posted on Apr, 21 2011 @ 02:42 PM
The last time the US dollar index bottomed near 71 was back in 2008. At the time the Dow Jones was building a shoulder formation near 13,000. Before
the end of 2008 the Dollar index shot up to 88 and the stock market fell off its shoulder from 13,000 down to 7500 in the few remaining months. Oil
prices and gasoline prices also peaked mid summer 2008, wholesale gasoline went over 3.50 a gallon which was still above our current spike of 3.35 a
The doomsday forecasters were calling for the dollar index to drop to 50 after the long fall that ended in 2008 at 71. There is nothing magic about
73 and you might think a double bottom formation at 71 would be a little too obvious.
Spoke to an analyst this morning that claimed the government wants some inflation to help ease the woes of the housing market collapse. He claimed
the US economy is much more resilient now coming out of the recession than irt was in 2008 and that fuel prices could rise another 20 percent without
crippling the current economy. There are even some companies like IBM that have been helped by the weaker dollar. It makes US export goods much more
competitively priced overseas.
So the question is how far will the fed led the dollar fall, surely a carbon copy repeat of 2008 would be a little unimaginative?