Slight corrections under way.

We can see in the previous post that gold prices became overbought while the dollar became oversold. These conditions are shown by shaded areas. This will become corrected and price movements resume.

While, I believe that the FED is already doing quantitative easing, it is not doing so officially. The story making the news circuit that if employment and manufacturing numbers will be worse than expected, QE2 will be officially implemented at the November meeting of the FED.

What does this talk mean? Inasmuch as these numbers can be adjusted up or down, the FED has already decided on QE2 and its implementation is just a matter of timing and trotting out the proper excuses.

Another story floating around is that other countries (Japan for example) are already adjusting the value of their currency to blunt the drop in their exports by the drop in the dollar. Another story is that emerging economies (Brazil, India and China) are not that confident of their economic growth, so they are watching their currencies that these do not appreciate. This is a phony story though. China, India and Brazil are experiencing strong growth and do not need to debase their currencies to maintain their export advantage. All these stories are floated by the friends of the Obama regime to make QE2 palatable to the tune of a Trillion dollars.