The 'Dollar Is Going to Crash' Crowd Are Oblivious...

[kiwi_trader]

Quote from clacy:

I agree with much of what you're saying, except if that vision comes to fruition, Obama won't likely get a 2nd term.

That might depend on two things:
- who is up against him; and
- how well he can blame George

In Aus the current socialist (pretended to be a fiscal conservative when getting elected) PM is still aiming to blame most of it on them that went before.

I think this thread might well be right though - the fragility of the Euro(zone) is underestimated.

 

[asiaprop]

its not the wage inflation that worries me, no dont expect that. BUT I expect consumer prices to edge up soon. Think about it, commodities are gonna stay in demand at least consumption goods. What if exactly this happens, consumer prices going up, wage inflation staying down. This could really stab the US consumer badly in the back...

Quote from ByLoSellHi:

You're one step ahead of me if successful; You're a trader.

I have the luxury of time. Traders do not.

I am extremely bearish on the economy but bullish on the USD.

Americans are not spending money. Europe is as deeply infected if not more so than the U.S. The stimulus money being printed and borrowed is not going to consumers, to spend in stores and shoppes and restaurants, but to units of government, so they can scale back the layoffs and pay for teachers and maintenance.

Does anyone here actually think we'll see wage inflation in the U.S. any time soon?

If not, the question is at least 50% settled.

 

[asiaprop]

sorry but what planet are you talking about? UK? The UK is dead they sold out all their productive industries and bet the WHOLE FARM on finance. Financials are not gonna thrive for the next couple years. Also, the UK budget is a barrel without bottom. What do you expect will happen to the UK and the GBP? Right, it will cease to exist and they will join the Euro. Mark my words, you still hear the brits bitching about the Europ but sooner or later its gonna be their safe haven.

Quote from ByLoSellHi:

USD = Best in Show over the next decade.

The U.S. still does and for a long time will be the consumption train pulling the global economy.

The only other country that comes close on a PER CAPITA BASIS is the U.K., but it's one fifth the size of the U.S., and incomes are 74% as much.

 

[ByLoSellHi]

Quote from asiaprop:

its not the wage inflation that worries me, no dont expect that. BUT I expect consumer prices to edge up soon. Think about it, commodities are gonna stay in demand at least consumption goods. What if exactly this happens, consumer prices going up, wage inflation staying down. This could really stab the US consumer badly in the back...

First, stagflation without wage inflation is stagflation-light, big time.

In the 70's, wage inflation, largely induced by unions, crushed businesses and consumers alike.

Second, I just don't buy the bull case on commodities, despite the run-up they've had over the last several months (as has everything, just about).

The 2007 replay of high oil and commodity prices won't and can't happen in an era of massive business and consumer deleveraging. Think about it - fewer flights, car sales, people working, lower wages - c'mon.

Everyone from businesses to consumers to billionaires are cutting back.

 

[asiaprop]

a) which unions are you talking about? Unions are a socialist cripple of the past. There are no more unions and there is not the slightest hint that workers will be able to push through with any wage increases in the forseeable futue.

b) When I mentioned consumption goods I was talking about food-related commodities. I also do not believe that we will see oil rallying to the tune of what we have seen until 2008 anytime soon. But I believe overall cost of living will edge up and wages will not be able to keep pace squeezing consumers further. How do consumers want to save anytime soon? Most consumers are long time not done paying off their credit cards, auto loans, and the like before they can remotely start thinking about saving money.

My bet is that we will first see consumers squeezed further before anyone can claim US consumers start saving and investing more responsibly.

Quote from ByLoSellHi:

First, stagflation without wage inflation is stagflation-light, big time.

In the 70's, wage inflation, largely induced by unions, crushed businesses and consumers alike.

Second, I just don't buy the bull case on commodities, despite the run-up they've had over the last several months (as has everything, just about).

The 2007 replay of high oil and commodity prices won't and can't happen in an era of massive business and consumer deleveraging. Think about it - fewer flights, car sales, people working, lower wages - c'mon.

Everyone from businesses to consumers to billionaires are cutting back.

 

[fhl]

The US has massively overborrowed and is at the same time moving assets into unproductive hands and will be shortly raising tax rates on the few productive citizens who are left. In short, this admin is destroying our country. If you don't think so, please explain how the money will be paid back or even serviced on a timely basis with these policies in place. It's a near impossibility.

The dollar, however, is also dependent on what other countries do. Maybe they will mismanage themselves equally as bad.

 

[makloda]

I forgot who used the phrase (some analyst) but I like the analogy of "for the time being, the US Dollar is the tallest in a group of midgets".

 

[sosueme]

70% of dollars lie outside US so don't think the US consumer is the driver.

If foreigner dollar holders sell then the dollar drops.
If US gov. raises interest rates to cover their massive borrowings then dollar goes up.

sosueme

 

[Broken_Trades]

Quote from asiaprop:

What if exactly this happens, consumer prices going up, wage inflation staying down. This could really stab the US consumer badly in the back...

I think that's called 'Stab-Flation'


Inflation only happens when real money goes out into the economy.

None of the money the Fed is printing is going into the economy. It's all going into the sewer to repay all of the losses from the banks. The banks can't create more money or credit because there is no demand. So no new money is actually going into the economy.

In the meanwhile the actual effective money supply is still contracting as credit is reduced. Consumers and businesses start hoarding money because their cashflow is down.

Money becomes more valuable as it is in higher demand. Assets are now liabilities because they are over supplied further reducing asset backed credit to consumers and business.

The contraction of the credit supply and debt vaccum > than the increase in money supply from the Fed and new lending from banks.

I think sometime this year people are going to remember that Oil isn't gold and it'll fall back to the 30s... Probably around when the stock market crashes and the dollar goes on another tear. Perhaps we will see Gold rise with the dollar...

 

[austrijec]

I dont think US property prices were as high as elsewhere at the top. Really surprises attention to US prop prices. Go and have a look in about any bubbly spot in the world and see prices matching new york, say in a village where princess Diana stopped for a coffee. All this property stuff is overrated. If not then what is going to happen to large part of the world that had much more heat in prices?

Propaganda for people switching from US bonds may be just another green shot in making as money may flow in equities ? Making people feel rich again and ready to spend and forget about this nighmare ?!?

why not ? everyone was surprised by the rally which was well planned. It just may be continuation of global intervention to prevent large changes that everybody scared of.