Gold just hit US$1,000 an ounce…oil is at US$111/ barrel now. Gasoline futures just rose to an all-time high (even though the “summer driving season” hasn’t hit yet). I don’t even want to think about how much we’ll be paying for gas this summer.
And it wasn’t just oil and gas…
* The euro hit an all-time high (once again) against the buck at 1.5624.
* The yen is at parity with the dollar (USD/JPY = 100). It may not be long before the Swiss franc reaches parity with the dollar. Meanwhile, the Canadian dollar is still “better than parity” with the greenback.
* The U.S. dollar index hit fresh lows at 71.80.
* The Singapore dollar just hit fresh highs against the buck.
Not to mention that food costs are still soaring…foreclosures on homes are still rising…in fact, bank repossessions just doubled last month over the previous month.
So what am I trying to say…it’s ugly out there. It’s going to get even uglier in the near term. Unemployment will rise, more firings will happen.
Economies can’t turn around on a dime no matter what “rabbit” the Fed pulls out of its hat. So you’d better tighten your seat belt and get ready for the ride. If you live in the U.S., plan to save back some cash and trim the fat financially. You’ll be glad you did.
As the U.S. dollar continues to sink in the near term, most anything priced in dollars will become much more expensive: gas, oil, electricity, gold, silver, food, etc.
So watch your spending…because you’re going to see many around you in tough times.
The good news: Many currency trades out there are soaring, particularly the “anti-carry trades,” I’ve been talking about for quite some time. In fact, betting against the traditional carry trades (EUR/JPY, GBP/JPY, EUR/CHF, etc.) has been a really good strategy these past few weeks.
Also, my favorite high-yielders like the Australian and New Zealand dollars have soared. So you’re a part of a knowledgeable crowd that’s positioned in these currencies, you’ve been able to counteract the falling buck and higher energy costs.
SEAN HYMAN, Currency Director