Discussion in 'Economics' started by doug456, Nov 26, 2003.

  1. rodden


    Do you see further consolidation here 390.00 - 400.00, or do expect a push through next week? personally, I shorted golds today in the hopes that Al Qaeda will be quiet over the weekend and mini-corrections in gold and the USD Monday will cause a lot of these golds currently hugging the tops of their formations on unconvincing volumes to correct a little. ( only need about 2% ).

    Even if the currencies race-to-the-bottom decelerates, on the long-term Macro level, I see the whole squabbling currency collective declining relative to the commodities collective. Gold should get an additional kick from the accelerating revival of gold as currency.

    Apologies for the tardy response to your post.
    #21     Nov 28, 2003
  2. Pabst


    Hi Rodden

    I don't trade metals so I can't give you any wrong short term advice.:D

    But I do agree strongly with your macro hard currency vs. commodity POV.
    #22     Nov 28, 2003
  3. rodden


    Too bad. Sure could have used some wrong advice. Seems the right advice always costs me.

    Best of luck.
    #23     Nov 28, 2003
  4. Vak,

    You probably a stock trader, not FX trader.
    If you take a look at recent USD fall, the fall has been broad-based. With USD index fell below 90.00. This, in turn, resulted in rallies in EUR/USD, GBP/USD, AUD/USD, and a dip in USD/CHF with the exception in USD/JPY where the fall, somehow failed to materialize due to JPY weakness – also broad-based, against other currencies.

    Aside from JPY, all EUR, CHF, AUD, and GBP strengthened against USD… and JPY.

    This is not uncommon, though, for USD/JPY to not following USD fall. Bank of Japan have been aggressively intervening to halt any fall in this pair. That, would be another issue. During the last few years, after the joint intervention to prop up ailing EUR/USD (when it dropped as low as 0.8225), there’s no other CB than BoJ (of G7 countries), that intervened in the market. One exception was a few months ago when BoJ operated during US session to ‘surprisingly’ intervened to buy USD/JPY.

    Some thought that the Fed intervened, but I believed that it was BoJ that intervened via the US banks. The Fed perhaps just gave the nod.

    What I stated as I am not certain about ‘strong dollar’ mantra was about whether the Treasury still holds the policy or not. They may need USD to be strong, but surely they don’t want it to be strong against JPY and CNY.

    USD didn’t budge against CNY, and will not budge as long as the CNY is pegged against USD. Against JPY, thanks to BoJ, the rate didn’t deteriorate too much.

    As for ‘to punish China’, well, of course not doing what the Bush Administration wanted – to loose the Yuan peg.

    My final word for this post: If you haven’t started worrying about US twin deficits, I’d advise you to start to cross your fingers now. When the twin deficits bubbles blown out, it’s surely not going to be a nice thing to see.

    #25     Nov 30, 2003
  5. #26     Nov 30, 2003
  6. #27     Dec 1, 2003
  7. Great post! Let me preface my comments with the fact that I'm not currently actively trading and hence any analysis has been done in bits and pieces.

    I was becoming very concerned that the US Dollar may not be the best currency to be holding for the foreseeable future because:

    1. Talk of the US 'selective' strong dollar policy
    2. Huge stockpiles of US dollars bought by asian central banks. They can't keep intervening (in one direction) forever.
    3. FX Markets and TA showing long term downtrends for the USD versus JPY & EUR.

    In looking for a "safe haven" I briefly thought about Gold but IMHO, Gold seems to be largely irrelevant in todays economy and it's importance attached to historical importance only.

    Then I thought about the following:
    1. The Global economy runs on oil. All of the mideast oil-producing countries peg their currency to the dollar. I also read somewhere that ALL global oil transactions are conducted in USD.
    2. The american consumer outspends any other culture, buying goods from all over the world.

    I decided that these final two points outweight the previous three. So I'm not expecting a one way permanent devaluation of the USD and I assume that it is safe to hold my cash in USD rather than any other currency.

    On a personal note, I plan to move out of the US before the end of 2004. Right now, I'm thinking Spain but that could change.

    SO is my thinking flawed here? I'd appreciate your comments, there is obviously a wealth of knowledge out there.
    #28     Dec 2, 2003
  8. m22au


    I agree that the US Dollar is toast, but I don't believe that gold is irrelevant as a store of value.

    Oil is not nearly as price elastic as gold.

    #29     Dec 2, 2003
  9. My problem with gold is purely theoretical. I realize it is recognized as a store of value but I think this is based on majority perception.

    Theoretically, if you controlled all the gold in the world what would it be worth? Nothing, no one really needs gold for any widespread commercial purpose.

    If you controlled all the worlds would control the world. People would pay your price or the whole global economy would grind to a halt.
    #30     Dec 2, 2003