Hefaistos

The Case Against Investing in the Dow Industrials (For Now)

Concept for this article is nice... but it is a fundamental error to do this kind of technical analysis of long-term developments based on a linear scale chart. If you redraw the chart with the needed log scale, you will get another picture, other conclusions.

Crisis Strategy: Coping With Trillion Dollar Deficits

The dollar has been strengthening because of a flight into safety: Long Treasuries. Interest rates are 2-3 percent, which gives a real yield since we have deflation. However, prospects are lousy for the dollar, due to the stimulation packages, increasing the deficits in the balance of payments, increasing the risk of inflation. All of this should will eventually bring the dollar down.
But, we cannot understand the dollar's development without taking into account what's going on with the treasury bonds. Sooner or later we will see a flight from them, and a crash of prices. That will also bring the USD down from current levels. When will it happen? Whenever we see that the economy starts moving a bit, commodity prices will rise, there will be reflation. Timeframe? Maybe late this year.