The Yen Looks Oversold
It should be apparent to anyone who can read a chart that the Euro, Swiss Franc, and Gold are all contra-dollar currency trades. Since all these are 'priced in dollars' in the crosses and these charts its almost a no-brainer. It is in looking at commodities and metals in OTHER currencies where one gains knowledge of the free market dynamics without the distortion of the dollar hegemony.
In other words, the US dollar is a distorting lens. It would not matter overmuch, except it is the "world's reserve currency" and is the currency used to denominate the world's most sought after commodity, oil.
If the G8 would like to do something constructive, 'saving the dollar' is not the way to do it, since the managers of the dollar have showed themselves to be hopelessly untrustworthy. Rather, a new global pricing mechanism for key transactions should be proposed by some neutral party, such as Russia or China.
We would suggest a basket of the most significant free floating currencies of the most significant trading countries. The problem is that the mideast nations have no currency of their own. They need to eventually address this. If they had any sense they would select a bimetallic standard of gold and silver. We doubt this will happen.
