Mr. G

Elliot Wave: The Dollar Is Set for a Major Rally

I never see any real alternatives from all the doomsday prophets to fix the current economic mess. Raising the FED rate to put a halt on the dollar decline would depress economic growth because it would not encourage banks to lend.

If we can get past the current unemployment rate and increase consumption, modify the sins in real estate lending, and stabalize our economic imbalances, there may be light at the end of the tunnel.

Any economic geniuses with a quick fix?

The Unemployment Rate in Perspective

It is difficult to look at older economic models and make any future predictions. The rise of capitaism after the cold war creates a new and different economic environment. At minimum, competition has increased dramatically, but the world has over 6 billion to feed and will create new consumers even more dramatically.

How the global markets play out creates pressure on the US to compete and the future is as best speculative as the "new" economic order unwinds.

The Dollar Coin: Two Sides of the Reserve Dollar

I suspect as long as the US remains the largest GDP, the dollar will remain as the reserve currency. So far, Japan, China and the Eurozone have not been able to displace our supremecy. I do not think that these disparate economies can unite into one currency structure to displace dollar status.

Is the Hated U.S. Dollar About to Rally?

Regarding the comments about raising the FED rate ,I recall lowering as being a stimulus to the US economy because it encourages easier lending to stimulate business. In the current environment, raising the rate would be detrimental until banks lend again, which they are not.

Raising the rate is frequently a response to slow the economy down to prevent inflation. As anyone can see, traditional thinkinking suffers when the markets are out of wack. GI

Jobless Recoveries Are a Recent Phenomenon

I think your analysis overlooks that out sourcing mfg jobs also decreases the surrounding activity that relates to mfg jobs and when firms move out of the country, the surrounding staff either moves or becomes unemployed, thus I do not see an exact correlation in your analysis. Obviously, you agree with supply side economics. Did not mean to raise hackles, but I dont see how outsourcing benefits America.

A 20% decrease due to mfg is significant, and tends to depress sentiment across the country which also discourages hiring practises from the locals. I will say your analysis correlates with the ISM-mfg index.GI

Jobless Recoveries Are a Recent Phenomenon

I agree that the 10.2% unemployment rate versus a 3% increase in GDP presents an unusual circumstance given historic data. I have given this some thought. My humble opinion is the the global rise in the BRIC nations, as they embrace some form of capitalism, is rendering the old models irrelevant, and the recent jobless recovery appears to be a product of US companies participating in revenue production on a global basis rather than an isolationist economy.

Under the BUSH economic policy,corporations were encouraged to find cheaper labor costs overseas. I think the current unemployment rate is directly proportional to that supply side reasoning. UNTIL THE CURRENT ADMINISTRATION FIGURES OUT A TAX POLICY to reignite higher local employment which I think they are trying to do with job stimulus, I fear that globalisation is the only answer to an increasing GDP.

Under this model, the unemployed are going to have to reeducate and the US is going to have to figure out how to put these people back to work if we expect consumption data to increase locally. GI

Is the Hated U.S. Dollar About to Rally?

Everyone talks about the dollar as if there is some overseer at a master contol switch that makes the decision while forgetting that the dollar index is traded against a basket of currencies, and its fair market value is determined by traders who determine the dollars value by market psycology, that is, the majority of traders controlling the direction of price.

The recent trend reversal was probably a massive liquidation by short sellers covering their bets because of all the chatter about dollar reversal. As the US economic indicators reveal confusing news, I would expect the dollar to consolidate which appears to be the case now. Traders are looking for positive news from the economic indicators before they are willing to bid the dollar higher.

Thursday FX View: Trichet Offers the U.S. His Sledgehammer

3% GDP increase and 10.2% unemployment. A question arises. What is holding up the US economy? I believe its the global economy and for US stock investors, those companies participating in the world wide economy will do the best. Locally, demand has waned. September inventories were down and this doesnt bode well for the holiday season and one might speculate the consumer has been severally damaged, not only from unemployment but in overall sentiment.

In the longer term, this does not support the dollar. I would speculate the dollar will remain in the downtrend longer term till US consumption picks up. GI

Tuesday FX View: Currency Traders Take a Beating as Dollar Rally Gives Way

The question concerning the Yuan is interesting. The most important point is that the value of any currency is how the universe of traders see it on the spot market, not any true value. For example, for the US to have a strong dollar policy is a worthless statement if the universe of traders do not perceive the dollars fair market value as strong.
A better question is what causes a currency to be perceived as strong? In my opinion, the value of any currency is determined by the set of economic indicators affecting the countries GDP. It is the constant ebb and flow of these indicators that traders perceive at any one time that ultimatley measures a currency value. Said another way, look at currencies as being a stock in a country.

At present China may be artifically depressing its currency to make its exports more competitive on the global export market. Considering Chinas economic growth rate, I believe the universe of traders would see its value higher than its current pegged rate. How much higher is a guess at best, but I would like to watch it trade once unpegged and my position would be long. GI

Tuesday FX View: Currency Traders Take a Beating as Dollar Rally Gives Way

The dollar index recently made a major breakout from its downtrend. Was this a headfake or a signal for future upside movement? The ADP and ISM nonmfg reports do not support the upside, but an unexpected move in the unemployment rate on friday may have a more pronounced affect.
The dollar breakout may have been short covering as the demand for the dollar increases. It seems the US is just bumping along the bottom and if the unemployment rate is flat, I do not expect more upside to the dollar.GI

The Inverse Relationship Between Gold and the Dollar

Gold is heavily entrenched in the culture and subconscious of the Indian peoples. The recent purchase was unusual and affected the supply demand equation more than the anticipated inflation hedge. I believe the inverse relationship between the dollar and gold will return to normal once this aberration passes. The unemployment rate to be reported may have an influence on gold's direction, particularly if job loss keeps rising. . I always fear the huge downside gold exhibits when the institutional players sell off. Keep your eye on the Friday report for a short term read on gold's direction. GI

Monday FX View: A Smoother Start to a Week Has Dealers Mark Down Dollar

Just a technical note. The dollar has broken out of its downtrend since June. It could retrace back to 80 on the index. I think the unemployment indicator this friday could forecast future movement. I would still be on the sidelines in gold and oil. GI

Gold Stocks Slide as USD Index Strengthens – Should You Be Concerned?

I have traded the forex for some time and watched the gold bugs predict $2000 gold over 2 years ago only to see it go much lower. When gold drops, it tanks. Notwithstanding the current account deficit we can see, the US economy has unbelievable resilience. Just ask Gates and Buffet when they lost a billion or so from a previous current account read..I admit the situation is not bright, but caution is always advisable when playing real money. Keep your eye on the unemployment rate next friday. It is a heavy hitter and if it drops, you might be surprised. If it goes higher, I would say the long in gold is still on the table.

Gold Stocks Slide as USD Index Strengthens – Should You Be Concerned?

It is fairly obvious that gold and oil are trading inverse to the dollar index. Looking at the dollar index, It is still in its downward trend technically, but if it goes higher this week, gold and oil could break more to the downside, and the dollar could be bottoming which would be be a bigger reason to wait on the sideline till a more positive direction for the dollar is determined. The key is to watch the US fundamental readouts this week. The chopiness in the market may be resolved if the US economy committs to one side or the other.

American Ecology: Turning Trash into Cash

I do not see the US diminishing the supply of trash anytime soon. Nice find. GI