yank

The Dollar Is Safe for Now

Tony:
You are absolutely correct about the USD heading lower. The other dramatic event last week was the USD closing below 83.45 on Friday. That was a key support level. Now that it has been broken it is highly likely we will see it move below 80 in the next month. The commodity bull has resumed in "full force".

Yank


On May 09 11:36 AM Tony Daltorio wrote:

> The author is missing the key point. Yes, China will not dump trillions
> of dollars onto the market at once. But, China has already started
> down the road of GREATLY reducing their future purchases of US Treasuries.
>
>
> The consequences of this action will be that the Federal Reserve
> will have to print even more money - monetize even more of US government
> expenditures.
>
> This will lead to a much weaker US Dollar over the next few years
> and much higher inflation.

Chinese Currency Revaluation: Could It Hurt America?

Geithner is a hypocrite. All we need to do is obseve interest rate policiies worldwide as all countries are in a "debasement" mode heading towards zero interest rates. Does that sound like an argument for a strong currency? The major problem is that China's GDP has been averaging 10% growth per year for a long time while its largest trading partner (the USA) averages 3%. How long do you think that can continue? The problem facing China is how to transition from an "export-led" economy (like Japan) to a more "consumer-driven" economy like the USA without disrupting global trading patterns. They aslo face the challenge of finding employment for millions of people every year. Very tough problem for China to solve.