Gold, silver range-bound ahead of Fed release

In the Lead: “Fedsday Cometh! Plus, More Sci-Fi! ”

Mr. Duncan is not alone in his assessment; Fitch’s Ratings just this morning raised the-redder-than-the-red-flags-in-Red-Square flag on China’s banks, warning that some of them might be looking at rather questionable loans on their books. “We are pretty concerned about a big problem with bad debt over the next few years associated with local governments, property and all of the excesses that have been built up since the stimulus of 2008,” said one senior official at the rating firm. In the background, trading bets against the yuan have (not so quietly) risen in recent weeks…

Speaking of potentially declining and/or rising currencies, despite the ample dollar-obit talk still sloshing around in the ‘system’ out there, at least one firm opines that the greenback’s prospects look pretty decent as we head toward the second half of this year. Morgan Stanley analysts feel that the US currency might trade at $1.36 against the euro and gain lost ground against commodity currencies as well (the Aussie and the loonie).

Morgan Stanley also envisions the US dollar reaching for $1.49 mark against the British pound, as structural issues in the UK dent that currency further. That said, MS is not so sure the dollar can sustain its projected near-term gains into 2012. There’s the matter of that pesky “fiscal sinkhole” to consider, still. This is why the Fed keeps warning US lawmakers not to be playing around and dance the politics of the budget.

There are, of course, other politics to also consider from now through 2012…but they are still based mainly on economic conditions. While clearly less than a majority (44%) of Americans says they are worse off under the Obama administration, only 30% of them say they are willing to unequivocally support Mr. Obama’s re-election in 2012. The pattern of voter (dis)approval currently being experienced by Mr. Obama harks back to similar difficulties that one Mr. Reagan faced in his early Presidential career. The culprit at that time? You guessed it: A slowing economy.

Those who might be looking at alternatives to Mr. Obama are disappointed that his promises on jobs have not materialized. That said, do not jump to the conclusion that folks are enamored with the GOP or its current crop of would-be Presidents (or President-esses?). Fully 60% of polled Americans feel that any Republican candidate would be so far to the right on social and fiscal issues that they will become impossible to support in a Presidential bid.

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