Dollar breaking down

[scriabinop23]

Quote from fearless9:

So why the flight to zero Treasuries

regards
f9

Because fund managers who have cash holdings are mandated to keep short term equivalents with either banks or the federal govt. Buying gold or other currencies is perceived as risky and unacceptable - it is just out of mandate. And there is no trust in banks. So that leaves the federal govt.

status quo.

 

[TheCaymanIsland]

Quote from scriabinop23:

Because fund managers who have cash holdings are mandated to keep short term equivalents with either banks or the federal govt. Buying gold or other currencies is perceived as risky and unacceptable - it is just out of mandate. And there is no trust in banks. So that leaves the federal govt.

status quo.

When will this end?

 

[short&naked]

Quote from scriabinop23:

Something is happening. The superificial flight to 'quality' may be ending.

Why would you want to own a currency where people have so little trust in its banking system you will only deposit your money with the government?

Look at gold, euro, aussie, everything. Forget carry trades... This looks like a dumping, a breakout and maybe the start of a very real trend.

Or a retracement of the NEW trend.

 

[kxvid]

When I woke up this morning and saw the euro I was like holy crap. I was thinking about shorting for a second but realized that would be suicide considering how hard fx trends.

 

[TheCaymanIsland]

Quote from EMRGLOBAL:

There is ZERO reason for a "Strong USD". Deflation is the only way that the US economy will work throught this perfect storm.
Deflation across the bord, from Energy to goods, to the USD.

Problem is, "INFLATION" to follow is going to make the Carter Years look attractive.

Nevertheless, Manufactures are not able to compete with the low labor cost that the Asian Tigers and India have. The lower cost of producing in Emerging Markets is making Manufacturing in the US, less attractive.

In order for the West to compete with the 3rd world countries, is to deflate, period.

IMHO, we will have a few years of Deflation to be followed by serious Inflation. Those who are smart enough to make money in these times will make a killing....those who are not, will fall.

So are you getting long gold futures??

 

[Ivanovich]

Quote from short&naked:

Or a retracement of the NEW trend.

From a low of about 1.23-4ish to 1.32 is one hell of a retracement.

edit - now 1.33

 

[dhpar]

Quote from EMRGLOBAL:

There is ZERO reason for a "Strong USD". Deflation is the only way that the US economy will work throught this perfect storm.
Deflation across the bord, from Energy to goods, to the USD.

Problem is, "INFLATION" to follow is going to make the Carter Years look attractive.

Nevertheless, Manufactures are not able to compete with the low labor cost that the Asian Tigers and India have. The lower cost of producing in Emerging Markets is making Manufacturing in the US, less attractive.

In order for the West to compete with the 3rd world countries, is to deflate, period.

IMHO, we will have a few years of Deflation to be followed by serious Inflation. Those who are smart enough to make money in these times will make a killing....those who are not, will fall.

not sure i follow your economic reasoning here.

in fact the only long term way out of this mess is mix of:

1. inflation (i.e. taking down consumers' spending power, reducing debt in real terms, bringing house prices in line with inflation adjusted long term trends),
2. more unemployment (i.e. lower labor bargaining power and therefore labor costs) and
3. devaluation (to equate labor costs and fix external deficit).
4. raise taxes (to pay for the public debt)

sad list....

 

[dhpar]

EUR was acting bullish for the past 2 weeks - only blind people did not see it.
the strong USD was bullshit to start with - just a repatriation effect and loss taking on USD assets exacerbated by an expensive short term funding (it was discussed in length here on ET).
coupled with record lows for specialists' shorts in equities (and record highs for public) the writing was on the wall...

i am more surprised that JPY is acting strongly - looks like carry trade has reversed due to aggressive fed cutting campaign. this may spell more trouble for US as it basically means outflow of foreigner capital....hohoho

 

[Debaser82]

But but but..

On CNBC they said Euro and $ were going to reach parity?

 

[JamesVU2000]

Seems like people are desperate for the dollar to sell off