Dollar hits new low, oil and gold soar
Dow ends February with triple-digit loss

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Posted: February 29, 2008
7:08 pm Eastern


By Jerome R. Corsi
© 2008 WorldNetDaily


The U.S. economy continues to weaken, with a drop of 315.79 points in the Dow Jones Industrial Averages Friday, the last trading session in February, to close at 12,266.39.

In testimony to Congress just days earlier, Federal Reserve Board Chairman Ben Bernanke strongly suggested the Fed may cut rates again next month to avert a recession, sending the dollar to new all-time lows against the euro for the second day in a row.

According to Reuters data, the dollar hit a session peak of $1.5238 against the euro, closing slightly up from that low, at $1.5185.

The euro has surged almost 5 percent as currency market experts worried the dollar might be near entering a free-fall environment, if the Fed persists in further rate drops.

On the U.S. Dollar Index the dollar closed at 73.70, reflecting a decline of about 4 percent this year and 39 percent since early 2002.

Intra-day trading hit a new US Dollar Index all-time low of 73.56.

"The Fed is in a dilemma," WND reported on Aug. 27, 2007.

"If it lowers the Fed Fund target rate, the dollar will suffer on world currency exchanges. A dollar sell-of will trigger a new stock market sell-off," the report said. "If the Fed holds or raises rates to support the dollar, it will almost certainly prompt a massive stock sell-off."

WND also reported then regardless what the Fed did, the Dow was likely to stay weak, correctly forecasting the Dow was likely to drop below 13,000 and begin testing a new support level at 12,000, the trading range the stock market is currently experiencing.

The lower dollar caused oil and gold prices to hit new highs. <>P>In intra-day trading on Friday, oil traded for an all-time high of $103.76, while gold traded at a intra-day record high of $978.50.

The Associated Press reported gasoline prices rose 3 cents overnight to a national average of $3.164 a gallon, edging closer to last May’s record of $3.227 a gallon, while diesel price jumped 1.5 cents to a new record national average of $3.642 a gallon.

Wall Street traders have begun talking about prices that may soon hit levels of $120.00 a barrel for oil, $4.00 a gallon for retail gasoline, and gold at $1,000 an ounce – prices that at the beginning of 2007 were widely regarded as unrealistically high levels, with a dollar that was only starting to show signs of the weakness now being experienced.

In his press conference on Thursday, President Bush acknowledged the economy was slowing, although he continued to resist using the "R"-word to acknowledge the economy had entered a recession or was even at the brink of a recession.

"I don't think we're headed to a recession," President Bush continued to insist, as the nation went into the last weekend before the Democratic Party's important Super Tuesday contests in Ohio and Texas next week.

In Ohio this past week, NAFTA became a subject of debate between Democratic presidential contenders Barrack Obama and Hillary Clinton, both of whom did their best to distance themselves from the free trade agreement, both pledging to renegotiate NAFTA if elected president.

Since President George W. Bush took office, Ohio has lost an estimated 50,000 jobs to outsourcing, causing the state to experience some of the highest rates of unemployment in the nation.

According to Bureau of Labor statistics, Ohio had the fourth-highest number of unemployment insurance claims in the nation last month.

The stock market's continued weakness reflects an increasing likelihood that the mortgage crisis has not yet bottomed out, with the unfortunate result that more losses from Collateralized Mortgage Obligations in bank asset portfolios are yet likely to be realized.

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