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In my opinion, the market is now perfectly positioned for a massive dollar sell-off. The fundamentals for the dollar in 2010 are so much worse than they were in 2008 that it is hard to imagine a reason for people to keep buying once a modicum of political and monetary stability can be restored in Europe. In fact, the euro has recently stabilized.
My gut is that the dollar sell-off will be sharp and swift. Once the dollar decisively breaks below last year's lows, many of the traders who jumped ship in the recent rally will look to re-establish their positions. This will accelerate the dollar's descent and refocus everyone's attention back on the financial train-wreck unfolding in the United States.
Any doubts about the future of the U.S. dollar should be laid to rest by today's announcement that San Francisco Federal Reserve President Janet Yellen has been nominated to be Vice Chair of the Fed's Board of Governors, and thereby a voter on the interest rate-setting, seven-member Open Markets Committee. Ms. Yellen has earned a reputation for being one of the biggest inflation doves among the Fed's top players.
Looking for an ally to paper over the administration's gaping fiscal holes, it is not surprising that president Obama made this selection. Yellen has consistently downplayed the dangers of inflation and has made statements that indicate she views the Fed as an extension of the Labor Department, rather than a guardian of our currency. Last month, in discussing what she saw as the Fed's obligation to promote employment, she said, "If it were possible to take interest rates into negative territory, I would be voting for that." She may very well make Chairman Bernanke look like a tightwad by comparison.
It is anyone's guess which sparks will be responsible for igniting the falling dollar powder keg. From a trader's perspective, a sharp reversal in the dollar will catch many investors completely off guard. Those who stepped off the short-dollar train will be stuck on the platform as it speeds away. Those who refused to give up their seats are in for a hell of a ride.
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Germany Considers Central Bank Gold Reserves for EMF-Paper
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I disagree in the short term - the next few years - the dollar is the reserve currency so there will be a demand for dollars to pay down debts owed which will raise it compared to currencies like the Euro especially if Greece or Spain etc start defaulting...
ReplyDelete12:13,
ReplyDeleteHere's something you probably haven't thought about. In fact, most people haven't as well.
There is growing indication that France and Germany no longer want to play ball with the London NWO players.
France, Germany, Belgium and Greece are now calling for cancellation of credit default swap derivatives (CDSs), i.e. the instrument Anglo-Saxon nations are using to pull down the economy of the world. If this movement takes a foot hole, and I believe it will, Central Europe will succeed in stabilising the Eurozone while Britain and America go down in flames.
Fact is, it's all about Jews.
The Jewish money men no longer want to kowtow to Anglo-Saxon interests. They want world power all to themselves. By shifting focus to Central Europe, they can do just that. I mean, the French President isn't even French in the real sense. He's Jewish!
Connect the dots. The European Central Bank is in Frankfurt Germany. The European Parliament, France. Together, French and German exports exceed $1.6 trillion whereas American and Chinese $965 billion and $1.2 trillion respectively.
The Anglo-Saxon nations are going down. Central Europe is rising.
The USD and Pound are going to get trashed, and it won't take 2 years at this rate. The French and Germans will make sure of that.
Also, you do well to remember that the French President is actively trying to strengthen his country's industrial base (contrary to London's wishes) and is now promoting nuclear power around the world big time. In other words, France is not going to roll over and die.
I still can't beleive that articles likes this are still popping up.....The US dollar is still the world reserve currency, it is still used in international trade and any attempt to change the world reserve currency will take at least 10 years to achieve provided we start now. There has been threats by China, Russia and other countries to replace the US dollar, but, theses were just threats and nothing more and as mentioned before if they start now it will take them at least 10 years.
ReplyDeleteThere is no indication that China or any other country are buying gold in Mass quantity to replace their US dollar reserve as gold price has stabilized and showing sign its going to fall.
The other reason why there will not be any sell-off of the US dollar is that everyone around the world still see it as a safe heaven in times of crisis. The problems in Greece if not solved will only cause the US dollar to rally further.
528 is a disinfo agent, but a stupid one. He does not understand that the Us is broke, states cannot even pay tax refunds, they are holding them back, I have never seen this in my life, so by that alone you know we are fcked
ReplyDelete5:34 and 5:56 are you the same dickheads that predicted Martial law in 2009 and the introduction of AMERO as a new currency in the same year.....you sure look like stupid idiots now....
ReplyDeleteAs far as the US is broke argument, in case you missed it, Calif had a huge increase in revenue from Taxes and refunds will be paid on time and the same thing happening in other states. The concept of USA broke is stupid in itself as if we have problems paying debt, as a last resort we can monetize debt.
6:06 come on you're not that dense are you? February deficit totaled $220.9-billion (U.S.), 14 per cent higher than the previous record set in February of last year. Multiply this amount times 12.. Thats considered BROKE you dumb hillbilly..
ReplyDelete6:22 isn't it bed time for you already??? or go and play with your toys and leave this blog for people who can have a constructive argument to better understand what is really happening in the Economy.
ReplyDeleteWhat happens when you 'monetize' debt?
ReplyDeleteIt's simple really.
You devalue the remainder of the currency as you print up free money.
Nothing comes for free, my amigos.
You will pay.
You pay now.
7:07 and 7:14 I did mention that its a last resort measure..can't you read and the whole idea is to prove that the US cannot be broke.
ReplyDeleteSimple economic models cannot be applied the US dollar as it is a unique currency, It is the world reserve currency and the currency used in international trade and perceived to be a safe heaven.Therefore, this means that conventional economic theories does not apply.
the US cannot be broke..what an invalid statement. If one takes in 1 trillion and spends 2 trillion, thats not broke its called..?________
ReplyDeleteUnique currency,...so was the dot com bubble it was unique alright..WOW, where do these people come from?
7:45 A five year old can answer that:
ReplyDeleteIf one takes in 1 trillion and spends 2 trillion,...the difference $1 trillion you PRINT.
The UK has been doing so far without igniting the Hyperinflation bomb, however, they are limited on how much they can monetize because the British Pound is not the world reserve currency, its not used extensively in international trade and is not perceived to be a safe heaven like the US Dollar.
7:57 are you in grade school? The trillion goes into the books as DEBT, you know the type that has to be paid off, with the rest of the 100 some odd trillion. What you think everything lasts FOREVER? Like the dollar will be the world currency FOREVER? The Roman empire cllapsed just like the USA..Are you the sheep in charge?
ReplyDelete8:10 if you ever went to school you would have known that the book will show the liability but at the same time an ASSET which cancels out the Liability (Debt).....Nothing last forever and if you are hoping for the US empire to collapse then it will certainly not happen in your lifetime or that of the next 50 generations.
ReplyDelete843 the world is not going to end, but a slow gradual collapse is happening right now, and jobs are gone for good, the real unemployment rate is 22% now in a couple of years it will be 40% and the collapse just rolls along. You are dumb as dirt and a jesus fcker for sure.
ReplyDeleteWow what an amazing collection of MENSA members we have at this roundtable of economic discussion...Lets agree to disagree...In the end one of us will get to crow loudly and the other will get to sit quietly and mumble how they already knew it.
ReplyDeleteAll I know is that Cali is looking REAL BAD...I live there...I see it...I talk to people who ar emovers and shakers and even the lil cogs in the giant wheel...Cali maynot default but Cali will not make it in 2 years when it's 30 year bonds have to be retired or kept rolling for another 30 years...Fact...AND if we go ALL the rest of the US goes with us...FACT.
Take that snotty southern and midwest states who take more in taxes than pay in...Try to pretend you're all self-reliant but you live off the money made in Cali...Either way it's going to be fun on the way down.
sleep tight, while the smart are up and always thinking of ways to photocopy ass and body parts
ReplyDelete