the strong usd

[Mega]

Re: the strong usd

"If there is something the Chinese are good at, it is central planning. I suspect every little detail of that logistics is carefully taken care of"


Ah Yes CCP Central planning !
https://www.thevintagenews.com/2016/...sters-history/

[jk]

Re: the strong usd

"If there is something the Chinese are good at, it is central planning. I suspect every little detail of that logistics is carefully taken care of"


Ah Yes CCP Central planning !
https://www.thevintagenews.com/2016/...sters-history/

that sparrow story is simultaneously hilarious and horrifying.

so they're good at planning, and at carrying out the plan, but not necessarily good at choosing what to plan.

they will spend a LOT of money, buy a LOT resources, put a LOT of people to work, and use these resources for SOMETHING. to what extent those somethings will ultimately be useful or productive remains a question. in the meantime i'm investing in energy, copper, etc.

[shiny!]

Re: the strong usd

in the meantime i'm investing in energy, copper, etc.

May I ask what vehicles do you use to invest in commodities? ETFs? Futures? ...?

[jk]

Re: the strong usd

May I ask what vehicles do you use to invest in commodities? ETFs? Futures? ...?

etf's mostly.
bcx
bgr
comt
copx
ixc
and some others i can't recall off the top of my head

[shiny!]

Re: the strong usd

Thanks, jk!

[GRG55]

Re: the strong usd

i will take the liberty of reposting here something i posted in the 1,2,3,4....inflation! thread, as it dovetails nicely with grg's post above:

highly recommend this short article:

https://themacrotourist.substack.com/p/moas-is-coming

re the title of THIS thread, the strong usd, i think we'd better clearly distinguish the value of the dollar vs other currencies, like the euro and the value of the dollar vs "stuff." the line below made me think of finster:

Although I understand how a deterioration of the situation should be deflationary, that's assuming the unit we use to measure everything stays the same. It won't.

"...Although I understand how a deterioration of the situation should be deflationary, that's assuming the unit we use to measure everything stays the same. It won't.

Now, you might say we need to first get that deflationary panic before the response comes. Could be. But that's the bet you are taking. You are assuming we get deflation before inflation. Not only that, I would argue many are positioned for that outcome.

Few are looking two steps ahead and asking themselves what's the bigger risk; commodities falling 25% as the virus spreads or governments panic and send them up 50%. Given we have already tumbled 10%+ in economically sensitive commodities such as copper and oil, I believe risk reward favours betting on the latter..."

A 10% decline in oil or copper is barely a blip. Commodities fall like an elevator with no brakes. The typical decline is a minimum of 30%. I think we have an excellent chance for another waterfall washout (oil sub-$35?). I agree the unit we use to measure everything is important.

But the hunt for US Dollars appears to be continuing. Which is the main reason oil, nat gas & copper can't break out to the upside. The coronavirus is just a side show to the secular trend. If the Chinese and the Europeans stimulate, isn't the main effect going to be to create more liquidity to drive the demand for more US$ as everyone else tries to get out of their sinking currencies?

I'm not so sure this Ka phase, and its attendant strong US$ is quite near its end yet.

But then the US$ would appear to be in a terrible inflationary depreciation when assessing it against "stuff" like TSLA, AAPL, GOOG, etc.

When the above post was made on February 9:

Brent was trading just above $53 per barrel;
TSLA was trading about $770 a share;
AAPL was trading about $320 a share;
GOOG was trading about $1500 a share.


Five weeks later, here we are...Brent is currently at $30.26.

The hunt for US Dollars continues. Relentlessly.
I am increasingly expecting a blow-off top in the USDX before this Ka phase can be declared over and done.
That would be a catastrophe for EM, among other things.

[Mega]

Re: the strong usd

I hope the insane mess we are in will see Tesla face the real world

[GRG55]

Re: the strong usd

...The hunt for US Dollars continues. Relentlessly.
I am increasingly expecting a blow-off top in the USDX before this Ka phase can be declared over and done.
That would be a catastrophe for EM, among other things.

DXY at ~101.

The Canadian Dollar(ette) fell 2.4% against the USD today. Rapidly approaching repeat "Northern Peso" exchange rate from the 1990s.

[shiny!]

Re: the strong usd

DXY at ~101.

The Canadian Dollar(ette) fell 2.4% against the USD today. Rapidly approaching repeat "Northern Peso" exchange rate from the 1990s.

Holy cr*p, Batman! This is just crazy.

[santafe2]

Re: the strong usd

that sparrow story is simultaneously hilarious and horrifying.

so they're good at planning, and at carrying out the plan, but not necessarily good at choosing what to plan.

they will spend a LOT of money, buy a LOT resources, put a LOT of people to work, and use these resources for SOMETHING. to what extent those somethings will ultimately be useful or productive remains a question. in the meantime i'm investing in energy, copper, etc.

Really? Sparrows are an issue? The Chinese system is an issue? This is supposed to be a thoughtful site and we can't talk about global warming because a few dumb posters don't think it's real. How are we not now becoming sparrow killing problem solvers? This has been going on for a few decades. Look at our response to COVID-19 infections and try to support how we are not one of the worst run, sparrow killing, governments in the world. Don't get confused and support our democratic system, (wave flags now), with our current idiots in charge. Our response to COVID-19 is simultaneously hilarious and horrifiying.

[Chris Coles]

Re: the strong usd

Our response to COVID-19 is simultaneously hilarious and horrifiying.

And then another "what if" this COVID-19 all turns out to be another over hyped medical crisis, that, in the cold light of day, turns out to be completely unnecessary?

[FrankL]

Re: the strong usd

And then another "what if" this COVID-19 all turns out to be another over hyped medical crisis, that, in the cold light of day, turns out to be completely unnecessary?

So how do you explain the situation in northern Italy?

This epidemic can be easily explained: our healthcare systems (public or private) are not made to deal with epidemics that generate a very large amount of patients needing intensive care for ~3 weeks straight, saturating all ICU capacity early on in the epidemic.

At that point the quality of your healthcare system matters little, as your ability to treat new cases needing intensive care is determined by the rate of patient discharge from ICU.

So the most effective thing you can do to prevent saturation is to limit the infection rate, by restricting people's movements.

[Chris Coles]

Re: the strong usd

So how do you explain the situation in northern Italy?

This epidemic can be easily explained: our healthcare systems (public or private) are not made to deal with epidemics that generate a very large amount of patients needing intensive care for ~3 weeks straight, saturating all ICU capacity early on in the epidemic.

At that point the quality of your healthcare system matters little, as your ability to treat new cases needing intensive care is determined by the rate of patient discharge from ICU.

So the most effective thing you can do to prevent saturation is to limit the infection rate, by restricting people's movements.

My comment stems from a quite different viewpoint; I do not disregard yours; which is perfectly valid. Suddenly we are being faced with reports of death; yet death is a regular part of humanity and never before have we been faced with so much reporting of death. No one disputes that a regular flu season brings tens of thousands of deaths; yet today we are being placed under draconian control due to a few hundred deaths. My viewpoint takes us back to a recent flu season where governments were, (it is now agreed), foxed into purchasing vast quantities of a drug that in truth, was not going to do anything other than make a great deal of profit for the people that had prompted governments to buy the unnecessary packets of pills.

It seems to me no one has given any real thought as to the longer term effects of shutting down everything. That, if the health industry had been following the teachings of the likes of Dr. Joseph Mercola, www.mercola.com the vast majority of the populations of the world would be healthy enough to easily survive the threat; that the underlying tragedy is that we are now under the complete control of an industry that vastly profits from unhealthy patients.

In the cold light of day, in a couple of years from now; will we all be saying, whatever was all the hype about?

[Southernguy]

Re: the strong usd

The mortality rate of COVID 19 without adequate health care for serioulsy ill patients is no less than 5% (reportedly 3-4% when such people can go to an ICU). Let it spread freely and no less than 50% would be infected. For a country the size of USA (300 plus millions) it's no less than 7.5 million dead. For the whole world would be 100 million dead. I think these numbers erre on the conservative side.
Should we take them?
That said economy would be much less affected.
The above numbers don't take into account how many would die because healthcare systems would be more severely overwhelmed than they are today. People with other patologies would not be treated.

My comment stems from a quite different viewpoint; I do not disregard yours; which is perfectly valid. Suddenly we are being faced with reports of death; yet death is a regular part of humanity and never before have we been faced with so much reporting of death. No one disputes that a regular flu season brings tens of thousands of deaths; yet today we are being placed under draconian control due to a few hundred deaths. My viewpoint takes us back to a recent flu season where governments were, (it is now agreed), foxed into purchasing vast quantities of a drug that in truth, was not going to do anything other than make a great deal of profit for the people that had prompted governments to buy the unnecessary packets of pills.

It seems to me no one has given any real thought as to the longer term effects of shutting down everything. That, if the health industry had been following the teachings of the likes of Dr. Joseph Mercola, www.mercola.com the vast majority of the populations of the world would be healthy enough to easily survive the threat; that the underlying tragedy is that we are now under the complete control of an industry that vastly profits from unhealthy patients.

In the cold light of day, in a couple of years from now; will we all be saying, whatever was all the hype about?

[Chris Coles]

Re: the strong usd

The mortality rate of COVID 19 without adequate health care for serioulsy ill patients is no less than 5% (reportedly 3-4% when such people can go to an ICU). Let it spread freely and no less than 50% would be infected. For a country the size of USA (300 plus millions) it's no less than 7.5 million dead. For the whole world would be 100 million dead. I think these numbers erre on the conservative side.
Should we take them?
That said economy would be much less affected.
The above numbers don't take into account how many would die because healthcare systems would be more severely overwhelmed than they are today. People with other patologies would not be treated.

I agree, as things stand, we are on opposite sides of this debate. If we both survive, then, in a couple of years, we can again return to the actual returns and resolve the debate with facts, that is life.