jeremiah74

Think Twice Before Shorting the U.S. Dollar

"But it will be a temporary blip. It's value, like all fiat currencies, is zero. And the US is pushing the dollar toward zero a lot faster than other countries around the world are pushing their currencies toward zero"

if all fiat currencies are worth zero .. can you send me some ? ;)
i'll pay you the cost of transferring it, and i'll send you something in barter.. :)

far too many people take a black/white view on this whole fiat money versus gold and Fed printing money - inflation story

fiat currencies are not worth zero. im sure you drove to work today and bought the fuel for money, and paid for your lunch with fiat money too. it is true that the piece of paper that you use to pay for lunch is not worth much, its only backed by faith. but this system is still better than bartering tomatoes for a laptop computer. right ?

now gold or silver when you used as a currency, as it was in the past , was also based on faith. you can make nice jewellery out of it, but apart from that its not worth much in itself.. only if you know that people will be willing to exchange it with you for something else.
whats worth more, a glass of water or an ounce of gold ? how about this question after you were lost for 2 days in the Sahara.. every concept of value is very much based on faith, perception.. not something written in stone

the reason why people nowadays have this obsession with gold , is that while paper money's supply can be manipulated by its issuer, gold is nobody's currency, its everybody's and supply can not be manipulated. nevertheless the fact that paper money has a flexible supply might have been useful at times to allow higher economic growth over the long run. where things went wrong is when the central bank is mandated to pursue goals that are contradictory to purely safeguarding the purchasing power of money. the Fed's mandate is for example slightly contradictory in this sense. as opposed to say the ECB, who has a mandate to maintain low inflation only. a single mandate like this is more credible, thats why the Euro has actually - despite many not believing in it - turned out to be a strong currency in its first 10 years

fiat money is here to stay. at least everyone better hope so, because if it doesnt than the world will look a lot like a Mad MAx movie

The Roots of the Coming Crash

"How big is the US dollar carry trade right now? A couple trillion dollars? I would rather say maybe a couple million dollars, tops."

lets get the order of magnitude here right.. there are hedge funds out there, and bank trading desks, individual currency punters/traders
who are short dollar in the billions. how ? not the way you described it:
"How many of you, individual investors or fund managers, have actually take a bank loan, use the cash to buy gold, silver, or other commodities. Bring the physical stuff home, and dig a hole to bury them in the backyard?"

there are easier ways than that in the 21st century. you can trade foreign exchange on a forward basis with no delivery only a need to post margin.

the global currency markets trade around 1-2 trillion dollars turnover every day. this may be a bit bigger than you imagine. if you thought millions is a lot of money ("say maybe a couple million dollars, tops.") then let me tell you that its actually peanuts compared to the likely size of US dollar short in financial markets. i think it could be a trillion dollars, or at least a few hundred billion..

Think Twice Before Shorting the U.S. Dollar

its likely that the market will push up interest rates in the US before the dollar falls further, if the economy recovers. and this will likely reverse the dollar's decline. political pressure to keep rates low is much stronger in other countries..

if there is no recovery than there will be another round of deleveraging, and the dollar being the funding currency it will rally.

in the short run, however anything is possible. the dollar can fall another 5% easily and gold go up 5% for example. but long term i dont think the dollar will collapse as many people seem to believe.

the yen and the euro will collapse before that

Think Twice Before Shorting the U.S. Dollar

there are indeed many arguments agains the dollar. but the same arguments are true also for the euro, the yen. these two other large economic blocs are also 'printing' money. other currencies like the yuan are not freely convertible, and then others like the pound not only have their own does of printing but the fundamentals behind the UK economy may be even worse than the US's

so the arguments against the dollar completely ignore the fact that the currencies agasint which the dollar is supposed to weaken are not in a better position to strengthen

thats why many people are buying gold.

i suppose you dont include interest earned on the dollar, which may or may not have outpaced the rise in prices. but in any case with interest earned, the 98% destruction claim doesnt hold

"Secondly, in less than a century, the Federal Reserve has already destroyed 98% of the purchasing power of the U.S. dollar. If not heading to "zero", exactly WHERE would this author have us believe this trend is going?"

Was Yesterday's ISM an Early Warning for More Inflation Down the Road?

what TheSnail is saying - with not a little sarcasm is that when CPI is -1% its maybe a tad early to talk about 'more inflation' down the road. as there is currently no inflation. and one ISM print is not yet evidence that this is about to change

Cash for Clunkers: Here Comes the Hangover

interesesting case study, how govt. intervention can create a floor for prices above where supply and demand would intersect. it benefits some, as it did in the cash for clunkers case, but not without later repercussions.

Is World Poverty Declining?

this is an intersting article. thanks for sharing..

It's the First of the Month

you guys have usually intersting stuff, but this article is as meaningless as one can infer from its title

Recent Market Weakness: The Technical Damage

everyone expects a bounce today.. and it seems to be the logical thing. but lets not forget how extended this rally has been, forcing many bears to stop out positions. now everyone expects a bounce, the longs will sell into it, so will the bears who are now bears without shorts..

my fear is that this moves accelerates in the next 2-3 days and then reverses in the middle of next week temporarily. (from here till sometime in Q2, there will be a bear market - imho)

Why the GDP Number Thursday May Be a Lose/ Lose Situtation

i think what happens to the markets, depends on positioning.. the GDP number release will just mark the time of the day when the action will start.. we can drop on a good number or rally on a bad one.. it all depends on what flows there will be in the market today. and if stocks go up, people will sell the dollar, not because it makes sense, but because thats been the trend and there is hence a pavlovian reflex of selling USD when stocks go up or are expected to go up.

all in all i agree with your general view: stocks + commodities down. bonds + dollar up

Consumer Confidence Is a Lagging Indicator

so when the data started being "less worse" than expected you were cheering that here we are, its a 'V' no doubt

now when data actually starts to get worse than expected you are cheering that here we are, its a 'V' no doubt

your optimism is admirable. unfortunately this business is about thinking, not hoping..

Why I'm Not Worried About the Skittish Markets

if they tighten, its like turning off the life support
if the dollar strengthens, markets will crash, and then confidence - already fragile, and largely a result of the market;s rally - crashes too

Treasury Yields Are a Good Barometer of Economy's Future Prospects

a. i join the above in saying that central bank buying, either in Asia to apr $ reserves or the Fed to push down the curve to make mortgages and corporate funding cheaper, are a big part of the picture

b. seasonally yields go up every summer and then go down into year end. we are still lower than same time last year

c. there are long term concerns on sovereign risk and sutainability.

so a+b+c are hardly a sign of good times to come, rather a sign of malaise

Rising Commodity Prices Continue to Signal Recovery

"I don't know how much of the rise in prices is due to easy money, but if I had to guess I would say about one third, with two-thirds being due to an ongoing strengthening of the global economy."

yes. but the on-going strengthening of the global economy is 100% due to easy money and fiscul stimulus.

so if they tighten its all over again.

and rise in commodity prices has a lot (2/3 my guess) to do with weak dollar.

so your arguments hear sound hollow and more wishful thinking than substance. as usual

"Stretching the Tape"

hi

sorry. my mistake USDSEK. it was a typo. USDSEK's low this year was on Sep 22: 6.80 even if you bought it there its up now 2%. thats far from stellar in the FX world.

i dont question your call, never did. you should continue updating twitter for a bit more. it would help set your track record straight once the downfall starts to happen. i would consider subscribing (i work on a bank's prop desk, and have a small budget for 3rd party research)

lot of models dont work right now. maybe there is indeed some covert intervention in futures to support the mkt.