Dollar Resuscitation

The dollar was practically code blue last week. Bill Gross, head of PIMCO (largest holder of U.S treasury debt) dumped all of the U.S. debt they were holding in anticipation of the U.S. running out of buyers for their notes (primarily the government buying their own securities back). The evidence of a collapsing dollar and increasing interest rates were there. The dollar was declining, the printing presses were printing money as fast as they could, gold and silver were rising, and the government was spending. Japan's earthquake was and is very tragic, but to some degree it provided a momentary breath of life for our currency, at least in the short run. The U.S. announced that it will continue to buy up its own debt. Translation, apply a butterfly bandaid to the huge gash and hope it holds the bleeding for a while. I personally think we'll hit 8-10% mortgage rates by the end of the year, but for the next 3-4 months we have a reprieve. I see gold and silver prices continue to fluctuate slightly, but not far from where they are trading now with a dramatic rise in the fourth quarter.