david02360

Brown Brothers on Dollar Weakness, Alternative Currency Basket Reports and RBA Rate Hike

The USA is going through the same situation that the UK went through in the 70s. Huge debt, over extended military and the need to exit an empire. The solutions are the same, devalue the currency, lower the standard of living, pull back the military and let the world look after itself. It took the UK 15 years to recover and it will probably take the US the same or more given the politics in Washington.

Why the Dollar Has Rallied During Current Crisis

The reason for the dollars rise was the panic selling of foreign assets by hedge funds to meet losses in the USA and Mutual funds meeting redemptions. The world had borrowed the Japanese yen and the US dollar to buy the foreign assets. It is no coincidence that the Yen now is stronger than the dollar. The question is what next. My guess is that the dollar starts to weaken again but not to 1.6 to the Euro. although the massive borrowing that has taken place and is yet to come will have consequences which cannot be predicted

Historic Strength for the Dollar

I was recently charged $270 for an overnight short dollar long Euro contract. Normally I receive cash based for this contract. The Fed has lost control over interest rates to such an extent that real dollar rates are higher than European rates. Hence the strength in the dollar. Add that to all the distressed Hedge Funds and Banks needing dollars it is no surprise that it has gained. When will it end, only when the central banks regain control.