Bills. And that will help the USA economy indirectly to come out of woods sooner than expected. Hopefully other countries too, will come out soon. J rranjan27@gmail.com
