Something is happening. The superificial flight to 'quality' may be ending. Why would you want to own a currency where people have so little trust in its banking system you will only deposit your money with the government? Look at gold, euro, aussie, everything. Forget carry trades... This looks like a dumping, a breakout and maybe the start of a very real trend.
Definitely worth watching... also, interesting divergence between the stock market and the currencies/commodities today.
This last week is different, and it's not just the non "US Dollar" currencies. Despite treasuries rallying above November highs, US equities are still holding approx. 20% above November lows.
We are now in an era of asset price elevation. Shorting any assets is a tough proposition from here. Just a function of more money in the system. The markets are finally getting that. And by the way, goods may start moving en masse soon - the shipping indexes are coming up.
While I do believe that eventually we will reach a point that you describe (all assets going up), I find it hard to believe that we've reached that condition so quickly after oil was at $40 a barrel. My initial thoughts is that this is just the clichéd dead cat bounce after the carnage from July through to December. In addition to watching oil, I will also keep an eye on the Baltic Dry Index, and also DRYS EXM etc. I'm happy to be wrong (and that you are correct about asset price elevation), because I am holding a lot of gold as a core portfolio holding, because I believe that the endgame for a lot of debt is repayment by fiat currency destruction. Hugh Hendry could be right (that gold goes to the 500s before it goes higher), but I'm not smart enough to time my gold buys.
Thanks for the thread. Watching USD declines against many currencies this morning and first thing come to my mind is that ET might know something...
There is ZERO reason for a "Strong USD". Deflation is the only way that the US economy will work throught this perfect storm. Deflation across the bord, from Energy to goods, to the USD. Problem is, "INFLATION" to follow is going to make the Carter Years look attractive. Nevertheless, Manufactures are not able to compete with the low labor cost that the Asian Tigers and India have. The lower cost of producing in Emerging Markets is making Manufacturing in the US, less attractive. In order for the West to compete with the 3rd world countries, is to deflate, period. IMHO, we will have a few years of Deflation to be followed by serious Inflation. Those who are smart enough to make money in these times will make a killing....those who are not, will fall.