$6 Gas? Could Happen if Dollar Keeps Getting Weaker

[dkf]

A dollar plumbing three-year lows is hitting Americans squarely in the gas tank, and one economist thinks it could drive prices as high as $6 a gallon or more by summertime under the right conditions.

With the greenback coming under increased pressure from Federal Reserve policies and investor appetite for more risk, there seems little direction but up for commodity prices, in particular energy and metals.

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Michael Pento, senior economist at Euro Pacific Capital in New York, says there is an almost perfect negative correlation between the falling dollar and oil prices—minus-0.9 to be exact.

"When you have negative correlations that strong, it's not hard to understand that the reason why we're having this price spike in commodities is primarily because of the weaker currency and not because of shortages of oil or international tensions or global growth," Pento says.

http://www.cnbc.com/id/42683030/

[aquart]

1. OR we could tax the rich. And regulate vital commodities.

In saner if less civilized societies, profiteers and hoarders in times of scarcity were hanged, or shot, or dismembered, or in other ways treated with the loathing and disrespect they deserve.

Or perhaps I'm thinking of sci fi.

[masmdu]

2. Technical analysis indicates $ to strengthen from here...

A large A,B,C flat (A to Jan 09, B to June 10, C to Now)has just completed with an ending diagonal fifth wave to complete the C.

The dollar should immediately begin to become stronger. First resistance at 79 (beginning of ending diagonal) then on to 89 and besting of June 2010 highs.

[dipsydoodle]

5. Only if the interest rate is increased

and then the ECB doesn't increase their rate further.

[masmdu]

7. Perhaps. But that is what appeals to me about technical analysis...

This is an inflection point. Either the pattern I discribed plays out or it doesn't. It matters not to me which way or the reasons why. Eitehr way it will inform one of the direction of the next move.

Determine the likely direction and enter with stops.

[kentuck]

3. What a great way to get rid of this deficit and debt!

If only our elected politicians had the courage and foresight to tax it.

[Dj13Francis]

4. uh, yeah.

Then it'll be seven. Then soon after that, eight. Then nine, followed by ten in quick succession. Then, well, I think you see where I'm going here...

davidjamesfrancis.com

[WinkyDink]

6. No. Where? One word: "Argentina." Yeah, mega-inflation couldn't happen there, either.