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Tuesday, November 02, 2010

All that glitters

It's US mid-term election night.

The exit polls are predicting a hammering for the Democrats. That should mean good news for the dollar and bad news for precious metals on the markets.

After all, the perception is that the Obama socialists (US perception, not mine) are flagrant tax-and-spenders, while Republicans are fiscal scrooges.

But of course, these aren't ordinary Republicans. These are people who have to issue ads telling the electorate that they aren't witches. These are ill-educated, small government looneys who have, with the support of frothing-mouthed cheerleaders at Fox News, successfully eaten up the GOP.

The markets like Republicans. But they don't like looneys. They probably like Obama better than they like looneys. (After all, he did bail out Wall Street.)

That fact, coupled with the inevitability of Ben Bernanke's great dollar printing machine going back into overdrive tomorrow, is driving the dollar back down and precious metals up.

Today, the Aussie dollar smashed through parity with the greenback. Expect the Swiss franc and the Canuck dollar to do likewise shortly.

What does this all mean for Ireland? Well, firstly, we're still screwed. The Germans are keeping the euro high in the ongoing currency war, meaning we're buggered on exports outside of the EU (ie to two of our nearest and biggest trading partners, Britain and America, who are both printing money like it was going out of fashion.)

Secondly, a bunch of Tea Party nutjobs won't look outside their narrow national interests. There will be more rabble-rousing about illegal immigrants, and more demands to repatriate jobs back to America. Either President Hopey Changey concedes to some of this rhetoric or he kisses a second term goodbye over two years of lame duck administrating.

The gelding of the Obama administration in conjunction with the destruction of the GOP by Tea Party malignants is not and cannot be good news for us.

Right now, Ireland is so far gone that we need a white knight to save us, and the Germans won't play ball, and the Americans are taking off their armour and hiding in a cave. And for all the Fianna Fail rhetoric and ass-kissing in Beijing, I wouldn't expect any help from the Chinese.

After all, they made their money playing a rigged currency game for the past few years, leading to the current beggar-thy-neighbour currency wars.

In 24 hours, America will look inward. It will look bankrupt. And it will look stupid.

And our Uncle Sam won't be playing sugar Daddy to Ireland possibly ever again.

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