The Dollar.........

Discussion in 'Economics' started by RCG Trader, Jan 27, 2010.

  1. is rallying against all other majors.

    If things are so very bad, why is this happening?

    Articles, links, opinions?

    Caveat Emptor
  2. Because things aren't so very bad in terms of the utility of the dollar. One of the interesting properties of a fiat currency is that once it becomes popular, it can continue to be popular even in the face of policies that threaten to expand the currency supply.

    Fact is, I can buy more with one dollar today than I could 2 years ago. And it's stuff I (and many other people) want - real estate in the US, electronic gadgets, cars etc. So from a practical point, my desire to hold dollars is higher than it was then - I can do more with them. In order for the dollar to slip seriously against other currencies, at least one of two things has to happen:

    1) major inflation in the US
    2) goods denominated in dollars are no longer things people want

    Thus far, neither has happened.
  3. Either they've cut back on easing or things are worse than we think.

    My guess is they started to cut back (oct. they def. did) and my guess it's been on a trend down since then. They can't buy the long end forever :p
  4. The dollar started moving upward after the fed announced they were winding down their currency swaps with foreign central banks last fall.
  5. A hard spike can be seen on USD vs CAD, AUD, and CHF. Somehow I think this means something, just dont know what.
  6. correction, don't worry, it'll stop soon

  7. "If things are so very bad, why is this happening?"

    Because things are so bad = $ rally

    put another way ... $ is beneficiary#2 of the worldwide B E A R, benny#1 being Yen (perspective is quarterly/monthly view)

    question is, "is hibernation#2 (started March 9-09) over?"

    "Crossroads" AND "White Room" is where we were ... Clapton and $ coterminus bearmarket started 1968 :) :D
  8. There was a guy on CNN today that said when one countries canary starts coughing in the coal mine (they were speaking about the pound),then there is a flight to the dollar which they see as a safer canary, but what they are not realizing is that both canaries are in the same coal mine.
  9. That is what confuses me, the pound, Aussie, CAD, CHF, are all losing ground to the dollar right now. It would be an indication that the internationals think the US is the best of the worst?

    If that is indeed the case, well, it could be interesting. But there is definitely a move to safety going on, and it started quite suddenly.

    Almost as if somebody knows something
  10. Look at historic charts. The USD dollar has been pronounced dead half a dozen of times, and then it rallied. This time may be different but then again maybe this is for real. I'm long a bunch of futures reflecting a bullish USD stance with stops 5-6% away from current levels (US Dollar index, GBP, EUR, SEK).
    #10     Jan 28, 2010