Back to the crushing of the dollar with a rising market. Is it back to the same old situation? Unbelievable. That was the easiest trade I've ever made.
The dollar is a problem. That's why I don't think they'll be aggressive cutting the fed funds rate. The stock market is too myopic right now.
At a macro level, I think they are alot more willing to bend with the dollar than with the stock market... Pretty soon we'll have a dollar carry trade the way the Fed is behaving. Most rich americans could care less that it costs way more to buy a meal in Paris or Milan than in 2002. The ones they are protecting all live inside the kingdom of the U.S. - Vail, Miami, Hamptons, L.A, Vegas.... I say the dollar could easily lose another 10% here. The only Caveat is the foreigners dumping Emerging Markets and cashing into U.S dollars, nullifying this idea. ... But I say its still way more likely the U.S dollar will keep falling.
It's not about meals in paris. If the dollar drops more than this we are getting to levels where there will be crazy inflation within the country. Otherwise why not just let the dollar drop to nothing if its good for the economy? Point is right now the US market seems to only go up at the expense of the dollar. Thats not a good sign at these levels. Somethings gotta give. What's a possible way out of this nightmare? I don't see any.
protect yourself and bank in goldgrams. Try to make as much money as you can off the drop, and scoop all you can afterwards. it is how most wealthy individuals(made indiv.) made their wealth. If you make a billion off the market tanking and they call you a bad man, just give half to charity. and do it again. ...
You're right Bouch. The fact is that as long as the U.S can continue support financing its debt with a falling dollar serves in a way to magnify inflation, but it is going to get pulled back in as China smartens up about the situation. But given that the U.S is now a net imported of goods, its inevitable to see stronger inflation coming. Maybe this pretend functioning of the U.S to control its credit problem will only lead to a bigger crunch down the line when we end up with stagflation, say in 2009. Either way, I don't live in the U.S so I don't really care what happens aside from real trauma and the fact that their low dollar is threatening basic jobs in Canada, particularily in Ontario at this point. It simply means that Canada has to do more to differentiate ourselves and our products from any basic thing that can be produced in the U.S via a lower dollar.