Chris Lau - Seeking Alpha

Thursday, September 18, 2008

Eyes on the US Dollar. Buy Gold

AIG is the most recent bailout that will cost the U.S. 85 Billion. It's a big number, but in the grand scheme of things, the cost is not unreasonable. In fact, the government might even be able to make a profit from this "investment" a few years down the road. The reward of bailing out AIG is far higher than the risk of global-wide credit market liquidity.

In the short-term, the global reaction to the costs incurred by the U.S. Government need to be monitored. How? Monitor the U.S. dollar. As I had remarked in a previous entry, the USD rallied gallantly, but a sell-signal was recently triggered. My initial short-term price support target for the USD is 77.07.

To profit from this short-term trend, buy gold. It rallied 9% yesterday.
Post a Comment