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Too late to be a dollar bear?

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  • Too late to be a dollar bear?

    It occurs to me that a lot of people were very right about the dollar, but much like a selloff occurs when that company posts an earnings surprise, I think there might be a bounce in the dollar as everyone comes to realise that everything the bears said was true.

    Sounds kinda contrarian, no?

    My reason is thus: the smart money long ago predicted what was going to happened and exited the dollar (into gold, commodities, whatever). They knew that inflation was happening, even if it wasn't showing up in the official numbers.

    But now it might just start showing up clear as day, forcing the hand of the Fed and central banks. The hog has always been getting stuck in tunnel, yes, but now that we know it .. we're actually going to have to start doing it.

    So, of course, the fools start to do late what the wise folks did early - sell the dollar.

    However, the smart money now knows that the fed will start hiking, perhaps aggressively, to fend off inflation, because the incoming numbers will force their hand.

    Bush is a lame duck president, right now Heliben doesn't have to care what he thinks .. he only has to care what Hillary or Mccain (or warner, but there is currently a 78% chance either HIllary/McCain will be the next president) will think, so he needs to set up the economy for them to be positioned for re-ellection in 2012.

    That's right folks, heliben's magic # is 2012 (also, 2010 when I think he's up for re-appointing?).

    If he can make a convincing case just before 2010 that by the time 2012 rolls around the economy will have fully recovered and in boom times, then he will be likely re-appointed. Of course, he should maintain some degree of credibilty by 2010 as well in order to properly make his case.

    What does this mean? I believe it means that if there will be pain before 2012, best to feel that pain now - which means rate hikes.


  • #2
    I just posted a comment in "'Poom' happening?" in which Bill Gross projects 1-3% inflation in the next few years as I understood.

    I believe the selloffs in most markets, equity and commodity, in the last 10 days is not over based on the things at which I look to attempt to identify bottoms. Granted markets were rather oversold on Thursday and bounced and may bounce some more, but for a retreat that seems significant so far, it doesn't look close to bottoming.

    If you look at the poll # 15, at the moment it shows 59%. That I would call bearish, which is rather strong bearish sentiment (It would be nice on polls if one could determine the number of voters, so as give greater insight of real essence, perhaps all viewers do not vote. I viewed the results a couple of times before I decided how to vote--Rise). The contrarian play is of course bullish for the moment.

    I still think markets will go down, but they may retest highs before doing so thus burning the bears, and setting up more for a real decline. If the markets go down considerably, the Fed is not going to be raising interest rates much from here.

    Jim
    Jim 69 y/o

    "...Texans...the lowest form of white man there is." Robert Duvall, as Al Sieber, in "Geronimo." (see "Location" for examples.)

    Dedicated to the idea that all people deserve a chance for a healthy productive life. B&M Gates Fdn.

    Good judgement comes from experience; experience comes from bad judgement. Unknown.

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    • #3
      Well, gold is dropping - hard on hints of another rate rise.

      ECB is getting rather hawkish as well.

      Basically, I think inflation is bearing it's ugly head and the feds are finally doing something about it.

      Not only is this going to slow down economic demand and growth, it is also going to bring new credibility to the fiat currencies. Plus Iran is settling down a bit.

      Glad I didn't get sucked into gold, though, my luck this is a buying opportunity.

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