dtblount's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/183579/comments http://seekingalpha.com/article/141842-inflation-concerns-are-premature?source=feed#comment-537731 537731
Home prices have yet to find a bottom, unemployment continues to climb (albeit, at a slower pace, but climbing nonetheless...leading to lower wages), and a dropping capacity utilization figure...combined with anemic growth in nearly every other region of the world...makes the inflation argument quite weak. Granted, yes, the monetary base has increased drastically (and somewhat irresponsibly, in my view...), but the excess liquidity is mostly sitting idly at banks. The Fed can adjust rates to sop up much of the liquidity once lending resumes and money velocity ticks upwards again.

Simply announcing that inflation is upon us because oil prices are rising is ridiculous. While oil is dollar-denominated, many other factors play into spot crude prices...as goes with every other commodity.]]> Mon, 08 Jun 2009 16:40:27 -0400
Home prices have yet to find a bottom, unemployment continues to climb (albeit, at a slower pace, but climbing nonetheless...leading to lower wages), and a dropping capacity utilization figure...combined with anemic growth in nearly every other region of the world...makes the inflation argument quite weak. Granted, yes, the monetary base has increased drastically (and somewhat irresponsibly, in my view...), but the excess liquidity is mostly sitting idly at banks. The Fed can adjust rates to sop up much of the liquidity once lending resumes and money velocity ticks upwards again.

Simply announcing that inflation is upon us because oil prices are rising is ridiculous. While oil is dollar-denominated, many other factors play into spot crude prices...as goes with every other commodity.]]> http://seekingalpha.com/article/140042-will-china-dump-the-dollar?source=feed#comment-521784 521784
I think China will, of course, continue to buy Treasuries with their dollars because they have a positive yield and are basically as liquid as USD...and still risk free...but they will also continue to purchase a growing percentage of hard assets for reserve - and even future use - purposes. This just makes sense in terms of general portfolio and risk management practices.]]> Thu, 28 May 2009 15:31:31 -0400
I think China will, of course, continue to buy Treasuries with their dollars because they have a positive yield and are basically as liquid as USD...and still risk free...but they will also continue to purchase a growing percentage of hard assets for reserve - and even future use - purposes. This just makes sense in terms of general portfolio and risk management practices.]]> http://seekingalpha.com/article/139963-are-we-headed-for-hyperinflation?source=feed#comment-521755 521755 Thu, 28 May 2009 15:12:59 -0400 http://seekingalpha.com/article/139722-u-s-dollar-worst-investment-ever?source=feed#comment-519960 519960 Wed, 27 May 2009 14:32:53 -0400 http://seekingalpha.com/article/139522-how-to-profit-from-possible-u-s-credit-downgrade?source=feed#comment-518518 518518 Tue, 26 May 2009 16:35:21 -0400 http://seekingalpha.com/article/138853-why-these-currencies-will-benefit-from-china-s-commodities-purchases?source=feed#comment-513246 513246 Thu, 21 May 2009 14:17:47 -0400 http://seekingalpha.com/article/138820-peak-gold-the-new-paradigm?source=feed#comment-513202 513202
With oil, it is pulled out of the earth, refined, and consumed/destroyed. Demand for oil, on a long-term basis, is rising, while supply is shrinking.

I prefer being long of oil over gold any day for speculative long-term price appreciation based on a simple supply/demand relationship.

That being said, I also do not believe that all market participants act rationally. It makes no sense for humans to dig gold out of the earth, refine it, shape it, and stash it away in vaults...but people still do...and the price of gold rises and falls. Despite my obvious preference for being long of oil right now, I still hold some gold as a sort of "armageddon hedge."]]> Thu, 21 May 2009 13:58:27 -0400
With oil, it is pulled out of the earth, refined, and consumed/destroyed. Demand for oil, on a long-term basis, is rising, while supply is shrinking.

I prefer being long of oil over gold any day for speculative long-term price appreciation based on a simple supply/demand relationship.

That being said, I also do not believe that all market participants act rationally. It makes no sense for humans to dig gold out of the earth, refine it, shape it, and stash it away in vaults...but people still do...and the price of gold rises and falls. Despite my obvious preference for being long of oil right now, I still hold some gold as a sort of "armageddon hedge."]]> http://seekingalpha.com/article/137879-looking-to-buy-bric-the-abc-s-are-better-part-ii?source=feed#comment-505523 505523 Fri, 15 May 2009 13:25:30 -0400 http://seekingalpha.com/article/137504-fool-me-once-bill-miller-meredith-whitney-face-off-again?source=feed#comment-503798 503798 Thu, 14 May 2009 12:21:14 -0400 http://seekingalpha.com/article/137633-what-does-dr-copper-think-of-the-economy?source=feed#comment-503750 503750
Either way, SRB buying has slowed the momentum of copper's climb, so I am expecting a shorter term pullback over the next two months or so...then a continued climb as 1) global economy begins to recover, 2) SRB begins to buy again, and 3) bottleneck with mining firms having less access to credit and less cash on hand due to 2008 collapse in commodity prices leading to scaled-back mining operations, less exploration, and fewer mine openings.

That aside, diversifying from USD and UST holdings is an excellent idea for China for several reasons: 1) diversification, when you are essentially a massive pension fund, is ALWAYS a good idea, no matter the risk, 2) raw materials priced in USD are a direct use of China's USD reserves, so fewer political issues, and 3) China needs/will need raw materials of all kinds, so stockpiling the basics makes sense for a growing economy.

I like copper and have been in JJC since late February.]]> Thu, 14 May 2009 11:56:17 -0400
Either way, SRB buying has slowed the momentum of copper's climb, so I am expecting a shorter term pullback over the next two months or so...then a continued climb as 1) global economy begins to recover, 2) SRB begins to buy again, and 3) bottleneck with mining firms having less access to credit and less cash on hand due to 2008 collapse in commodity prices leading to scaled-back mining operations, less exploration, and fewer mine openings.

That aside, diversifying from USD and UST holdings is an excellent idea for China for several reasons: 1) diversification, when you are essentially a massive pension fund, is ALWAYS a good idea, no matter the risk, 2) raw materials priced in USD are a direct use of China's USD reserves, so fewer political issues, and 3) China needs/will need raw materials of all kinds, so stockpiling the basics makes sense for a growing economy.

I like copper and have been in JJC since late February.]]> http://seekingalpha.com/article/137412-claymore-introduces-three-actively-managed-commodity-etfs?source=feed#comment-502343 502343 Wed, 13 May 2009 13:38:34 -0400 http://seekingalpha.com/article/136854-will-market-vectors-africa-etf-continue-to-outperform?source=feed#comment-499394 499394 Mon, 11 May 2009 15:56:00 -0400 http://seekingalpha.com/article/133231-swine-flu-and-the-mexican-narco-state-no-time-to-be-long?source=feed#comment-479517 479517
I would also categorize Mexico as being more risky in the short run...all of these problems (cartel violence, swine flu, reduced remittance inflows, etc) are more short-term. In the long run, I am very bullish of Mexico. Communications, infrastructure, and basic services are not "compromised." I'm not sure what you are focusing these comments on, but electricity, water, transportation services, etc. are still up and running fine.

While the recent swine flu has caused a hiccup in DF, only about 100 people have died in Mexico so far. While this is still terrible, it is hardly the type of outbreak that would lead to the level of political instability you are assuming.]]> Mon, 27 Apr 2009 13:58:00 -0400
I would also categorize Mexico as being more risky in the short run...all of these problems (cartel violence, swine flu, reduced remittance inflows, etc) are more short-term. In the long run, I am very bullish of Mexico. Communications, infrastructure, and basic services are not "compromised." I'm not sure what you are focusing these comments on, but electricity, water, transportation services, etc. are still up and running fine.

While the recent swine flu has caused a hiccup in DF, only about 100 people have died in Mexico so far. While this is still terrible, it is hardly the type of outbreak that would lead to the level of political instability you are assuming.]]> http://seekingalpha.com/article/132765-why-you-should-hold-aussie-new-zealand-dollars-and-gold?source=feed#comment-476385 476385 Fri, 24 Apr 2009 16:36:32 -0400 http://seekingalpha.com/article/132239-invest-in-bic-not-bric?source=feed#comment-474723 474723
While the RUB has taken a beating and the government has closed trading several times lately, it still provides amazing opportunity. With respect to your own argument, how is it any better than China??? China's currency is pegged/manipulated (depending on who is analyzing it), and the gov't has an even tighter grip on the economy and market than does Russia's. Granted, the Chinese have not exhibited such control lately, but the risk is still very much there. You could argue that Brazil is the weakest because Lula doesn't really have a formal education...or that India is the weakest because they suffer from a plethora of red tape from the British Colonial era. Your one line argument seeking to discount Russia is hardly sufficient. I am incredibly bullish of China...as well as India, Brazil, Russia, and a host of other EMs and FMs.

A country as rich in natural resources as Russia (crude, natty, platinum, palladium, gold, fresh water, grains, etc, etc) - not to mention a pretty decent military with regional diplomatic influence and FX reserves should absolutely be considered for investment. They could be self-sufficient if need be - plus, they have an energy stranglehold on Europe. Yes, there are risks...but I feel the rewards far outweigh these.

Instead of removing any one of the BRICs, I'd focus my time and efforts on figuring out who should be added.]]> Thu, 23 Apr 2009 15:45:41 -0400
While the RUB has taken a beating and the government has closed trading several times lately, it still provides amazing opportunity. With respect to your own argument, how is it any better than China??? China's currency is pegged/manipulated (depending on who is analyzing it), and the gov't has an even tighter grip on the economy and market than does Russia's. Granted, the Chinese have not exhibited such control lately, but the risk is still very much there. You could argue that Brazil is the weakest because Lula doesn't really have a formal education...or that India is the weakest because they suffer from a plethora of red tape from the British Colonial era. Your one line argument seeking to discount Russia is hardly sufficient. I am incredibly bullish of China...as well as India, Brazil, Russia, and a host of other EMs and FMs.

A country as rich in natural resources as Russia (crude, natty, platinum, palladium, gold, fresh water, grains, etc, etc) - not to mention a pretty decent military with regional diplomatic influence and FX reserves should absolutely be considered for investment. They could be self-sufficient if need be - plus, they have an energy stranglehold on Europe. Yes, there are risks...but I feel the rewards far outweigh these.

Instead of removing any one of the BRICs, I'd focus my time and efforts on figuring out who should be added.]]> http://seekingalpha.com/article/131931-eleven-trading-tips-from-george-soros?source=feed#comment-471775 471775 Tue, 21 Apr 2009 17:19:43 -0400 http://seekingalpha.com/article/131317-what-moving-averages-indicate-for-emerging-and-developed-markets?source=feed#comment-466921 466921 Fri, 17 Apr 2009 14:32:23 -0400 http://seekingalpha.com/article/131318-aussie-dollar-should-recover-first?source=feed#comment-466903 466903
I think China will begin to stabilize and recover first, but not fully. Full recovery in China is dependent on US and EU demand, which will take some time - if ever - to get back to what it once was. China has already become a net importer of nearly every commodity and raw material...and Australia is where a lot of it comes from. This, along with the quick actions by Stevens @ RBA and a very pragmatic PM Rudd, have helped the Aussie economy avoid too much distress.

Along with the general carry trade appeal, I really like AUDJPY and see it much higher...especially as JPY BoP situation continues to deteriorate with no end in sight. Grains and metals will see an increase in demand much sooner than plasma TVs and Lexus autos.]]> Fri, 17 Apr 2009 14:17:59 -0400
I think China will begin to stabilize and recover first, but not fully. Full recovery in China is dependent on US and EU demand, which will take some time - if ever - to get back to what it once was. China has already become a net importer of nearly every commodity and raw material...and Australia is where a lot of it comes from. This, along with the quick actions by Stevens @ RBA and a very pragmatic PM Rudd, have helped the Aussie economy avoid too much distress.

Along with the general carry trade appeal, I really like AUDJPY and see it much higher...especially as JPY BoP situation continues to deteriorate with no end in sight. Grains and metals will see an increase in demand much sooner than plasma TVs and Lexus autos.]]> http://seekingalpha.com/article/131063-what-you-need-to-know-about-commodity-markets-gold-and-oil?source=feed#comment-465523 465523
Taking a look at the comments, I saw MADE IN SOMALIA's profile and took a look at his website (www.mkapital.com/)...w... I would encourage anyone to do if they want a good laugh and a nice link to pass around...the pictures and random charts are priceless!]]> Thu, 16 Apr 2009 14:25:01 -0400
Taking a look at the comments, I saw MADE IN SOMALIA's profile and took a look at his website (www.mkapital.com/)...w... I would encourage anyone to do if they want a good laugh and a nice link to pass around...the pictures and random charts are priceless!]]> http://seekingalpha.com/article/131012-blue-gold-the-ultimate-commodity?source=feed#comment-465370 465370 Thu, 16 Apr 2009 13:00:19 -0400 http://seekingalpha.com/article/131048-emerging-markets-are-coming-back-to-life?source=feed#comment-465350 465350 Thu, 16 Apr 2009 12:48:40 -0400 http://seekingalpha.com/article/131067-ben-bernanke-will-bring-back-the-70s-inflationary-economy?source=feed#comment-465309 465309
Right now, we are more in a period of deflation than inflation - so inflation will come...but it will be needed and will be the result of a recovery. Either way, hard assets should rise...especially in light of a weaker USD.]]> Thu, 16 Apr 2009 12:22:55 -0400
Right now, we are more in a period of deflation than inflation - so inflation will come...but it will be needed and will be the result of a recovery. Either way, hard assets should rise...especially in light of a weaker USD.]]> http://seekingalpha.com/article/130768-my-q1-report-card?source=feed#comment-462985 462985
Something else to add to your recommendations - along the lines of commodities - is to take a look at smaller commodity-producing emerging markets, as a marginal recovery in developed nations should really boost these ETFs and currencies.]]> Tue, 14 Apr 2009 13:07:55 -0400
Something else to add to your recommendations - along the lines of commodities - is to take a look at smaller commodity-producing emerging markets, as a marginal recovery in developed nations should really boost these ETFs and currencies.]]> http://seekingalpha.com/article/128859-emerging-markets-the-return-of-decoupling?source=feed#comment-455039 455039
I haven't worked out any of the figures, but I am sure that the marginal demand from various stimulus packages around the world (US, China, etc) will work to magnify economic stability and possibly growth in some smaller raw materials-exporting nations. Of course, any "buy American/British/Chinese" stimulus package cuts down on this effect, but raw materials are another story. For example, if the Chinese gov't decides to build more apartment buildings, they will need copper. Domestically, China is already using up all the copper they produce, so they will get it from elsewhere...Chile, Peru, Zambia, etc. Regardless of China's economic recovery, massive purchases of copper from these nations will definitely have a magnified impact on their respective economies and GDP.

Much of the more-developed world relies on emerging/frontier nations for metals, minerals, ags, etc...and this will only grow stronger with time.


On Apr 01 03:15 PM AndrewBaker wrote:

> Decoupling will happen in time ... but not so much just yet. The
> emerging markets still need to export to us and the west to get the
> growth they want and need. As they improve internally, then their
> own populations will want nicer and better things, and that will
> cause the decoupling effect to happen and show due to their own thriving
> internal economies. It will come, but I'd wait for our recovery to
> show first, then back the emerging economies to shoot ahead.]]> Tue, 07 Apr 2009 12:51:07 -0400
I haven't worked out any of the figures, but I am sure that the marginal demand from various stimulus packages around the world (US, China, etc) will work to magnify economic stability and possibly growth in some smaller raw materials-exporting nations. Of course, any "buy American/British/Chinese" stimulus package cuts down on this effect, but raw materials are another story. For example, if the Chinese gov't decides to build more apartment buildings, they will need copper. Domestically, China is already using up all the copper they produce, so they will get it from elsewhere...Chile, Peru, Zambia, etc. Regardless of China's economic recovery, massive purchases of copper from these nations will definitely have a magnified impact on their respective economies and GDP.

Much of the more-developed world relies on emerging/frontier nations for metals, minerals, ags, etc...and this will only grow stronger with time.


On Apr 01 03:15 PM AndrewBaker wrote:

> Decoupling will happen in time ... but not so much just yet. The
> emerging markets still need to export to us and the west to get the
> growth they want and need. As they improve internally, then their
> own populations will want nicer and better things, and that will
> cause the decoupling effect to happen and show due to their own thriving
> internal economies. It will come, but I'd wait for our recovery to
> show first, then back the emerging economies to shoot ahead.]]> http://seekingalpha.com/article/129870-four-good-reasons-to-sell-the-euro?source=feed#comment-454988 454988
Short EUR vs anything, especially USD or JPY, is quite tricky though...since commodity prices, Xfer pricing/corporate FX, and the daily ebb and flow of equities (and a jittery VIX) can really add to short term volatility in chasing long term views.]]> Tue, 07 Apr 2009 12:22:32 -0400
Short EUR vs anything, especially USD or JPY, is quite tricky though...since commodity prices, Xfer pricing/corporate FX, and the daily ebb and flow of equities (and a jittery VIX) can really add to short term volatility in chasing long term views.]]> http://seekingalpha.com/article/128859-emerging-markets-the-return-of-decoupling?source=feed#comment-447976 447976
I'm very bullish on China (of course...but I don't think breakneck growth will last much longer - time for some stability), Chile (copper and fiscal responsibility...not many people seem to know what that is anymore!), Brazil (solid currency prospect, ags, oil/energy), South Africa (gold/platinum, I expect elections to go well, Zuma could be another Lula da Silva, Manuel is likely to stay), Russia (excellent nat'l resources, appears to be bottoming-out), Turkey (solid currency prospect, promising future in global trade and diplomacy due to military strength, geographic location, and population)...and Emerging/Frontier Markets on the aggregate (I like FRN and EEM, the basic ETFs).

I think China will lead the recovery, followed by smaller fiscally-conservative, resource-rich EMs/FMs, and the US (first of the developed nations).

Thoughts/responses?]]> Wed, 01 Apr 2009 12:02:58 -0400
I'm very bullish on China (of course...but I don't think breakneck growth will last much longer - time for some stability), Chile (copper and fiscal responsibility...not many people seem to know what that is anymore!), Brazil (solid currency prospect, ags, oil/energy), South Africa (gold/platinum, I expect elections to go well, Zuma could be another Lula da Silva, Manuel is likely to stay), Russia (excellent nat'l resources, appears to be bottoming-out), Turkey (solid currency prospect, promising future in global trade and diplomacy due to military strength, geographic location, and population)...and Emerging/Frontier Markets on the aggregate (I like FRN and EEM, the basic ETFs).

I think China will lead the recovery, followed by smaller fiscally-conservative, resource-rich EMs/FMs, and the US (first of the developed nations).

Thoughts/responses?]]> http://seekingalpha.com/article/127779-china-s-dollar-crocodile-tears?source=feed#comment-441105 441105
There is no immediate threat to the USD being dropped as the world's reserve currency...especially in light of all too many central bankers seeking weaker currencies, while we are happy with a strong USD...and I'm sure the world is happy to hold strong USD in their reserves.

The idea of a single "Global Central Bank" is simply terrible. The EUR is squeezed enough by the fact that the ECB has to set policy for countries as different as Germany, Slovakia, and Spain...how would blanket policy be set for countries as different as the US, Sweden, and Zimbabwe???]]> Thu, 26 Mar 2009 11:55:40 -0400
There is no immediate threat to the USD being dropped as the world's reserve currency...especially in light of all too many central bankers seeking weaker currencies, while we are happy with a strong USD...and I'm sure the world is happy to hold strong USD in their reserves.

The idea of a single "Global Central Bank" is simply terrible. The EUR is squeezed enough by the fact that the ECB has to set policy for countries as different as Germany, Slovakia, and Spain...how would blanket policy be set for countries as different as the US, Sweden, and Zimbabwe???]]> http://seekingalpha.com/article/127609-beware-the-un-s-fx-views?source=feed#comment-439890 439890
As for the UN, I respect and admire its goals (especially those regarding poverty reduction, etc.), but take issue with the attempts at executing many of these goals and the viability of the strategies used. It seems as if the UN has phased into more of a large think tank, capable of conjuring up interesting ideas and hosting elaborate summits with impressive attendees, but lacking in successful projects. I guess that's what happens when you crowd so many academics into a room...

The idea of China lending only in CNY, which is neither a reserve nor a free-floating currency, does not make any sense in this world right now. China needs USD (via USTs since hard currency yields 0%...while USTs are a bit better) almost as badly as the US needs to issue them.

As many issues as there are with USD being the world's reserve currency, it reminds me of the famous Churchill quote regarding Democracy...

"It has been said that Democracy is the worst form of government...except all the others that have been tried."

...change it around a bit...

It has been said that [the USD] is the worst [reserve currency]...except all the others that have been tried.

very true...]]> Wed, 25 Mar 2009 13:49:48 -0400
As for the UN, I respect and admire its goals (especially those regarding poverty reduction, etc.), but take issue with the attempts at executing many of these goals and the viability of the strategies used. It seems as if the UN has phased into more of a large think tank, capable of conjuring up interesting ideas and hosting elaborate summits with impressive attendees, but lacking in successful projects. I guess that's what happens when you crowd so many academics into a room...

The idea of China lending only in CNY, which is neither a reserve nor a free-floating currency, does not make any sense in this world right now. China needs USD (via USTs since hard currency yields 0%...while USTs are a bit better) almost as badly as the US needs to issue them.

As many issues as there are with USD being the world's reserve currency, it reminds me of the famous Churchill quote regarding Democracy...

"It has been said that Democracy is the worst form of government...except all the others that have been tried."

...change it around a bit...

It has been said that [the USD] is the worst [reserve currency]...except all the others that have been tried.

very true...]]> http://seekingalpha.com/article/125843-chinese-are-likely-to-halt-purchases-of-u-s-treasury-debt?source=feed#comment-424965 424965
China could slow or stop buying Treasuries, but eventually, all of their surplus usd has to come back to the US. China could buy oil from Saudi Arabia, copper from Chile, etc, etc...but the Saudis, Chileans, and everyone else then holding usd will have to do something with it. Since hard cash earns 0%, Treasuries make sense due to their liquidity and risk profile.

Something else that I see as completely ridiculous is the idea that the US could default on its external debt in "a few years." This is simply not true. As long as the usd is the world's reserve currency, with no ensuing threat of replacement (eur is more flawed than usd, gbp has nothing behind it anymore...), US debt can be monetized. My views on c/a deficits are the same as global warming, the effects of debt and pollution are difficult to measure and rationalize...but too much of either will always result in disaster. The only way I could see the US defaulting on its debt is to make enough terrible policy decisions (anti-business, protectionist), which could lead to Zimbabwe-esque inflation, making the usd absolutely useless aside from fire tinder...which isn't too realistic of a scenario in my view.

China does, however, have a genuine concern regarding usd inflation, as it would affect the yields on the Treasuries they hold...but I strongly feel that Wen's recent statements were political rhetoric more than viable threats. ...but if inflation does pick up or for some other reason China does carry through and reduces their Treasury exposure/purchases, the news alone would affect the markets.

It is funny/ironic/depressin... though, to see a world in which it seems that recent policy moves of the US are more socialist, while recent policy moves of China are more capitalist...

WHITEHAWK, great comments and I like the political translation...great contribution!

One thing I see through all of this... China is going to require massive amounts of essentially every traded and untraded commodity over the next decade or so. On top of that, if the recent threats are real and China does begin to purchase commodities with their usd for more than just consumption...especial... if they do so as an investment or hedge from a fear of usd inflation...commoditie... will absolutely take off.

The usd is a very flawed currency, as Jim Rogers tends to point out every time he gets in front of a camera (I share nearly every one of his views), but - for now - it is the best of the worst possible options as the world's reserve currency.

Thoughts???


Cheers]]> Fri, 13 Mar 2009 15:46:00 -0400
China could slow or stop buying Treasuries, but eventually, all of their surplus usd has to come back to the US. China could buy oil from Saudi Arabia, copper from Chile, etc, etc...but the Saudis, Chileans, and everyone else then holding usd will have to do something with it. Since hard cash earns 0%, Treasuries make sense due to their liquidity and risk profile.

Something else that I see as completely ridiculous is the idea that the US could default on its external debt in "a few years." This is simply not true. As long as the usd is the world's reserve currency, with no ensuing threat of replacement (eur is more flawed than usd, gbp has nothing behind it anymore...), US debt can be monetized. My views on c/a deficits are the same as global warming, the effects of debt and pollution are difficult to measure and rationalize...but too much of either will always result in disaster. The only way I could see the US defaulting on its debt is to make enough terrible policy decisions (anti-business, protectionist), which could lead to Zimbabwe-esque inflation, making the usd absolutely useless aside from fire tinder...which isn't too realistic of a scenario in my view.

China does, however, have a genuine concern regarding usd inflation, as it would affect the yields on the Treasuries they hold...but I strongly feel that Wen's recent statements were political rhetoric more than viable threats. ...but if inflation does pick up or for some other reason China does carry through and reduces their Treasury exposure/purchases, the news alone would affect the markets.

It is funny/ironic/depressin... though, to see a world in which it seems that recent policy moves of the US are more socialist, while recent policy moves of China are more capitalist...

WHITEHAWK, great comments and I like the political translation...great contribution!

One thing I see through all of this... China is going to require massive amounts of essentially every traded and untraded commodity over the next decade or so. On top of that, if the recent threats are real and China does begin to purchase commodities with their usd for more than just consumption...especial... if they do so as an investment or hedge from a fear of usd inflation...commoditie... will absolutely take off.

The usd is a very flawed currency, as Jim Rogers tends to point out every time he gets in front of a camera (I share nearly every one of his views), but - for now - it is the best of the worst possible options as the world's reserve currency.

Thoughts???


Cheers]]> http://seekingalpha.com/article/125554-is-the-dollar-rally-over-now?source=feed#comment-423538 423538
In the short term (3-6 months), I'm betting on a continued strong USD, especially vs EUR, GBP, CHF, and JPY as they approach ZIRP and USD further emerges as a safe haven. In the long term (6-18 months), I like CAD, AUD, NZD, BRL, and ZAR (although the upcoming elections could convince me otherwise...but I'm very optimistic about Zuma). I believe the recovery will come out of China, followed by the US...with inflation chasing behind. Commodities, as well as commodity-based currencies, will do extremely well.

Cinquero,

Thank you for the ridiculous analysis and rationale. You are attempting to throw opinions into an argument needing facts.

I especially like your view that housing in Berlin, specifically, will boom...because "many US citizens are already acquiring EU citizenship" ...excellent logic.


Cheers]]> Thu, 12 Mar 2009 15:34:59 -0400
In the short term (3-6 months), I'm betting on a continued strong USD, especially vs EUR, GBP, CHF, and JPY as they approach ZIRP and USD further emerges as a safe haven. In the long term (6-18 months), I like CAD, AUD, NZD, BRL, and ZAR (although the upcoming elections could convince me otherwise...but I'm very optimistic about Zuma). I believe the recovery will come out of China, followed by the US...with inflation chasing behind. Commodities, as well as commodity-based currencies, will do extremely well.

Cinquero,

Thank you for the ridiculous analysis and rationale. You are attempting to throw opinions into an argument needing facts.

I especially like your view that housing in Berlin, specifically, will boom...because "many US citizens are already acquiring EU citizenship" ...excellent logic.


Cheers]]>