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  • USD Movement

    Within a 30 hr period here the USD index has moved from 87.7 to 83.8

    Is it just the new volatility or could it be a signal of the turnaround?

    $24 billion 5 year note auction coming tomorrow I think.

    Thoughts?
    --ST (aka steveaustin2006)

  • #2
    Re: USD Movement

    Don't hold your breath hoping for the USD to crash.

    Comment


    • #3
      Re: USD Movement

      It is a violent USD retracement. The USD can soar right on up after this correction to 145 on the dollar index and still be a can full of writhing worms. You never will know whether it will go that distance or not, while you are parked in it. This is the point that traders will continually walk around gingerly, turning their gaze away from the peculiar fundamentals of their newfound enthusiasms for the USD as a safe-haven. I agree, this dollar bull market can last a long time, and any cozy sojourn with it likely will feel as comforting as taking a long nap inside a pair of steel jaws parked on a hair-trigger (booby-trap).

      Comment


      • #4
        Re: USD Movement

        I doubt that it could go that high. The pain a high USD inflicts around the globe and in the U.S. is gargantuan. Even, at $1.00 I think you would see a whole lot of central bank activity.
        --ST (aka steveaustin2006)

        Comment


        • #5
          Re: USD Movement

          Originally posted by Lukester View Post
          It is a violent USD retracement. The USD can soar right on up after this correction to 145 on the dollar index and still be a can full of writhing worms. You never will know whether it will go that distance or not, while you are parked in it. This is the point that traders will continually walk around gingerly, turning their gaze away from the peculiar fundamentals of their newfound enthusiasms for the USD as a safe-haven. I agree, this dollar bull market can last a long time, and any cozy sojourn with it likely will feel as comforting as taking a long nap inside a pair of steel jaws parked on a hair-trigger (booby-trap).
          Lukester, I am seldom sure about the meaning of what you write, so certainly you'll correct me if I am misunderstanding another of your less than clear and concise posts--though granted the one above is short.

          Are you meaning the 5% correction of the US$ Index off 87.884 which as well as I can tell was hit 10/28 is a "violent retracement" when most of the major equity indices moved 9-10% yesterday?

          Is your opinion that the US$ Index could actually go to 145? If it isn't your opinion but one of your advisors, surely you must have misread one of your advisory notes, or is it possible if that was put forth by some pundit that he could be nuts?

          Someway I got the chart below into this post--hope it stays.

          Note back in 1991, there was a bottoming of the index which looks a lot like the recent bottoming, and then a very sharp rise, followed by what turned out to be a nice reverse head and shoulders formation that took approxiately 4 years before a real up trend emerged. Then almost over seven more years a top was put in place and which from that top the drop so far was culminated earlier this year thus eating up seven more years . I realize past events are seldom exactly replicated, but a move from the lows of this year at 70.70 to anything in the 140+ range would certainly take multiple years to happen, or so it seems to me.

          Now I don't know or understand what any of this has to do with writhing worms in a can, long naps, or steel jaws, but can you elucidate what you or your advisors think in the way of economic events could lead to such a surge in the dollar index and further over what time-frame? Or is 145 a typographical error?

          Attached Files
          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.

          Comment


          • #6
            Re: USD Movement

            Via du Plessis's site.

            Financial Times: Jim Rogers - the dollar is a flawed currency
            The following is an excerpt from an online interview with Jim Rogers.

            “FT: It’s a year since we last interviewed you. You were aggressively bearish about the dollar, but you thought there would probably be a rebound and you would take that as an opportunity to further get out of the dollar. Have you made a further exit from the dollar?

            “JR: Not yet, no. And the reason I haven’t is because we’re in a period of forced liquidation of everything. We’ve only had eight or nine periods like this in the past 150 years, where everybody has to reverse their positions on everything. There is a gigantic short position in the dollar and they’re all having to cover as they reverse their positions, so this rout is going to go on much further than I would have expected, to my delight, because then I’ll get to sell at higher prices. I don’t know whether I’ll get out this month or this year even, maybe next year, but I do plan to get out of the rest of my US dollars, because this is an artificial rally caused purely by short covering.

            “FT: How will you tell when that deleveraging is finally over?

            “JR: I’m sure I won’t get it right, but I do hope that when there’s a lot of euphoria about the dollar and everybody’s saying, well, see, there’s no problem with the dollar … I hope I’m smart enough to recognise it and finally get out of the dollar, because it is a flawed and maybe, even, doomed currency.

            “FT: Do you see the sell-offs we’ve seen in commodities as a drastic correction?
            “JR: Well, we’re in a period of forced liquidation of all assets … we’re getting the business cycle effect on demand right now, certainly, but unless the world’s in perpetual economic decline, commodities are the only thing going to come out of this okay.

            “FT: Does this mean you’re actually buying back into commodities at the moment, or is this an area you’re standing clear of?

            “JR: No, no. In October when I started covering my shorts in the US stock market, I started buying Chinese shares, Taiwan shares, I started buying commodities again. No, no, I’ve added to those positions.

            “FT: What’s your strategy towards emerging market stocks?

            “JR: My hope is that I’m smart enough and brave enough at some point along the line to buy some of them back. But I’m not even thinking about it right now … The world’s financial situation is in a mess, and there are a lot of people who have to liquidate. I mean, we must have had 30,000 MBAs flying around the world looking for emerging markets. All of that money has got to come home.

            “FT: How do you think the world should go about redesigning the regulatory system, and are you worried that we’re going to end up with a swing towards over-regulation?

            “JR: Well, we probably will, The problem is that people like Alan Greenspan would never let the market work … For 15 years, under Greenspan, and now Bernanke, they would not let the market work. Had they let Long-Term Capital Management fail back in 1998, we wouldn’t have these problems now, I assure you. Lehman Brothers would have been smashed. Goldman Sachs, Bear Stearns, would have been smashed. We wouldn’t have these problems now. That only happened because every time they turned around they propped these guys up, gave them more money, and that’s why we have the problem … But now, of course, they’re going to blame it on other people and cause more regulations.

            “FT: You’re arguing we need to allow some more big institutions to fail?

            “JR: One failed. Why didn’t they let Fannie Mae and Freddie Mac? I mean, I was short Fannie Mae, and they should have let it fail, go to zero. AIG, they should have let it fail, they should have let all of these guys fail, and we would clean out the system … What they’re doing is they’re taking the assets away from the competent people, giving them to the incompetent people and saying to the incompetent: ‘Okay, now you can compete with the competent people, with their money.’ I mean this is terrible economics. This is outrageous economics.”

            Source: Jim Rogers, Financial Times, November 17, 2008.
            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.

            Comment


            • #7
              Re: USD Movement

              Originally posted by Jim Nickerson View Post
              Via du Plessis's site.

              Financial Times: Jim Rogers - the dollar is a flawed currency
              The following is an excerpt from an online interview with Jim Rogers.

              “FT: It’s a year since we last interviewed you. You were aggressively bearish about the dollar, but you thought there would probably be a rebound and you would take that as an opportunity to further get out of the dollar. Have you made a further exit from the dollar?

              “JR: Not yet, no. And the reason I haven’t is because we’re in a period of forced liquidation of everything. We’ve only had eight or nine periods like this in the past 150 years, where everybody has to reverse their positions on everything. There is a gigantic short position in the dollar and they’re all having to cover as they reverse their positions, so this rout is going to go on much further than I would have expected, to my delight, because then I’ll get to sell at higher prices. I don’t know whether I’ll get out this month or this year even, maybe next year, but I do plan to get out of the rest of my US dollars, because this is an artificial rally caused purely by short covering.

              “FT: How will you tell when that deleveraging is finally over?

              “JR: I’m sure I won’t get it right, but I do hope that when there’s a lot of euphoria about the dollar and everybody’s saying, well, see, there’s no problem with the dollar … I hope I’m smart enough to recognise it and finally get out of the dollar, because it is a flawed and maybe, even, doomed currency.

              “FT: Do you see the sell-offs we’ve seen in commodities as a drastic correction?
              “JR: Well, we’re in a period of forced liquidation of all assets … we’re getting the business cycle effect on demand right now, certainly, but unless the world’s in perpetual economic decline, commodities are the only thing going to come out of this okay.

              “FT: Does this mean you’re actually buying back into commodities at the moment, or is this an area you’re standing clear of?

              “JR: No, no. In October when I started covering my shorts in the US stock market, I started buying Chinese shares, Taiwan shares, I started buying commodities again. No, no, I’ve added to those positions.

              “FT: What’s your strategy towards emerging market stocks?

              “JR: My hope is that I’m smart enough and brave enough at some point along the line to buy some of them back. But I’m not even thinking about it right now … The world’s financial situation is in a mess, and there are a lot of people who have to liquidate. I mean, we must have had 30,000 MBAs flying around the world looking for emerging markets. All of that money has got to come home.

              “FT: How do you think the world should go about redesigning the regulatory system, and are you worried that we’re going to end up with a swing towards over-regulation?

              “JR: Well, we probably will, The problem is that people like Alan Greenspan would never let the market work … For 15 years, under Greenspan, and now Bernanke, they would not let the market work. Had they let Long-Term Capital Management fail back in 1998, we wouldn’t have these problems now, I assure you. Lehman Brothers would have been smashed. Goldman Sachs, Bear Stearns, would have been smashed. We wouldn’t have these problems now. That only happened because every time they turned around they propped these guys up, gave them more money, and that’s why we have the problem … But now, of course, they’re going to blame it on other people and cause more regulations.

              “FT: You’re arguing we need to allow some more big institutions to fail?

              “JR: One failed. Why didn’t they let Fannie Mae and Freddie Mac? I mean, I was short Fannie Mae, and they should have let it fail, go to zero. AIG, they should have let it fail, they should have let all of these guys fail, and we would clean out the system … What they’re doing is they’re taking the assets away from the competent people, giving them to the incompetent people and saying to the incompetent: ‘Okay, now you can compete with the competent people, with their money.’ I mean this is terrible economics. This is outrageous economics.”

              Source: Jim Rogers, Financial Times, November 17, 2008.
              i'd like ej to interview rogers again. sounds like they agree on the duration of deleveraging dollar rally but they have a difference on opinion on the bailouts. rogers is a dreamer... i don't trust my money to dreamers. i'm into realism and 'let it fail' ain't realistic. one lehman crash is wrecking the economy. why will 5 lehman sized crashes be better? 'the fed should not have let aig become a systemic risk' oh, ok. well, guess what... they did. that's a fact. like big boys and girls let's deal with it not pretend they didn't and respond with braindead solutions like 'let them fail'.

              Comment


              • #8
                Re: USD Movement

                Originally posted by metalman View Post
                i don't trust my money to dreamers. i'm into realism and 'let it fail' ain't realistic. one lehman crash is wrecking the economy. why will 5 lehman sized crashes be better? 'the fed should not have let aig become a systemic risk' oh, ok. well, guess what... they did. that's a fact. like big boys and girls let's deal with it not pretend they didn't and respond with braindead solutions like 'let them fail'.
                no, of course not, let's just empower those big boys and girls to keep going creating systemic risks and lining their pockets with leveraged and implicit gov guarantees - and it will all trickle down to the rest of us (just like we're seeing now).:confused:

                At least the purists, right or wrong, have a systematic and self-consistent view and internal logic and some basis for their conclusions vs just reacting to fear and being extoreted with potentialities.

                Prove to me that Lehman's collapse triggered this and I may be inclined to agree with a bailout. Perhaps more likely is the precedent Lehman's failure set - that the gov may let firms go down.

                the problem with this line of reasoning is that it does not address anything but sort of iterates the following sentiment:

                "I don't care what the cause is, or what the dangers are as a consequence of the gov taking action, but if there's any chance that the system will suffer a cataclysmic event, have the gov do whatever it needs to do; and we'll work it out later"

                MM, don't you see that this leads to the vicious cycle of:

                MAYBE too big to fail
                and MAYBE a chance of failing
                THERFORE gov must intervene

                sure seems an incentive to me to be a big as possible AND a clear indication to constrain the size/importance of the firms - BUT do you see anyone doing this, NO

                instead of bailing CITI out they should break it up and voila no more systemic risk
                WHY isn't this the route being taken?

                Hey the Fed just committed 4.7 Trillion to stabilize and system.
                That's about $45k for every household in the U.S.
                Giving it directly to the consumers is more equitable than to the bankers and investor class who will use it once again to bid up the price of everything and reak inflation on the masses

                Comment


                • #9
                  Re: USD Movement

                  Originally posted by metalman View Post
                  i'd like ej to interview rogers again. sounds like they agree on the duration of deleveraging dollar rally but they have a difference on opinion on the bailouts. rogers is a dreamer... i don't trust my money to dreamers. i'm into realism and 'let it fail' ain't realistic. one lehman crash is wrecking the economy. why will 5 lehman sized crashes be better? 'the fed should not have let aig become a systemic risk' oh, ok. well, guess what... they did. that's a fact. like big boys and girls let's deal with it not pretend they didn't and respond with braindead solutions like 'let them fail'.
                  Jim often gets emotional and overstates his position, and also usually oversimplifies it. The talking heads usually just like to get him fired up by provoking him. We will never know what he really means, unless someone asks the right questions. For example, maybe he means let them fail in a systematic way, perhaps more like the Scandinavian model. In that case, they "survived", but in a MUCH altered form, and in a way that the insiders who were milking the system were not allowed to continue their practices, and as much as possible, were punished, and as much as possible, the system was reworked to serve the citizens of those countries. I think Jim's emotion (similar to Faber's in this case) stems from the fraudulent nature of the whole system, and the need to clean it out. I believe the system needs to "fail" in a systematic way and be rebuilt to cut out the corruption and restore some level of transparency and decency. I don't really see that happening, or if it is, its insufficient and happening in slow motion.

                  A skilled interviewer like EJ might be able to tease out some interesting ideas from Jim. Would love to see it happen!


                  An EJ interview would be great!

                  Comment

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