Is it just me, or does it seem like everything the readers of HP predicted would happen is now happening right in front of our eyes?
The continuing sell-off came amid a series of events that should, in theory, have aided the greenback. The Federal Reserve released a broadly hawkish monetary policy statement, Thursday's US trade data was far better than feared, and the US Treasury declined to formally cite China for currency manipulation, a ruling that would have been expected to drive further Asian gains against the dollar.
Yet sentiment has turned so decisively against the greenback that it still fell, sliding a further 1.1 per cent to $1.2879 to the euro, 2.1 per cent to $1.8897 against sterling and 1.9 per cent to SFr1.2022 against the Swiss franc, hitting new one-year lows against each, and 1.3 per cent to Y110.50 against the yen. The dollar has now lost 6-8 per cent against each of these currencies since the start of April.
"The structural imbalances in US international trade flows remain significant and we believe forex market participants will become more concerned over the burgeoning US current account deficit and that this will contribute to a weakening dollar," said Mitul Kotecha, head of global FX research at Calyon.
May 12, 2006
Another week, another set of losses for the dramatically diminishing dollar
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17 comments:
nah, i screwed up and blew up my site the other day, had to rebuild.
everyone post your favorite bubble links here and I'll redo that section
thanks!
The falling dollar will help drive up salaries and reduce the trade imbalance. Offshoring of work will become less attractive, manufacturing at home will become more attractive. Rising salaries will help make housing affordable.
The real lie that nobody in this honest blog-site address is, why should the dollar be worth as much as it is. Why should a worker in the US doing the same job make many times the effective salary of someone in China/India. That will get flattened as part of globalization, a cheaper dollar allows higher numerical salaries for survivors and less disparity for a given job globally.
Americans have had it good for too long, mostly for historical reasons. If one dollar drops in value to 200 yen Yuan, homes dont look overpriced anymore.
The FED strategy was to simply and often fraudulently inflate home prices prior to crashing the dollar. Imagine if it happened any other way. Its not the FEDs fault that innovation and progress out of Silicon valley and the biotech world is largely worthless. The dollar would certainly have maintained a premium if such progress had happened. We of course are too busy selling real-estate to actually be making anything useful except IPODS, cool cellphones and other entertainment devices.
The other scam as bad as real-estate is the medical system. The AMA is a union that drives up prices, breeds arrogance and results in expensive or non-existant medical services for vast swaths of the population. These doctors are not much better than real-estate types ... need some good blogs on this whole subject ... need to break the stranglehold.
Thank you epictetus, Thank you , Thank you!! You just gave me a goldmine of info!!!!
You are just like the Greek philosopher Epictetus, except for your lack of common sense.
There is a tendency of objects with mass to accelerate toward each other. (It’s called gravity)
Tom
Wow, that was one hell of a post...
Trouble is we've already repudiated the $! You can't git no stinkin gold with them thar paper tickets. And even when u want to use them to buy, say, an Oil Co or a port operator we say "sorry, your money's no good here."
Gee I wonder why nobody wants them anymore.
It feels like shorting the dollar is easy money -- I've been doing it for months. Even Bill Gates is doing it.
My blog sucks, but the links on the right side of it are to golden bubble sites.
The is a indicator that the dollar will move up! Newsweek and Time are always a day late and a $$ short on their stories!
Hmm, sell house when Time Mag puts housing boom on cover.
But!! Buy gold when Newsweek puts shrinking dollar on cover.
I get it. Time Mag is dumb. Newsweek is smart.
Right.
the newsweek cover is from last year - not current, but sure is still true today
The dollar was up last year but has been falling this year. If Helicopter Ben decides to stop the rate hikes and keeps the printing presses rolling, then why shouldn't the US$ drop like a rock?
yea, and it may be time to start shorting gold when pin heads on a housing bubble blog start pumping it.
buying gold WAS a bright idea last year ... what wise men do in the begining; fools do in the end.
When that newsweek cover was published in late March of last year, the dollar traded at 81. It never traded lower.
Now, with negative dollar sentiment even higher, the dollar is 83.88.
The trade now is long the dollar.
There are a lot of long positions in gold right now, and bullish sentiment is unusally high. Gold may be in a longer-term bull market, but at this point it could burn a lot of speculators with a typical 20% pullback. Caution.
Hey-
Just now switched 10% of my portfolio to RYWBX - a Rydex fund that moves counter to the dollar. Took your tip about a month ago on GLD and made a killing already.
I've got some pretty heavy bets riding on inflation. Thinking about finding a way to bet on a housing market crash. Hedgestreet?
Nice call Saturday on the dollar and gold, Anonymous!
Great site lots of usefull infomation here.
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Nice colors. Keep up the good work. thnx!
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Hallo I absolutely adore your site. You have beautiful graphics I have ever seen.
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