Yes, but it's not gonna be on a straight line. Right now there are way too many dollar bears. Quite a one sided trade. Perfect setup for intervention, then further collapse. Look at Euro and Swissy swan dive just now How many pips was that! Should be a nice opportunity to "diversify" away from the dollar in a few moments. Bernanke's exit strategy is laughable. It will still end up in devalued dollar, imho. Long term, dollar is still way overvalued. Just like poundsterling a long time ago. When the average joes find out, it will already be too late to get out from the US dollar. In 3 ... 2... 1 Prechter's "dollar bottoming" article coming up soon.
Bernanke Fed is out of ammo, although they would have you believe otherwise. Eventually jawboning will be ineffective as investors are waking up to the horror unfolding.
Bernanke is not out of ammo yet. He's got a variety of tools. Fundamental does not support dollar at the current level. But the noise is getting louder, especially with people like Jim Rogers, Peter Schiff, Soros, etc on TV saying things about the dollar. When you have too many people on one side, they'll tip it over. They will jawbone it and you can bet they will be successful, even if it's only temporary. This is necessary to prevent "Argentina"-like inorderly devaluation. When the US Dollar permabulls come out of hiding, that will be the chance to get out of the US Dollar And oh .. forget about those paper gold/silver ETF. In fact, that's one of Fed's tools. Better get some physical gold.
First of all, congrats to everyone who made money from this call Secondly, *be careful*, you are near a point where co-ordinated intervention can jam your trade. Leverage can kill. My long term view is that the math just doesn't make sense. The dollar needs to be devalued 50% further from where we are today. The fact is the US budget deficit is unsustainable. Just remember, Poundsterling was $4.85 and today it is only $1.66. There have been many bottom calls in between. I hope that EW's subscribers, who listened to Prechter's US dollar bottom call, haven't filed bankruptcy yet.
Why do you say to forget GLD and SLV? How is that one of the Fed's tools? I agree with owning some physical gold and silver, but gold stocks and gold/silver ETFs seem like a good way to diversify in the precious metals sector.
FYI, hyperinflation in Weimar happened after a brief period of deflation. The math just doesn't work and it's a ponzi scheme. It's like paying your credit card bill with your second credit card. So far, Japan. Arabs, and China will still buy treasury bond or else what they have will decline drastically in value. How long can they keep saying it's going to be okay to *prevent disorderly collapse* ? The next 5-10 years will be one of the most interesting time we'll ever see. http://www.theage.com.au/national/joyce-warns-of-bigger-gfc-20091022-hbg6.html Joyce warns of bigger GFC MARK DAVIS October 23, 2009 THE Nationals Senate leader Barnaby Joyce is openly canvassing an economic upheaval that would dwarf the current global financial crisis, triggered by the US defaulting on its sovereign debt within the next few years. In unusually pessimistic comments for a senior political figure, Senator Joyce said the US Government was running such large deficits and building up so much debt that it was in a similar position to Iceland or Germany before World War II. In a Senate estimates hearing on Wednesday night, he asked Treasury secretary Ken Henry what would be the implications of an American debt default for the Australian economy. Dr Henry warned that canvassing extreme scenarios could alarm the community. ''I don't mind discussing hypotheticals in general ⦠[but] one has to be careful not to discuss publicly hypotheticals that are that extreme,'' Dr Henry said. ''I don't, myself, consider that outcome to be a high probability outcome, certainly not one that I would want to say much about in a public forum.'' But Senator Joyce insisted yesterday that the dangers to the global economy from the run-up in US private and public sector debt were real and should be debated. ''It is the elephant in the room,'' Senator Joyce told The Age. ''This is a huge risk that Australia faces. What is the game plan, what happens if it comes unstuck? ''Far from turning around the [George] Bush legacy of deficits and debt, [US president Barack] Obama has made it worse. It has got all the hallmarks of a financial collapse about to happen in America.'' Senator Joyce said investor concerns about the American Government's ability to fund its deficits were already undermining the role of the US dollar in the international trading and financial system. ''The US dollar is almost becoming like junk bonds,'' he said.
Optiontrad3r, you are wrong! I saw an interview with Geithner and Bernanke , and they said that they "Support a strong dollar"!! see, problem solved!! look, the dollar is already improving, it is 1.3 euro... no, wait 1.4.... geez 1.5 ??? Hang on, there must be something wrong with my screen.
This is it, guys Posted on Oct 23 just before the dollar rallied. In my opinion, gold will soon exceed the all time high that was set before. It could dip to $950, however. $600 billion military spending, extension of home buyer tax credit, healthcare bill, 99 weeks of unemployment benefits. More money printing on the way. Minimum target is $1350. Good luck.
great post. It is inevitable that US gov will keep spending the same if not MORE now with this bailout mentality to save the country. Airlines soon again?...Your right on about the fact they won't make significant budget cuts while continuing to print into death deficits. This ain't post WWII era. No way we finance this scenario without default imo. There was a housing EXPANSION in the 1950s forward when we were in big debt.
They simply just won't stop printing like mad, beyond normal. Yes, it's true that the money are just sitting at the bank's vault and hasn't exactly reached the economy yet. Some are being used to prop up stock prices and carry trade. But it will make it to the economy for sure. Once the fractional process begins, then .... [insert your own imagination] You might wanna stock up some can food before they become more expensive.