EconomicCrisis.US

It’s wildly fashionable among investment circles to bash the US Dollar’s prospects. Profligate US Government spending, our Federal Reserve’s easy money policies, and the soaring gold price are heralded as proof of the Dollar’s weak outlook. Investors are concerned that a weak Dollar will result in inflation, more expensive imports, capital leaving our shores and depreciation of Dollar denominated assets. While there are few things all investors can agree upon, many see the Dollar headed for ruin.

Bottom Line

Many investors are structuring their portfolios with an underlying assumption that the Dollar can only fall. They are flocking to commodities, foreign currencies, gold, overseas stocks and bonds and similar amid a widely held view that a continued collapse of the US Dollar will make them profitable. Similarly, they shun domestic stocks, particularly those with little or no foreign exposure, US Treasury debt, and Dollar oriented instruments because they’re viewed as providing little protection against Dollar weakness.
Read the rest of this entry »

Job losses in the United States slowed sharply in November, cushioned by seasonal adjustments and a budding economic recovery that is encouraging some companies to retain workers, a Reuters survey predicts.

Analysts said even without seasonal factors related to retail sector hiring, there were clear signs that the labor market was edging toward stability and the deterioration in nonfarm payrolls was in its final stages.

The survey of 72 economists forecast U.S. employers cut 130,000 jobs this month after reducing payrolls by 190,000 in October. While this would be the smallest decline since July last year, it would also mark the 23rd straight monthly drop in payrolls.
Read the rest of this entry »

Federal Reserve officials are increasingly confident the U.S. economic recovery will be durable, but do not see employment or inflation picking up soon, minutes from their November meeting showed.

Senior Fed officials, meeting on November 3-4, also expressed concern their plans to keep interest rates low for a prolonged period could have negative repercussions, including possible speculative activity in financial markets.

“Most participants now view the risks to their growth forecasts as being roughly balanced rather than tilted to the downside,” according to the minutes, which were released on Tuesday and were accompanied by upward revisions to policy makers’ growth forecasts.
Read the rest of this entry »

Sales of existing U.S. homes jumped 10 percent in October to the highest level since February 2007 as Americans rushed to take advantage of a tax credit, cheaper properties and lower mortgage rates.

Purchases rose more than forecast to a 6.1 million annual rate from a 5.54 million pace in September, the National Association of Realtors said today in Washington. The median sales price decreased 7.1 percent from October 2008.

Stocks extended gains on signs the industry at the center of the deepest recession since the 1930s may contribute to a recovery. The extension of a tax credit originally due to expire Nov. 30 and its expansion beyond first-time buyers may fuel further gains in home sales, helping to overcome the drag from rising foreclosures and unemployment.
Read the rest of this entry »