The dollar has risen due to Fed chairman Ben Bernanke's assurance that the Fed will tighten monetary policy down the road to prevent "the emergence of an inflation problem." This is, however, a qualified assurance as Bernanke has again emphasized that he will only raise rates "as economic recovery takes hold." This begs the obvious question, what happens if economic rcovery doesn't match expectations? Already, the American situation is being termed a "jobless recovery." Raising rates in the current environment would certainly cancel any fragile gains in the stock market. On the other hand, waiting for a jobs recovery (which is unlikely to happen any time soon) increases exponentially the danger of waiting too long to reign in the cash. Bernanke is in a box and he knows it.
Friday, October 9, 2009
"Dollar rises on Bernanke comments"
Has the bond between Venezuela and Iran Grown Stronger?
Last week Chavez’s joke about Venezuela’s potential transfer of nuclear materials with Iran, was not a source of amusement for the worried West. In a televised Cabinet meeting as Sanz, Venezuela’s Mining Minister walked in, Chavez posed the question: "How's the uranium for Iran? For the atomic bomb?"
Last month, Chavez attracted attention when he announced that he was asking for Russia’s help to develop nuclear energy in Venezuela and when Sanz reveled he was asking Iran to help Venezuela locate its own uranium reserves. Experts say that Venezuela hydro-generates 75% of its electricity and so a nuclear-energy program is not exactly needed. Also there is speculation whether Venezuela really does have “a lot of uranium” as Iranian experts have concluded.
Venezuela has made an agreement for Iran to purchase 20,000 barrels of gasoline a day and Chavez insists that Iran is enriching uranium for peaceful purposes. Chavez however has stated that if Iran is accused of building an atomic bomb and economic sanctions are imposed this will not affect their gasoline agreement.
The West is slightly worried at how far Chavez has taken his relationship with Iran, as his harmless mocking attitude might take a serious turn.
