“– The U.S. dollar will continue to fall against other currencies.
— Oil will march toward $150 a barrel and other commodity prices will continue to increase, as investors race toward holding real things instead of currencies.
— Gold will march toward $1,500 an ounce as worries about the debt contagion spread.
— Last week, the Euro zone of 15 countries became worth more than the U.S. dollar zone, and will continue to be used as a preferred reserve currency, thus aggravating the U.S. dollar’s decline.
— Central banks outside the U.S. will be forced to cut interest rates as the Americans must to prop up economies.
— Banks and brokers around the world will be shakier and more bailouts — possibly another on Wall Street — will occur.
— Canada’s spoiled chartered banks/brokers will start their whining to merge again, blaming the crisis as another lobbying technique.
— The credit bailout plus the U.S. Presidential election will postpone the bankruptcies, foreclosures and writedowns that must be made in mortgages in order to clean up the housing market. And a lousy housing market means the recession will take root in the U.S. and elsewhere.
— Canada and Australia are lucky. Both will continue to boom, along with commodity prices, and the Canadian dollar will move up in tandem.
— Economics will trump Iraq in the U.S. political contests this summer, forcing McCain to choose Romney as a running mate and the Democrats to sharpen up their CEO cred too.”

More by Diana Francis at The National Post.

Comment:

Since I posted this, the well-staged “rescue” by the Fed has occurred and gold has fallen dramatically, the commodity currencies and commodities along with it.

Is this the end of the PM (precious metals) bull? Probably not. We’re approaching the season when gold sells off, usually; we’ve had such a big run that a technical correction was long overdue. Add to that the intense safe-haven buying of recent months, and a downward move was inevitable. Especially with the dollar putting in its own technical recovery.

Note however, that the dollar’s recovery is only likely to be against the majors, like the Pound and the Euro, and the commodity currencies. Against the Yen and Franc, it’s likely to continue to weaken, with some technical bounces along the way.