Coxe: Currency Devaluation Could Send Gold, Gold Shares to New Highs

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In his October 11, 2007, Basic Points report, Coxe speculates that, if the dollar continues to depreciate, forcing the Fed to take certain actions, gold and gold shares "should go to new all-time highs."

BMO Financial Group Global Portfolio Strategist, Donald G.M. Coxe, suggests that current currency devaluation "has the potential to unleash a new round of commodity inflation, led by gold, base metals, food-stuffs and, to a lesser extent, energy."

In his October 11, 2007, Basic Points report, Coxe speculates that, if the dollar continues to depreciate, forcing the Fed to take certain actions, gold and gold shares "should go to new all-time highs."

Coxe believes that "the global economy is being re-liquified because the U.S. appears to have launched into Plaza-style currency devaluation. Central bankers abroad dare not raise their rates with the Fed in ease mode, and their currencies value will continue to rise."

The Plaza Accord of 1985 was an effort by finance ministers of five nations, including the United States, to reduce the value of the U.S. dollar against other major currencies. The action was considered necessary at the time because the dollar had become so strong that it was difficult for U.S. exporters to sell their products internationally, weakening the U.S. economy.

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