Pearson: I want to start again with the dollar. This dollar everybody is running it down a week ago. It's got-- Bermanke fellow with his quantitative easing and squirting out all these federal dollars, these Federal Reserve Notes as my other radical friends talk about and the dollar is just -- we're just devaluing our currency. We have all these countries, these countries that aren't even close to us in terms of GDP or innovation or anything else, they're all saying oh, you're devaluing your currency making it cheaper. And here we go with a week long rally of the dollar and you act like you don't think it's over yet.
Newsom: No, I don't and I think it's more technical in nature than it is fundamental. Certainly, the fundamentalists just pointed out don't -- it don't indicate that this- that, you know, that the dollar has the backing of the fundamental side of the market, but doesn't always have to rally and it looks like, you know, if we try to close off the month of November on a rally I think it's going to bring additional dollars in. There's a certain segment of the market out there that's viewing the dollar again as a safe haven. You look at the problems in Europe, you look at, you know, bailing out this country, bailing out that country, this is bringing some support into the dollar and I think it's going to be short term but it does look like if we close off the month strong we may try to extend that into December possibly into early 2011.
Pearson: Let's look at this impact on commodities. Obviously a stronger dollar means that our stuff is more expensive to our overseas buyers. You were on the show a couple of weeks ago and a month or so ago and you made the comment that soybeans in China are very high. They're very dear. That's going to continue. Won't that continue regardless of what happens with currency?
Newsom: I think so, you know, because at the bottom line is it's still going to come down to supply and demand at some point in these different markets and there's still great demand for soybeans in China. There's a great value to them. Now, I know this weekend there's a great deal of concern over, you know, is China going to make another tightening announcement in their monetary policy?
I think that had a lot to do with some of what we saw at the end of the week, but again as we go forward into 2011 the demand for soybeans is going to stay strong. I think it's going to continue to provide support to the market and I think the value of soybeans is going to go up again to the next year.
Pearson: When we look at all the things that are happening and all the moving parts that occur in agriculture and the impact of commodities and the people wanting to own them obviously the government has - we've had three quarters of a trillion dollar stimulus bill. We've been spending a lot of money. We had an election a couple weeks ago and said ok government stop spending money, start getting your house in order. Could that be a background for a further strengthening of the dollar if that indeed becomes what happens? We've got gridlock it would appear in government.
Newsom: There's an outside chance that could happen. You know everyone would say how is it possible if we pump this many dollars into the system how could that actually strengthening the dollar? But if we start to see some economic turnaround from all of this and we do start to see some stability and we start to see these economic reports become more consistently bullish then the idea is we would follow that up sooner rather than later with some sort of interest rate increase possibility and that would be the fundamental support that the dollar is looking for to really start to push higher.
Pearson: Well, we'll see what happens. General economic conditions improved. Gentlemen, that's good news for the livestock sector. Generally if demand is still strong, we're still tight on corn and beans and you talk about the fact South America is not looking great at this point. Of course it has, like I say, like we said in the show, we've got to kill that crop off a couple times at least. We could be setting ourselves up for a nice recovery in the agricultural commodities certainly but what about gold? Everywhere I go it's still gold fever out there.
Newsom: Yeah and that's one thing that's sort of bothersome is where everyone is still talking about gold is, you know, gold is going to keep pushing higher. Well, at some point it does run out of buying. It is a safe haven market just like the dollar is viewed right now. I think it has this undercurrent of support. I don't see the gold market crashing down any time soon even if the dollar rallies. I think gold is going to hold relatively stable. Do I want to be the one buying it up around $14/$14.50? Not necessarily. If it pulls back I think it's going to look pretty good going into 2011, but I want to give it some room to breathe in here for a little bit.
Pearson: Alright. So, don't call off the gold bugs just yet.
Newsom: No, not quite.
Pearson: Alright. Darin Newsom, always good to have you with us. Thanks for joining us on Market to Market. Of course here on Market Plus as well. By the way make sure you talk to your local public television programmer if you're just watching us on the internet. If you'd like to see us on a live show on your local PBS station just call you're local PBS programmer and say hey, why don't you carry Market to Market for us? If you have any questions, you know, drop us a note on our website and we'd love to help you out. And from all of us here on Market to Market, for Darin Newsom, I'm Mark Pearson. Have a great one!