Death of the Dollar??? Not so fast......

Discussion in 'Economy' started by Zander, Oct 25, 2009.

  1. Zander
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    Zander Platinum Member

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    Is the US DOLLAR doomed?? This chart shows the dollar over the last 18 months or so. Every headline I read these days is about "the demise of the greenback". Bearish sentiment is EXTREME at only 4% bulls. This reminds me of the situation we had in Spring of 2008. The U.S. dollar stood at an all-time record low against the euro after plunging more than 40% in value. And, according to the usual experts, the greenback was "dead"-set to meet its maker. Of course, the dollar then started a huge rally!! In my experience, the herd is ALWAYS wrong. Therefore I am betting on the greenback.
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    Last edited: Oct 25, 2009
  2. Neubarth
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    Neubarth At the Ballpark July 30th

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    At the least, the dollar should go up about five percent from this point.
     
  3. Paulie
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    Paulie Platinum Member

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    I agree with the sentiment of going against the mainstream opinion, ESPECIALLY anything that's been harped upon on TV repeatedly.

    But that chart you posted shows a BEARISH tecnhical signal, no?

    The peaks and bottoms progressively got higher leading to the highest point, and now the peaks and bottoms are progressively going lower, but haven't yet tested the lowest point. I don't know the volumes and moving averages so I can't get too technical, plus I'm not that good at technicals anyway.

    But couple this with the Fed saying rates aren't going ANYWHERE for at least 6 more months, and you have a bearish signal until AT LEAST november, when investors know that a lot of the Fed's facilities expire December 31.
     
  4. Paulie
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    Paulie Platinum Member

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    We haven't even BEGUN to test the '08 lows from THAT inflation, yet.

    And we still have Fed programs in effect for another couple months, with some that have just been expanded until the end of March.

    We test the lows before we go higher, if we even DO go higher.

    But I don't doubt Neubarth on a quick 5% gain flip based on that chart. I wouldn't HOLD that position though.
     
    Last edited: Oct 25, 2009
  5. Zander
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    Zander Platinum Member

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    Not really. The chart is extremely bullish and shows that the Dollar has completed a perfect 5 waves down.

    Fundamentally we have every reason to expect a dollar boom. Credit liquidity is very important to the financial markets. When credit loosens stocks and commodites rally. This is exactly what has happened since March. When credit contracts again, demand for dollars will go up and financial markets will head south as people and institutions sell their assets to get dollars. It will be a replay of 2008, only stronger.

    Another extremely bullish sign for the dollar is the demand for treasuries. Treasury markets are attracting record demand! The data clearly shows that foreign central banks have not abandoned the US Treasury - foreign net purchases of Treasuries hit an all-time high at $100.53 B in June 2009, with China and Japan leading the way.

    Factor in the collapse of the consumer credit market and you have all the makings of a dollar rally.
     
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  6. The Rabbi
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    The Rabbi Diamond Member

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    Usually something that "everyone knows for a fact" turns out to be dead wrong, leaving a lot of very disappointed investors.
    The proof will be when Businessweek puts "Death of the Dollar" on its front cover. That's the signal of a bottom in any market.

    The Chinese and Arabs hold trillions of dollars of assets. They will not shit their nest just to make a point.
     
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  7. Paulie
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    Paulie Platinum Member

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    You may have a point with the treasury demand. But Rabbi here already previously stated his position on bonds in another thread, so I wouldn't be so quick to thank his threads. If businessweek puts "The dollar is dead", then it's already too late to be debating these issues in the first place.

    But treasury attraction is also something that could be atributed to almost a literal gun to head of foreign governments to buy up our debt, which is nothing more than artificial inflation of treasury prices.

    The fact is, no one knows anything for sure. But I'd put my money on the Fed's moves over the past year, particularly bank reserves amounts, and the fact that they've NEVER gotten the exit strategy right in history.

    A quick rising dollar short term trade, followed by a short term pullback trade, followed THEN by a longer term bullish dollar position as the Fed's facilities expire in december, and the rest in March.

    Play a bullish dollar for a longer term sometime in November, but watch for incresed demand first. Let the big boys dictate where you put your money. They know things that we peons are always the last to know...

    But ALWAYS follow the Fed's moves. They tell a story better than your favorite author.
     
  8. The Rabbi
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    The Rabbi Diamond Member

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    Music, sweet music.....
     
  9. Paulie
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    Paulie Platinum Member

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    If only Rabbi knew how extremely stupid he's looked lately.

    What a fucking pussy :lol:
     
  10. Rothbardian
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    Rothbardian Rookie

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    Well, just wait till the trillions the Fed is printing start weaving its way through the system. With no end in sight, it is become more inevitable every day.
     

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