2011-07-27

Fears that the U.S. currency will lose its AAA rating

The gold price oscillated near the $1,617 per ounce level Wednesday morning while negotiations on Capitol Hill over the debt ceiling remain ongoing. The price of gold backed off its overnight high of $1,617 per ounce despite weakness in the U.S. dollar. The euro climbed to 1.45 against the greenback on fears that the U.S. currency will lose its AAA rating if a deal to raise the $14.3 trillion debt ceiling is not reached by the August 2 deadline.

In an interview with Dow Jones, Jim Rogers was back at it criticizing the economic policies of the U.S. government. “All this stuff in Washington is basically a sham, a charade…they’re just trying to get publicity,” Rogers claimed.

He went on to predict that although the U.S. will raise the debt ceiling by August 2 and avoid a technical default, “everything is going to get worse…Everyone already knows that the U.S. has lost its AAA status. Anyone who knows what is going on already knows that the U.S. is now the biggest debtor nation in the history of the world. It’s only S&P and Moody’s that haven’t figured out what is going on. The investment world knows that the U.S. is not AAA.”

Rogers – known for his bullish stance on commodities and the gold price over the past decade – did not explicitly discuss the yellow metal in this latest interview. However, he did note that he remains very bearish on the U.S. dollar over the longer-term, which would likely support the price of gold and other commodities going forward.

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