Recent days have seen a round of stories as to how emerging markets are declining. Argentinian currency is tumbling down, the Venezuelan currency has been greatly devalued, the Brazilian economy got hit, the Turkish lira is collapsing. As one of the commentators of Business Insider summarized, it was a real “bloodbath” in the emerging markets. How will all this affect the dollar economy? How will the USD itself perform?

As we have demonstrated in the Market Overview again and again, the Federal Reserve dropped inflationary bombs. Inflationary in the purely monetary sense by supplying money in almost ridiculous amounts, especially base money figures. During this process some commentators believed that the dollar would soon evaporate. It hasn't and, in fact, the USD Index has been moving higher since 2008. Why? How is that possible given all the dollars that have been "printed" since that time? Doesn't the basic law of supply and demand work anymore? In the January 2014 Market Overview we analyze this critical issue and - as always - we discuss the implications for the gold market.