Let's start with the Gold/Silver Ratio vs. Dow Jones Industrial Average (DJIA) Weekly. Now, this isn't a gigantic sample size I grant you. But I think it carries some logic and gives us some insight about the relationship between gold and other risk assets — measured by the DJIA.
"This indicates a real and sustainable move into the dollar. It might be a flight to safety and/or liquidity ... take your pick. And it could eventually turn into something much more this time around."
Well, in past I have always commented against Jim Rogers and Marc Faber.They are dooms dayer for Equities and bullish on commodities.As seen above Jim Rogers has proved wrong and clueless.
Marc Faber and Jim Rogers hass always predicted that Dollar will become junk and it on its way.
Marc Faber , owner of Bloom,gloom and Doom website , never speaked about boom but is always a doomdayer to me.
If the world is going to slow down, if PIIGS countries are going to defalut, if China is slowing down, if India is slowing down, then how the commodities prices will keep rising?
If there will be no demand how will the prices keeps on rising?
With just $3-4 bn outflow the rupee went down and became 50.Lost over 10% and India is getting hurt on import bills.Experts who are berarish on US dollars are trying every means of reason to prove it but dollar becomes stronger and stronger.
China has around $1 tr and more in US treasury and no way China can sell it.China has purposefully kept the yuan under check and not let it appreciate so that they have edge on export.
There is no replacement for dollar.Commodities, crude , are traded in dollars.I am not seeing any other currency take place of dollars in near term nor in distant future and hence I feel that dollar should not become junk.Those views are unfounded for and that is my personal view.
I have written many times that due to speculations the prices goes up.Crude, Gold, Silver , Commodities goes up more on speculations then the actual demand.