Bazooka Ben gets called on his bluff

[detective]

Dollar rally will be puny. There are so many people around the world, central governments being the key, that are loaded to the gills in dollars they now know is not worth its weight in salt looking to exit on strength.

Bernanke tried to bluff out foreigners by continuing to print massively to see if the dumb central banks overseas would bite again and swallow up dollars but the foreigners are calling his bluff.
The US has no hand. The only course now is for the dollar to get to its fundamental real value, which is still much lower from here.

1.60 on the Euro and 140 on the Yen.
That's fair value and the market will take its time getting there.

 

[pumpanddumper]

Foreigners have the US by the balls. Would love to see rate hikes overseas.

 

[detective]

Unreal how other central banks are raising due to fears of inflation and the Fed still is harping about saving the banks and how inflation is only 2% ex energy, food, and essentials for life!

 

[orange_trad]

Quote from detective:

1.60 on the Euro and 140 on the Yen.
That's fair value and the market will take its time getting there.

140? That would be one heck of a rally for the dollar...

But obviously CBs are not out there to make money (ex Fed) they are there to maintain price stability (again, ex Fed).

 

[detective]

Quote from orange_trad:

140? That would be one heck of a rally for the dollar...

Oops, made a mistake there. I meant 90 on the dollar/yen. Obviously I meant that the dollar would go down.

I think the yen is due for a huge rally against the dollar given the differences in deficits and money printing speed.

 

[orange_trad]

Quote from detective:

Oops, made a mistake there. I meant 90 on the dollar/yen.

Don't you try to wiggle out of this Freudian slip now! Admit it: you're a dollar bull who's trying to convince everyone here to take the opposite side of your trade...

 

[Lawrence Chan]

I think I read somewhere that Bank of Canada may lower its rate as the pain of CAD shooting up is already felt across many sectors.

So Ben's bluff may workout, if it is causing enough damage around the world.

Who knows?

 

[detective]

I don't think there has been such an easy big macro trade like short dollar/long euro/yen.

It is like printing money while it goes in your favor day by day, with more people jumping on your side every day.

This short dollar trade is a bulldozer trade, you just ride it and run over anything that gets in the way.