Can someone please explain (or try to) the dollars strength since July and it's even greater strength last few days in spite of evidence of more Printing in the offing.. trying to learn and handle commodities better... Thanks..
And the answer was what? I've been wondering this myself. Printing money weakens currencies so it seems counter-intuitive.
Flight to tbills, euro banks more highly leveraged than us ones, euro banks getting taken over, deleveraging of carry trades. Longer term it could weaken.
Also, people not spending as much and hoarding their dollars helps a currency to not inflate as fast. If you look up the German hyperinflation after WWI, even though there was a ton of money printed, the hyperinflation didn't really start until people stopped saving so much (people had been saving during the war) and rations had been lifted. Not sure the American consumer really has that problem of saving too much though LOL, but they might be saving a lot more proportionately than they had before right now.
Also could be Japanese and Euro economies seen weakening as much or more than US economy... Central Bank intervention also.. Quite a few flies in the soup so better to not over anticipate or think too hard..! Just act accordingly. That said, such a crazy run up to 82 to 83 area unlikely to be sustained... i.e. small swing long commodity trades possible..
Very useful info.... So basically this hyper inflation everyone is expecting won't happen until those panicking now and not spending finally have to spend the little they have if the economy REALLY weakens...
US interest rates are also already very low.ECB and MPC will be cutting their rates soon thus weakening their currencies. The euro is turning into a bit of a fiasco,European banks are in bad trouble,the UK is facing some very serious problems too. Let's face it,is the US dollar the best of a bad bunch? The market is indicating so.
Now I'm not panic-mongering here, but I did read Prechter's "Conquer the Crash" where he's anticipating a deflationary depression, rather than a hyperinflationary one. Greenspan's worried about a global inflation problem (I read his book too). Pick your poison.
Hmmm, that seems very "realistic" and in line with the general perception over in Europe and elsewhere around the world. NOT