This could be the time that turns out to be "different". This market still - after half a year - shows no inclination about stopping the risk orgy. And why should it? With trillions from Uncle Ben flooding the system, money has to go somewhere. And no one wants the greenback. So sell USD, go long just about EVERYTHING else. That's the trade that has been working, and will continue to work it would seem.
The dollar isn't going anywhere. One more time: we had the Seventies, where the link to the dollar was broken. Gold soared. When all was said and done, the dollar, relative to all the other currencies, wound up right back where it started, in the aggregate. Why would this time be any different? Do you truly believe today is worse than the Seventies for the dollar and only the dollar?
Actually no, except for one small detail. USA was creditor nation in late 1970s. We are now a debtor nation which is an understatement. How all this plays out is anyone's guess. But you can forget king dollar, those days appear over until US can get its financial house in order again.
Europe was down close to 2% at one point today and the $ didnt even move. That's worrisome I would think.
financial markets are very fast now and unstable . those 5 year bubble in stock market like we had in 90s is a history I bet we will have another crash within a year. I don't know maybe we will reach all time highs before that . quite possible
euro doing well right now as EU strenghtened ties with Russia. Actually doing well since EU start. eurjpy is dominated by russians. Chineses rewighted from US to EU a bit as well. But, eu is NATO, and nato is US, therfore US can kill that link any moment... so change of trend EURUSD is in US hands. This would then pull other currencies. Waiting for critical level of die-hard USD shorts for that so action becomes (very) profitable. looking beyond propaganda, fundamentally eu economy in worse shape than us. so, here ya go, case for USD up.
What did you mean when you said that EUR/JPY is dominated by Russians? Are you saying that they hold the most Euros and Yen as foreign reserves? Thanks.
Harry Dent called for the start of the next depression in 2008 and 2010, so, I consider his commentary. He gave an update on Friday. Here it is.. HS Dent Great Depression Ahead Book Update #4 Friday, September 11, 2009 We have been looking for this bear market rally in stocks to peak between late July and mid September. Now we are at mid September and the market has continued to edge up near our optimal sell targets at 9,650 - 9,800 on the Dow and 1050 - 1060 on the S&P 500. We have already seen a 50% retracement of the losses in the S&P 500 and a 38% retracement in the Dow which are classic for bear market rallies. It also appears that the Shanghai Composite in China has peaked near 3,500 and it has led this rally but is now failing to make new highs. To summarize: stocks look like they are topping and the U.S. dollar looks like it is near a bottom with strong support at 76 on the Dollar Index. Most bearish forecasters expect the dollar to crash, but note that in the last crash the dollar rallied for many reasons too hard to explain here that we cover in our newsletter. The stock market has been edging up in the absence of bad news, but the odds of negative news should be rising as our last positive short term 10 month cycle peaks here in mid September. All things considered, this seems the best place to sell stocks for those that have not already. Our Decennial and 4-Year Cycles in Chapter 3 of the book point down from around here into late 2010. We expect a stock crash that could take the Dow as low as 1,800 - 3,800 between August and October of 2010. Conservative investors can sell stocks and simply play it safe in a T-bill account, while more aggressive investors can simply bet against the stock market by buying an ETF like SH that goes short against the S&P 500 index with no leverage. The US dollar is a more moderate play and can be bought through an ETF like UUP.
I would suggest at least finding out about Mr. Dent's ideas as he has been more right than wrong over the years. I don't think you can live or die by his exact number predictions but his conclusions have been more correct than not. He has been giving fairly regular interviews on the Disciplined investor podcast over the last couple of years and I have found his predictions to be mostly right on. I do have concerns about the dollar just getting destroyed by Ben, but when this starts hitting our fixed income population that votes more than any other group via inflation, they may have pull it in or risk a crack up of our currency. Another deleveraging Great depression would actually be milder for the country. We have been levering up on credit since Reagan and the time to pay the piper will come one way or another. We have been like a household that keeps opening credit cards to pay off other cards. The bill must get paid or someone has to default.