By Dominique de Kevelioc, de Bailleul
Beacon Contributing Writer
Monday, May 17, 2009�At the open of Asian trading, the fight for the 1.23 Euros to the Dollar level turned ugly, with the mighty hope of a cohesive Euro zone currency fading fast in the onslaught. Gold spiked more than $10 in the slugfest, while the Euro plunged to the 1.2233 level in increments of 10 pips at a whack. Investors anticipating the debt contagion spreading to the UK pounded Sterling into the dirt, dropping the pre-WWII reserve currency as much as 3.8 cents against the Dollar in the early going.
Not a peep out of Brussels, Frankfurt or even a local bar in Dublin was forthcoming this weekend, flaming speculation of EC indifference to a lower Euro. However, at 5:42 a.m. EST, the Euro�s fight back to 1.2319 may be evidence of a �stop the fight� defense of the Euro after all, not from traders looking to get crushed in the �pre-crash zone,� but from a Maginot line defense more likely coming from French ECB bankster Jean-Claude �Tricky� Trichet, who, apparently, likes to play possum with �speculators� from time to time.
Is Trichet quietly supporting the Euro directly in the currency markets? Not sure, yet. That�s why the master of deceit is referred to as Tricky Trichet in the first place. And sometimes he tricks even himself, as when he recently said he wouldn�t buy Club Med bonds, then, changed his mind and bought bonds as if he was paying with funny money. Trichet has lost some credibility during the crisis. �Twitchy� Trichet anyone?
At 5:59 a.m. EST, the Euro shows a 1.2298 bid. The fight rages on, with traders on the sell side taking on the defiant spirit of a Thai �Red Shirt.� A failure at the 1.23 handle could mean an additional 5-cent drop in the Euro, according to technical analysts following the Euro zone woes. Predictions of $1,350 gold and $23 silver would turn out to be quite conservative.
At 6:35 a.m EST, the Euro is gaining traction. Gold and silver trade down by $13.00 and 32 cents, respectively, now trading in the red. For now, 1.23 holds. But the week is still young. Let�s see the next bag of tricks the U.S. has in store for the Euro. The Moody�s and Standard & Poor�s scam worked wonderfully, but it can�t be used again. Instead, the market awaits the next shoe to drop out of the Imelda Marco closet-sized inventory of U.S. salvos of shoes thrown smartly at the EC.
A trillion-plus dollars worth of U.S. Treasury auctions cannot fail even once �The Black Swan� author Nassim Taleb warns. So the currency war rages on.
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