The U.S. Dollar about to break out ?

reply to post by benrl


There is always a currency, my friend. Unless you want to figure out how many eggs a battery is worth.

In currency collapses new competing currencies always rise shortly afterwards

By the way, if gold was a bubble you would see everyone on MSM talking it up. The majority of people in the U.S. have never given gold a thought past jewelry. The stampede will come, and a bubble will form, but we are quite far from that (1-3 years from now)

I sure hope so. this economy has got to get better and fast

reply to post by TDawgRex

the investors are being played by the big fishies...
there's enough people with more than enough money to make anything rise and fall at a whim...
I kind of think that it's time for us little fishies to just sit back and watch the show, or we'll probably end up in some sharks tummy!!

Goldman Takes a Dark View (Goldman Sachs Issues Bleak Economic View)

online.wsj.com...

More info:

www.scribd.com... (original document)

www.economicvoice.com...

www.businessinsider.com...

theeconomiccollapseblog.com...

In the report, Goldman strategist Alan Brazil argues that:

European banks need $1 trillion of capital (bailout)
US small businesses are still sucking wind (and they're the ones that create jobs)
China's growth is probably not sustainable
Solving a debt problem (ours) with more debt doesn't work

He also recommends ways to "play" this debacle:

Buy a six-month put option on the Euro versus the Swiss Franc, thus betting the Euro will drop against the Franc (the Franc being the currency that an official Goldman report recently referred to as the most overvalued in the world)
Buy a five-year credit default swap on an index of European corporate debt—the iTraxx 9. This is a bet that some of these companies will default, and your insurance policy, the CDS, will pay off.

www.businessinsider.com...

GOLDMAN: The World's Going To Hell In A Handbasket—Here's How To Cash In!

Bankrupt FED claims to have a range of policy tools available. Chairman Bernanke today gave no hint however that any tools will be put to work by the FED.

The FED is leveraged 50-60 times against its capital, i.e. technically about insolvent. All it can do is shuffle its portfolio around, from short notes to long bonds, that is all.

break out? nah , but break down totally.

reply to post by USAisdevil


The dollar is doing quite nicely at the moment and seems about to break out of resistance around 76. Momentum looks promising.

The price of money (debt) remains at a 100-year high in the current deflationary environment:

[atsimg]http://files.abovetopsecret.com/images/member/1406754cbebf.jpg[/atsimg]

Well, 70-year high, 140-year high, take your pick.

This chart shows the 10-year yield at 2.19%, it´s actually presently at 1.99%.

[atsimg]http://files.abovetopsecret.com/images/member/50fe08653a8a.jpg[/atsimg]

Originally posted by galdur
In fact, with the price of US bonds at a 70-year high and yields at a corresponding low - why would anyone accumulate gold and silver?

The answer is in the question.

Why would anyone buy expensive gubmn't bonds yielding a paltry 1.99% (10yr) when the "official" rate of inflation is currently 3.6% and rising ? That translates to a negative real ROI of -1.91% if CPI remains flat...which it won't

Meanwhile, senior Gold shares like Barrick Corp are yielding .87% every 6 months (17.4% across 10yrs).

Mom says: Don't ever loan the gubmn't money for a negative real return on investment unless you have money to burn. Buy Gold & good Gold shares.....stupid!

GL

reply to post by OBE1


Gold can very easily drop $100-200 in two days as we have seen recently. I think a $500 drop in two-three days toward key technical support is quite likely rather soon in this extremely overbought market.

The gold market is miniscule compared to currency and bond markets. Therefore it´s especially vulnerable to even minor rises in the dollar.

Bonds trade at price. Therefore their returns have been staggering to say the least. I don´t see any likelihood of their price falling by 10% or more in a couple of days. Quite the contrary, major figures like Buffett have stated that they´ll buy govt. paper at even zero % yield.

reply to post by galdur


gold will drop to 1200$ after october 2011..

and by 2012 end dollar will fall to high inflation and lose value

reply to post by USAisdevil


Uncle Sam is the way biggest of all "too big to fail" situations. I think its 10-year notes will be bought down to about zero% and the 30-year bond down to 1% if needed. I don´t see any inflation to speak of on the horizon, only that rising tsunami of technological advances, oversupply and overcapacity. Deflation will be the name of the game in coming years.

Too early to tell for sure if the mommy of all short squeezes is about to start in the dollar, but it does look springy at the moment. The dollar index is now at a 6-month high. We´ll see.

Originally posted by galdur
reply to post by yourmamaknows

 

If the dollar starts to run, these things will be crushed.

In fact, with the price of US bonds at a 70-year high and yields at a corresponding low - why would anyone accumulate gold and silver? In a deflationary environment (high demand for money) it makes more sense to preserve cash and pick up things later when prices have fallen.

This is the third time you have "ramped" this idea and now you actually start a thread about it....
Be bullish all you like on the dollar but you will not change the trend. The graph you post shows 2 rises in the dollar, both which coincide with QE1 & QE2..... and then the subsequent decline. Obama just announces a 500BnUSD Jobs program and where do you think the money for that will come from? Thats gotta push Gold over 2K very soon.

I would love to see the world economy take a turn on the upside but I cannot see it coming anytime soon.
USA is still spending faster than it can earn so the only way for the dollar is down.

why would anyone accumulate gold and silver.?

face-palm.....

PEACE,
RK

Well, the dollar is up to 77, so it´s a breakout all right.

We´ll see how far it runs.

Galdur,

For many years on ATS myself and some of the other members with a "handle" as such of what really happens in the world of finance, predicted and warned all that came about due to the 2008 crisis.

I some years before mentioned the mortgage problem securitization and debt etc.

Now amongst all that there were many posters who had the opposite view, the msm view and posted many positive predictions about the future and strength of the US economy etc.

They all turned out wrong, however very very few of them actually had any idea what they were talking about in any way at all.

They were just repeating the mantra as told by cnbc or whatever, they had no idea how to hold a chart, what a yield or return was, etc etc.

Now I do disagree as have mentioned very lightly with your premise (passed 3 -6 months) but I do have to say that you do come from a position of knowledge on this, you at least seem unlike 99% of posters on this subject on ATS have a "handle" on it, so I do respect that.

When I have more time soon maybe if you would like we could do a "debate" on the opposing sides, and certainly will weigh in with a lot more depth, facts and figures like yourself on this thread soon.

In the meantime, you are right on pointing out the rising yields, as shown.

However what is your thoughts on how this yield in any way compensates for the current inflationary pressures which are rising fast.

Is it truley an profit or erosion due to inflation unless the yields are above 7%?


Kind Regards,

Elf

MischeviousElf, I don´t see any inflation only extreme oversupply and overcapacity. This is then confirmed by the 100-year high price of money (debt) I think. The bond market will continue pricing in deflation.

Now; as I described a run of the dollar was technically inevitable and besides a rising dollar is an economic necessity for the US at present. Basic cost of economic input from commodities must be beaten down mercilessly. This will decrease small business expenses, bolster their profits and encourage hiring. This will also increase consumer purchasing power, bolstering their spending - again helping small business and its hiring.

reply to post by galdur


Ok in the UK we have inflation around 4-7% though of course the government figures leave out the rising cost of food and also housing (rents going up).

True inflation is around 7% not the 5% they bandy.

Investor NOW

£100k

Wants to protect his money and have a return on it for one years time, ie needs to have more than 105K so his wealth is not devalued.

Please show me how inflation is not part of it as it is rising, it is soo apparent the West esp the UK and USA are actually in Bi -flation at the moment, the same scam all countries use to fool the public for a few years more and keep the plasmas selling.

Where in which of your dollar investments would you see a return on the investment and also to protect against that inflation.

The yields have to be around 8% or higher to make it worthwhile?

Kind Regards,

Elf