Dave Wrixon

Monday FX View: Aussie Dollar Finds More Reason to Rally

Still don't get this concept that the Rest of the World is somehow higher risk than the US. The massive Federal Debt and the underlying currency weakness make all US assets a huge risk, and that is without analyzing why most are performing, and the credibility of the those that are. The only US asset that is safe bet is Gold provided you have physical control and it is outside the US.

Friday FX View: Debate Continues to Rage Over U.S. Recovery Rally for Dollar

The US Government does not want a weaker dollar. They are doing everything in their power to manipulate the markets to keep the dollar strong.

Why? Well, simply because a collapsing currency will force higher interest rates, and they cannot afford to finance higher interest rates on US Government debt. The US economy is based on Everything for Northing Market Manipulation, that will continue as long as Obama draws breath.

Monday FX View: Dollar Marginally Firmer in Quiet Trading

I think the one thing Britain has got going for it, is, however, bad the numbers are they are credible. Britain has pumped a lot of money into the banks, but none of it was a free ride. Each bank has paid in equity and the government got most of it at distressed pricing, so my guess is that we will see a substantial profit for the tax payer. I would not like to make the same prediction for Uncle Sam. Even if it happens, it will only because the nation has had its savings inflated away.

Friday FX View: PBOC Governor Pours Fuel on the Dollar Fire

I don't believe there are methodological flaws but the LR Index is very backward looking as it compiles a complete list of completed sales. That does give much of an idea was is happening at the leading edge. Right Move provide an index was lives right on the cusp and picks up very early changes in the market, but because it is base on inquires rather than sales it is a little temperamental. It projects are not always confirmed by the LR. The most quoted figures come from the Halifax and the Woolwich, being the largest and largest independent lenders respectively I believe. These figures are based on contracts struck, I understand and therefore are much more reliable than Right Move and much more timely than LR.


On Jun 27 09:06 AM onebir wrote:

> "The British pound rose against the dollar to $1.6476 despite a government
> report from the Land Registry that showed for the 13th straight month
> the average price of British homes declines. This is the overall
> and nationwide figure and one of perhaps four surveys. "
> It's not a survey, all property transactions are registered at the
> Land Registry and the Land Registry figures are based on the full
> dataset. This *would* make it more accurate than the lenders surveys,
> but unfortunately constructing property price indices is complex
> & my recollection is the LR index has some methodological flaws.
>
>
> "The others are run by mortgage lenders and at least a pair of these
> recently reported a blip upwards in home prices."
> I doubt the monthly changes in these indices are consistent very
> often.

Wednesday FX View: Pound Weakens as Unemployment Rises

Actually, the employment figures, whilst weak, were stronger than expected. If the currency markets where adversely surprised, it is because they had their head up their arses.

Friday FX View: Japanese Support for Dollar Assets Trumps Chinese Data

Spot on except that you fail to mention their huge dollar reserve which have largely been accumulated to prevent the Yen appreciating too much against the dollar to the dollar for the same reasons as you describe.

Naive is rather a polite way of putting it, but pork farmers are under enough pressure without me making unfair comparison with what is actually a very intelligent creature.

On Jun 12 04:51 PM elliot_mllr wrote:

> Clearly Japan has its own reasons for wanting to strengthen the USD
> viv-a-vis the yen, and to thereby weaken the yen and enhance Japanese
> exports. Traders who take these statements at face value are naive
> to say the least.

Friday FX View: Japanese Support for Dollar Assets Trumps Chinese Data

Spot on except that you fail to mention their huge dollar reserve which have largely been accumulated to prevent the Yen appreciating too much against the dollar to the dollar for the same reasons as you describe.

Naive is rather a polite way of putting it, but pork farmers are under enough pressure without me making unfair comparison with what is actually a very intelligent creature.

On Jun 12 04:51 PM elliot_mllr wrote:

> Clearly Japan has its own reasons for wanting to strengthen the USD
> viv-a-vis the yen, and to thereby weaken the yen and enhance Japanese
> exports. Traders who take these statements at face value are naive
> to say the least.

Thursday FX View: Dollar Quandary

The Gold Standard is nonsense. If every paper dollar was backed by Gold then Gold would be the only thing that was worth anything. Everything else would be worthless. The Gold Standard only ever worked because there was only ever partial backing of the currency. There was never enough Gold in the World to achieve what the Gold bugs desire and even if there were, it would only dilute its own worth. The Money system just does not work and has not done so in a very long time. Perhaps, in the "Modern World" the Arabs got closest to the kind of gold based system you aspire to, at least until fairly recently. Look what that did for their economic development.

The problem is that to make Gold Backed Money work you have to accept the principle of partial backing. Once you have done that frankly it is no different that any other Fiat money system.

Friday FX View: It Won't Happen Overnight

It would be handy if you could just get to grips with the difference between current year budget deficit and total accumulated debt.

On the first measure the US is comparable with other nations. In the second and more critical measure, it is in a far worse mess. Britain may be running substantial deficits, but the difference is the time period over which these have occurred.

Friday FX View: Eurozone Growth Slump Accentuates Risk Reversion

At least you can put some credence in the EU data.

Wednesday FX View: Oh My Darling

Be careful what you wish for. The current crisis could provide the necessary political momentum for that to happen. It was public support that was previously lacking. Britain like the US is still suffering delusions of empire.

If the UK did joint the Euro, that would provide the Euro with very signficant momentum which would almost certainly trigger a massive realignment of the dollar, whose status as the World's Reserver currency would no longer be credible.

It may of course be that there has been tentative agreement avoid rocking the boat at this stage. In any event, those that live in green houses should throw stones.


On Apr 23 03:00 AM Moon Kil Woong wrote:

> So far the EU countries have proven they can't abide by a single
> constraint they agreed to upon signing the EU charter. Which makes
> you wonder why the UK didn't join. There seems to be no real constraints
> to having signed and you get a cool more stable currency than the
> Pound with pretty colors on it.