Wednesday, November 22, 2006

Is "The Hammer" about to have his Lamont moment?

I'm in the midst of excavating a water drainage trench around my new home site so I don't have much time to write, but as I promised, here's a few thoughts.

1) Is Henry, "The Hammer" Paulson about to have his Norman Lamont moment? Norman Lamont was Britain's Chancellor of the Exchequer when the GBP fell out of the ERM.

Watching Gold trade these days I get the feeling (and it is nothing more) that the US$ is about to suffer a substantial fall, (which implies many commodities would jump in price) in the face of intervention that gets swamped. $630 seems to be a line in the sand on Gold.

2) Google: Market Cap is currently north of $150B. Theoretically one could trade Google for 238 million oz. of Gold, or more than 6,600 tonnes (long). If "The Hammer" has his Norman Lamont moment at least we could trade Google for all the IMF Gold (or any other single central bank holding).

3) Google: a monetary unit of measurement - The military just asked Congress for about 1 Google to fight the wars in Iraq and Afghanistan. Thus far the US has spent a bit more than 3 Googles on the war.

I feel better already.

Have a Happy Thanksgiving


STS said...

Tough to read a headline about "The Hammer" and Lamont without puzzling over an image of a primary challenge to a congressman who has already resigned his seat.

What is it about gold's trading behavior that makes you suspect the dollar is having it's Wile E. Coyote moment at last? And is the Euro still the wrong way to play the dollar drop?

Dude said...

It was just a gut sense that something was going to break.

I didn't bet on it.

The right way or wrong way to play a $ decline will depend on your view and trading strategy.

I prefer Gold as it suits my view and long term trading strategy.