Energy Watch…

http://news.moneycentral.msn.com/provider/providerarticle.asp?feed=AP&Date=20060610&ID=5786820

“McAskill says tapping the North’s abundant natural resources holds particular promise.

“They have gold, silver, zinc, masses of iron ore, all that the rest of the world, particularly China, needs right now,” he said.”

The reason why I mentioned Gold in the context of North Korea is the following: http://www.indiadaily.com/editorial/9259.asp.

On CNBC European Squawkbox they had the guy in for an interview and if I remember correctly he said that North Korea had some resources like Gold.

Though, the ECB argument I cannot buy. The reason is trade, and the pressure by business, and the people: http://www.timesonline.co.uk/article/0,,6-2421880,00.html.

The guy making the comment is making things a bit over-dramatic, but the ECB does have to take into account the economies. Their talk will be tough, but they can only be so tough. If exports were to drop off then things would get very very hard for the ECB.

As for the Euro/Dollar, I’m not sure that the ECB would panic were there to be additional 10% erosion in the exchange rates. Neither would the Fed as it all depends on how fast and under what circumstances this occurred.

Disclosure: Comment written by a CrossProfit analyst and may not reflect the opinion of CrossProfit.com.
http://www.crossprofit.com

Interesting read here. Though my point was that very often entirely unrelated events would cause something else to spike in price. You know the *logic* of the markets. But I like your idea about the currency and gold.

When you say gold do you say that because North Korea produces gold?

Regarding the pegging of the Euro. From talking to people we always felt the peg was 1 to 1. But your little insight on 1.17 peg is interesting. Does this mean that the Dollar could fall another 10% before panic sets in the ECB?

Just two short comments. First, North Korea declaring war (seriously taken or not) would not have an effect on oil as they do not produce and can not disrupt the supply from the Persian Gulf. If anything it might have had an affect on currencies and perhaps gold.

Second, when the Euro was first introduced the exchange was pegged at $1.17 to 1 Euro. The Dollar then appreciated to 0.85 to 1 Euro, went back to parity and is now around 1.28 to 1. From the Euros inception the Dollar is currently devalued vs. the Euro about 10%.

Disclosure: This comment was written by a CrossProfit analyst and does reflect the opinion of CrossProfit.com.
http://www.crossprofit.com