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Can the US dollar stay strong?

China Daily | Updated: 2013-05-17 08:28

The price of gold continues to fluctuate because US "financial wizards" are still using the futures market to influence it. Also, huge amounts of capital have been reportedly withdrawn from the gold market and invested in shale gas to boost the natural gas industry. But, an article on www.gmw.cn says, can the so-called shale-gas revolution help the US dollar to remain strong? Excerpts:

American financial oligarchs are taking measures to suppress the price of gold mainly to maintain the value of the US dollar. Unlike gold, the dollar can be issued at will to suit economic needs. But this could easily lead to serious inflation.

Besides, the growing investment in shale gas, too, is responsible for a slump in the price of gold.

But American financial managers' plan to maintain the strength of the US dollar may not be successful in the end. If the abundant availability of shale gas causes supply to exceed demand and energy prices to decline, other countries will use the opportunity to increase their reserves of natural resources, including gold, forcing the US dollar to depreciate. Contrarily, if the investment in shale gas doesn't yield the expected results in the short term, commodity prices will increase sharply and the value of paper money, including the dollar, will decline.

American "financial wizards" should, therefore, respect the law of demand and supply to keep the dollar strong, instead of fiddling with financial tools to meet their ends.

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