Why is the U.S. Dollar going up in value?Submitted by LibertyBaby on Wed, 09/28/2011 - 23:34
Most of the reports about the huge Metals sell-off (silver from $44 down to $30) are identifying the cause as "strong demand for the U.S. Dollar".
The Dollar index has indeed risen to nearly 78 (from the low-mid 70s), but this raises a few questions here:
1. Why would the U.S. Dollar be rising in value? There has been no credit tightening, no major reductions in U.S. Debt, no end to the U.S. Wars and overseas spending, and no announcements by the Federal Reserve of any big shift in policy. So why the jump-up?
2. The colossal nosedive in Metals is totally out of proportion with the relatively moderate uptick in the U.S. Dollar. So why would Metals crash altogether (and yes I consider a $44 => $30 cliff-dive to be "a crash").
3. Obviously the Metals market is manipulated, but there has been no new big events like Goldman Sachs going bankrupt, or a CitiBank meltdown to shock the market, or trigger some new manipulation like 2008. Yet it sure feels like we are in a deflationary 2008 meltdown. So what explains this?
Thanks in advance for any thoughtful (and detailed) replies.