Dollar Whacked
May 11th, 2009 | By Doug Casey | Category: US Dollar & Forex TradingIn the currency market, the dollar crashed against the euro. Late Friday, the euro was trading at $1.3627 vs. $1.3403 on Thursday.
The Labor Department’s unemployment figures were the most anticipated data of the day, and they came in gloomy indeed.
Labor said that, in April, there were 539,000 jobs lost, while the unemployment rate skied to 8.9%, the highest level in 26 years. Dreadful by any standard, yet it was an improvement, representing an easing in the pace of massive job destruction that had averaged 680,000 over the previous five months.
In addition, job losses for February and March were revised higher by a combined total of 66,000.
“It is a sobering toll,” said President Barak Obama. “We’re still in the midst of a recession that was years in the making and will be months or even years in the unmaking; and we should expect further job losses in the months to come.”
“While the April employment report provides glimmers of hope, obviously, conditions are going to have to brighten a lot more to make that forecast a reality,” wrote Stephen Stanley, of RBS Securities. “This looks very much like an inflection point, and the corroborating evidence … all suggest that the pace of layoffs is finally beginning to abate.”
But analyzing the consequences, Ian Shepherdson of High Frequency Economics wrote that, “Soaring unemployment is depressing wage gains,” and that is “seriously bad news because without wage gains people can’t deleverage unless they cut spending deeply.”
Meanwhile, across the pond, the European Central Bank cut interest rates to an unprecedented low of 1%.
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Doug Casey is a contrarian investor, sought-after public speaker and author of several books. His work "Crisis Investing" held the position of # 1 bestseller on the New York Times list for 26 consecutive weeks. Doug's unusual views on the economy - and just about everything else - have gained a huge following in the investment community, and it certainly helps that his stock recommendations of undervalued junior exploration companies have made his subscribers millions. Now in its 27th year, Doug's monthly newsletter, the International Speculator, is one of the most established and esteemed publications on gold, silver and other natural resource investments. Together with the Casey Energy Speculator, it covers a broad range of carefully selected stocks with the very real potential of double- and triple-digit returns within 12 to 24 months.