Tag Archives: US Dollar

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Response to Kyle

[edit]  It’s a little promo-ish, but I did not solicit it and the whole back and forth is important IMO in delineating the boundaries between b/s and rationality…

Gary – I just wanted to say thank you for your very thoughtful public response to my email. I honestly don’t know of anyone else like you who would take the time to do that.

By the way, I like and appreciate your candid style of writing. I would be upset if you ever changed. Your willingness to call it like you see it is refreshing and why I became a subscriber.

You are right. There probably isn’t much on which we disagree, but certain things irk me and I feel the need to say something. I just can’t stand the emphasis placed on the dollar index, which is a completely made-up basket that essentially measures the “strength” of crappy green paper versus other colorful pieces of worthless paper. It’s silly.

That said, I do understand now what you were saying. Yes, people have been fooled into buying commodities and related equities in anticipation of a “dollar collapse.” That is true. Anyone holding coal, iron ore, copper, or oil stocks has been wiped out. And the Sinclair predictions for $50,000 gold and hyperinflation call from John Williams of Shadow Stats by such and such a date are quite lame and not credible at all.

Anyway, I hope you don’t change the way you write one bit. You are like a refuge for us in this age of non-stop BS propaganda.

As posted at NFTRH.com…

With his kind permission, I would like to publicly respond to a critique I got from subscriber, Kyle. This is not the first bone he has had to pick with me and if I am doing my job well, it won’t be the last that either he or others pick. Now, pissing off subscribers (my customers) is not something I want to do routinely, but I have a way of communicating that is just that, my way of communicating.

In that communication there are all kinds of buzz words and phrases I’ve made up, like Armageddon ’08, Inflation onDemand, Fiscal Cliff Kabuki Dance and probably 50 others over the years that just popped in my head and got popped right down into NFTRH, the websites or both. Then there is the Federal Reserve and the Outer Limits shtick and a hundred different ways to flog Fed officials (Good Cops/Bad Cops, etc.).

Those instances noted above don’t seem to upset people, but when I mention cults it starts getting dicey because so many of us identify ourselves, through ideology, to firmly held beliefs and cults well, they depend on an ideological grip on their members.  [edit] FWIW, I have my own firmly held beliefs, but I consciously try to make sure they don’t screw me up when managing the markets on an interim basis.

Continue reading Response to Kyle

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  • Gold… and a Ramble  –NFTRH [biiwii comment: he’s bitching and moaning again about the misperceptions game surrounding the monetary value relic]
  • Bracing for Stagnation  –Raghuram Rajan  [biiwii comment: errr… one of my heroes. thx for the link, Hammer]

 

USD & Euro Approach Key Date

Guest Post by Tim Knight

A fellow Sloper was kind enough to send me this post for you all……

The US $ is close to a reversal and days around Jan 22, 2015 are going to be key.  Long-Term the Euro is flawed but over the near term might be time to get bullish on the Euro and bearish on the US $

Fundamentals

The Fundamentals for a strong US Dollar and a weak Euro are many:

Continue reading USD & Euro Approach Key Date

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  • NFTRH continues to work the ‘Gappy New Year’ theme:  Gappy & Happy[biiwii comment: with all the subtlety of a sledge hammer]

 

Macro Markets; Change

Well, of course change is coming to the macro markets.  It has come every day since the beginning of time and today is different than yesterday.  But I mean a change in the market’s character is likely coming in 2015.

NFTRH notes the divergent Horsemen, Gold-Silver Ratio and USD, and also cryptically notes that people need to have the proper market interpretations at the ready in 2015.  It was just 6 months ago that we started managing a bounce in the roundly reviled USD in NFTRH.  Now look at it, everybody’s bullish the buck.

The stock market is down big today.  Oooh, that’s scary, eh?  Well no, not until it breaks some parameters.  Interestingly, some of my non-gold stocks are very green today.  I think (think, mind you) that the market is just cleaning out the pipes as sentiment got over bullish again over the holidays.  Those gaps need filling, after all.

But if and when it does go bearish for real I’ll plan to short this pig with conviction.  Right now the only thing I am short is junk bonds and that is working well.  I find it really interesting that everything is down in the face of the strong dollar but the precious metals.  That is exactly according to NFTRH’s plan on the big picture.  Exactly.  In the near or intermediate-terms, other things can and will happen.  But today is a microcosm of what I’d expect the big picture to look like under a strong dollar regime.

Meanwhile, the Gold-Silver ratio says Uncle Buck may be readying to take a break.  It’s either that or the GSR will get back in gear and croak everything.  I think the former may be in play.

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  • Fed’s policy trajectory is tied to global recovery from SoberLook.  [biiwii comment:  Agreed, in that there is little pressure implied on the Fed from global and ‘strong dollar’ perspectives.  The pressure would come (IMO) from any desire to keep up appearances considering that ZIRP appears to the average person to be stranger and stranger given the ramping economy.  Anyway, SL as usual has the grounded and sober details].

 

Will the Dollar Bull Catch You by Surprise?

Guest Post by Capitalist Exploits

A bull market in the US Dollar is underway and its magnitude and duration are likely to catch everyone by surprise. I believe it isn’t out of the question for the USD Index to advance by at least 50% within the next 5 years. If this forecast proves correct, there will be profound ramifications for the global economy and many financial markets, particularly emerging markets.

The Dollar Index has advanced by about 10% in the last 6 months, which is quite a sizeable move. However, if one takes a long-term view this isn’t a large move. What I am interested in is the USD trading sideways for the last 7 years. Usually when a market has been locked in a trading range for a long period of time a breakout to the upside signals the start of a long-term bull trend.

Note the long-term chart of the Dollar Index below – the bull markets in the early 1980s and late 1990s occurred after long periods of sideways movements. After some 7 years of “oscillating” around the 80 level it is about due for an extended period of upward movement. This isn’t hard to work out. It is the “collateral damage” of an extended bull market in the dollar that will be difficult to estimate!

Dollar Index DXY

Continue reading Will the Dollar Bull Catch You by Surprise?

Dollar Rally Does Not Demand Deflation – Duh

Guest Post by Michael Ashton

There are many funny stories out about disinflation these days. The meme has gotten amazing momentum, even more than it usually does at this time of year (see my post last month, “Seasonal Allergies“).  One of the most amusing has been the idea that the decision by the Bank of Japan to greatly increase its quantitative easing would be disinflationary in the U.S., because the yen would decline so sharply against the dollar, and dollar strength is generally assumed to be disinflationary.

The misunderstanding of the dollar effect is amazing, considering how easy it is to disprove. Sure, I understand the alarm at the dollar’s recent robust strength. Of course, such a large and rapid move must be disinflationary, right? Because who could forget the inflationary spiral of 2002-2008 in this country, when the value of the dollar fell 25%?

Continue reading Dollar Rally Does Not Demand Deflation – Duh