(CBS) It may surprise you to learn that most of the stock trades in the U.S. are no longer being made by human beings, but by robot computers capable of buying and selling thousands of different securities in the time it takes you to blink an eye.

These supercomputers – which actually decide which stocks to buy and sell – are operating on highly secret instructions programmed into them by math wizards who may or may not know anything about the value of the companies that are being traded.

It’s known as “high frequency trading,” a phenomenon that’s swept over much of Wall Street in the past few years and played a supporting role in the mini market crash last spring that saw the Dow Jones Industrial Average plunge 600 points in 15 minutes.

Most people outside of the industry know very little, if anything, about it. But the Securities and Exchange Commission and members of Congress have begun asking some tough questions about its usefulness, potential dangers, and suspicions that some people may be using computers to manipulate the market.

USD/JPY slipped back after the Fed bough about $8 bln in longer-dated (out to 10-years) coupons which briefly knocked yields down to around 2.80% intraday before backing up to 2.88% late in the day. It held 83.00 and ends at 83.28.

GBP/USD rallied to 1.5945, stalling just below the important 1.5950 level from which cable tumbled earlier in the week. Like EUR/USD, the gains were fleeting and we close at 1.5895.

Commodity currencies were mostly range bound with CAD an under-performer on a further fall in oil today. We are back near $80 after flirting with $90 last week.

The broad theme today was consolidation within a broad dollar rally.

According to a draft of its annual report to Congress, the U.S.-China Economic and Security Review Commission said lawmakers should urge the Obama administration to respond to China’s policy of undervaluing its currency and look for ways to overcome trade barriers with the world’s most populous country.

The commission, made up of 12 experts in trade and defense issues, was created in 2000 to provide lawmakers with advice on how to manage America’s economic and military relationship with China.

“China’s currency manipulation continues to harm U.S. manufacturing and employment,” the commission’s chairman, Ohio businessman Dan Slane, said in prepared remarks. “There appears to be no real motivation by the Chinese to adopt market-based approaches with regard to its currency.”

Critics argue that China’s currency, the yuan, is kept artificially low by hoarding reserves, keeping its exports cheap and undercutting international competitors. China has expressed concerns that a stronger currency could hurt its economy and undermine social stability.

The Obama administration should work with its trading partners to pressure China, the report recommended. But U.S. officials should also act independently to “encourage China to help correct global imbalances and to shift its economy to more consumption-driven growth.”

President Obama and Treasury Secretary Tim Geithner have alreadyraised the currency issue with China, most recently at the Group of 20 meeting of global economic powers in South Korea last week. But the talks have failed to gain traction.

While the G-20 meeting ended with a pledge to avoid”competitive devaluation” of currencies, the leaders postponed more difficult decisions on how to rebalance the global economy.

China announced in June that it would allow its currency to fluctuate in a narrow range according to market forces. But the commission and other critics say the move has been insufficient. The yuan has only appreciated 2.3% so far this year.

Anyone who has read MarketMind in the past will know that I whilst not anti European, I am no fan of the Euro. However, there is a great deal of hype doing the rounds in the market at the moment. It is my belief that reasoned argument. Not wild hysteria is called for. This matter, after all, will have resonant affects across the globe. Not just the Euro Zone.

It is well understood that when a house is burring, the first issue is quenching the flame, not apportioning blame. However, in the issue of the Euro, there has been over the past decade, not just recent months a track record of short short-term cash infusions. These have done no more than create a pause in the path of spread widening. They are not, by any means serving as longer-term cures to sovereign solvency.

The situation right now:

Let me consider the scenario that we have to deal with in the immediate time frame.

European finance ministers have started work on possible aid for the debt stricken banks in Ireland. This has stopped short of an immediate bailout package and risking a setback in bond markets.

In Wednesday morning trade one can see that Irish 10 year Government bond yield widened by 10 basis points (bps) to 8.50% placing the spread (or risk premium) over German 10 year Government paper at 5.70% or 570bps. This spread is wider by 8bps on the day. It is, however, lower than the peak spread seen on November 11^th at 646bps. The cost of insuring against an Irish default has widened by 0.35% or 35bps to 554.5bps over 3 month Euribor. In a genuine blow to Ireland, LCH Clearnet Ltd hoisted the margin requirement for Irish bond trading to 30% of net positions, making it more expensive to buy Irish securities. If one feels at +570bps the Irish Gilts hold value, the potential payoff has been largely ripped away.

Take no heart from the fact that the Ministers of Finance in the Euro Zone are heaping praise on the budget cuts already put in place by the Irish. This is simple moral boosting rhetoric of the kind offered to Greece a month before a full blown rescue was required.

Why is no one grilling the ECB as why didn’t the summer stress test tell us more about the weak state of the Irish banks? They have no credible answer as the test was pitched at the lowest possible level to allow as many banks as possible to pass. Rather than a financial high jump it more akin to financial limbo. The Irish say they can go it alone and will not be asking for money when European and International Monetary Fund officials arrive in Dublin on the 18^th to begin probing the banking system’s needs. That is a mistake as the need is great. The capitalization of Irish banks has fallen by 98% since the peak in February 2007!

It is no exaggeration to say that the integrity of the Euro is at stake. The currency is meant to be underpinned by the stability and growth pact. I have said before how Greece never met the requirements of the pact when it joined the Euro and now Ireland, after current measures to secure the banks is considered, Ireland  has a debt to GDP ratio  of 32%. The Stability and Growth pact sets a limit for this at 3%.

Forget all the polite smiles and happy handshakes. The hard truth is that members of the Euro Zone are struggling to show a united front. Pragmatists are pondering the issue of first Greece, next Ireland and then onto Portugal, Spain…maybe even Italy. The Iberian nations are eager to win the right to stage the FIFA World Cup in 2018. That would be a fillip to the economy as plenty of new build and refurbishment would be called for. MarketMind is in no punch pulling mood. If the Portuguese and Spanish get the nod for 2018; soon after they will be cap in hand for a financial bailout.

My nation, UK, has not covered itself in glory as in the past we have stood away from Euro Zone problems. However, in an act of blatant self serving interest, the Chancellor has indicated that the UK would back support for Ireland. A smart move maybe given that the UK and Irish banking systems have much interconnection. Of course we do not want UK banks to be infected by the Irish but this is a full act of self interest. No more can we point a finger across the channel at the French!

They of course always have an opinion and the Finance Minister, Christine Lagarde, said that if a small package to assist the Irish banks is insufficient, a full state aid package would be available in a few days. Another opportunity for the lady to remind how good French banks are.

Euro Zone politicians never give Euro issues their undivided attention …they always are testing the national mood and are ever mindful of the electoral cycle. In playing to the home crowd, German Chancellor, Angela Merkel has demanded a shift away from Germany funding the lion’s share of bailouts. She believes bondholders have to share the cost of future rescue packages.

Isn’t it brilliant when politicians get involved in the markets! Merkel’s comments led to a run of 13 days solid selling pressure in Irish Gilts and had a negative effect on the prices for the rest of the PIGS group.

Unbelievable as it is, Chancellor Merkel has gone further and indicated that she was in a mood to penalize bondholders for betting against fiscally unsound governments after the EU’s temporary rescue fund runs out in 2013. Will politicians never learn that the market is the only true indicator of value. Markets can be brutal but they are honest and an asset is only ever worth what another market participant is willing to pay for it. If an asset is mispriced why shouldn’t investors be free to openly trade from the short side?

As for  European Unity, forget it. On Monday, November 15^th the Greek Finance Minister, George Papandreou accused the German leader of having created a “self fulfilling prophecy” that has simply harmed the Euro Zone periphery nations. Germany is not taking that line thought very readily and has accused Greece of being totally hypocritical as it has received vast amounts of both German and European support. The German Finance Minister, Wolfgang Schauble was quick to remind Athens that “…solidarity is not a one way street”.

Looking ahead…can a solution be found?

In order for the Euro project to work without a fiscal union, guarantees need to be set permanently in place. Moral hazard has to be eliminated and countries have to agree to work together even more closely than they are now or have done in the past.

On the one hand, European integration seems more real than it has ever been.  It is fair to claim that this has been partially driven by the financial ties the single currency has fostered. Marketmind is more inclined to heap greater praise on the freedom of trade and labour mobility. Still, making the single currency work in future without constant states of crisis solved by short-term panaceas on a ‘case by case’ basis requires a much wider vision and sense of discipline.

I have said before that Europe is best at arranging pointless summitry. It is just able to match the speed of decision taking that is seen in the US when it comes to financial matters.

If those that wish to punish the PIGS by banishing them from the single currency get their way it is the case that  past the exit door lays a return to dark, depressed economic era. Sovereign credit markets may well be closed to such nations and the bill for clearing up the mess will be borne by the strong survivors. The reality is that there is no such thing as an ‘orderly exit.

Since May, and the riots in Athens, we are not enjoying Europe’s finest hour. The lessons being learned are painful and riddled with anger, confusion and doubt.

The credibility of the Single Currency been dealt a serious blow, but this is not the fault of the Euro itself.  Rather what is being reaped now is the crop of poorly planted seeds. Who on earth ever deemed it a good idea to allow into the club any nation that were not structurally ready to handle a single monetary policy. Let those nations get access to capital at an interest rate pitched at one quarter or a fifth of their legacy currency and it is like letting the fox into the henhouse. and declining government borrowing costs was a massive error.

The take away lesson has to be that the structural adjustments, implementation of fiscal reforms and more closely coordinated fiscal policies that need to be accomplished are dealt with without delay. Problem is many across Europe see monetary union begetting fiscal union that in turn spawns political union.

Marketmind does not see the Euro vanishing, but only core holding in Germany, Finland, France and Netherlands hold any intrinsic value. So much for the Euro being a counterweight to the Dollar. Investing in the rest is no more than passing a hot potato. Don’t hold it for too long lest ones fingers are burned.

The three hedge-fund titans alone controlled around 10% of the Gold Trust’s shares outstanding at the end of June, according to the most recent data available. Of course, they staked their claim early, and their view on gold and the dollar now may have changed, as investors will soon discover when these influential funds release Sept. 30 portfolio holdings.

Other exchange-traded products that own gold have also seen rapid asset growth and trading volume, including iShares Gold Trust (IAU 13.06, -0.01, -0.08%), the leveraged PowerShares DB Gold Double Long ETN (DGP 38.02, +0.06, +0.16%), and ETFS Physical Swiss Gold Shares (SGOL 132.92, -0.59, -0.44%).

SAN FRANCISCO (MarketWatch) — Gold does not always glitter, but you wouldn’t know that from surging worldwide interest that has turned the yellow metal red-hot.

Gold has become highly prized bling, as anxious and astute buyers alike, from hedge-fund players to central bankers, flock to the “currency of fear.” Gold at around $1,400 an ounce is almost double what it commanded two years ago, and gold’s price is up almost 25% so far this year alone.

It’s been a great ride. Except gold is a bad investment.

Gold’s feverish run has made a lot of people a lot of money, and though the rally has taken a breather in the last few days, there’s no shortage of flag-waving supporters who claim gold is on a march to $1,600, $1,800, $2,000 and beyond. After all, gold is still well below its 1980 peak, when it was worth around $2,300 an ounce in today’s dollars.

The comment comes a day after China announced rules to curb such inflows by limiting property purchases by foreign individuals and companies. Chinese officials have warned that excessive global liquidity, boosted by quantitative easing measures in the U.S., has given developing countries new pressure from fund inflows.

“We will further strengthen oversight of inbound foreign investment … especially to prevent ‘hot money’ inflows in sensitive areas,” Mr. Yao told reporters after a news briefing. “In accordance with the State Council’s overall demands we need to further stabilize the property market.”

Foreign direct investment in China’s real-estate sector in the nine months ended Sept. 30 came to US$16.6 billion, up 56% from a year earlier, Mr. Yao said, far outpacing overall FDI growth of 16.6% for the same period. For January-October, FDI was up 15.71% from a year earlier to $82.003 billion, the ministry said Tuesday.

China’s government said Monday that foreign companies can purchase commercial property that they plan to use only for themselves. It also reinforced existing rules limiting residential purchases by foreign individuals to one unit, also for self-use.

Mr. Yao also said China’s rare-earth export policies next year will remain unchanged and that China hopes other countries with rare-earth resources can boost their development, adding that China is willing to work with these countries to help exploitation and production.

It isn’t sustainable for China to supply 80% to 90% of the world’s rare-earth metals when it only has 30% of the world’s reserves, Mr. Yao said. He said China’s export quota for this year was 30,300 metric tons, down 39% from last year. He didn’t disclose the quota for 2011, but said it will meet global demand for the metals.

Last week, the ministry said it began receiving applications from Chinese companies for 2011 rare-earth export quotas, but said it will cancel export certificates for companies that violated quotas or environmental protection rules, or failed to meet international standards.

The ministry said Tuesday that China attracted $7.663 billion worth of foreign direct investment in October, up 7.9% from a year earlier. In September, China attracted $8.4 billion worth of foreign direct investment, up 6.1% from a year earlier, following increases of 1.4% in August, 29.2% in July and 39.6% in June.

The scope of FDI and its growth rate for certain months this year haven’t been very large, but “the trend in inbound foreign investment is still not bad,” Mr. Yao said.

Investment abroad by non-financial Chinese institutions in January-October totaled $40.54 billion, the ministry said, without giving the year-earlier figure or a growth rate.

AUD/USD Technicals

• Thursday session:  The Aussie managed to break higher, settling above 0.9863.
• Current Range: 0.9863 to 0.9915
• Further levels in both directions: Below  0.9863, 0.9750, 0.9660. Above 0.9915, 1.0000, 1.0080, 1.0180, 1.0220, 1.03.
• The barrier above, 0.9915 is minor in comparison with the next one above – AUD/USD parity.
• Significant support is at 0.9660.

AUD/USD Fundamentals

All times are GMT. Most important events emphasized.

• 13:30 US Unemployment Claims. Exp. 442K. Actual 439K.
• 15:00 US Philly Fed Manufacturing Index. Exp. 5.1. Actual 22.5. Big surprise didn’t bother the Aussie.
• Friday, 10:15 Ben Bernanke talks.