Dollar will appreciate further … rtage.html

None of this makes any sense.

How can a currency that (has been?) is about to be printed to oblivion be strengthening in value?

Another market manipulation by the yankee pirates, (DotCon, Oil, Property, derivatives, bailouts, quantitive easing) I suspect.

Because hyper-inflation is not about to happen? Because everywhere is in the same bind, so relative to each other currencies are going to stay the same?

Would’nt that only be true if quantative easing (what bull) were happening in the Eurozne at the same time or am I missing something?

It’s an issue of confidence as well. And IMHO the USofA is more likely to emerge from the crisis first as it got into the crisis first. That is unles Barack Youknowwho Obama decides to really become more like FDR in which case the US is most likely not to emerge from the crisis first which is exactly what happened when FDR was fiddling with the economy until WW2 bailed him out.

I think the view is that quantative easing (in the form of new money for old) is going to have to happen everywhere. As far as I can see, a lot of what was considered money is being destroyed (bad debts). Some of this was due to revaluing assets to make more money out of them than they are currently worth. That excess will be replaced by new money. But it is likely to happen in a way that doesn’t increase money or credit supply, that is, it is a replacement for money/credit that is already in circulation. My view is that the inflation has already happened - look at M3 for the last ten years…

And I agree with Dom’s point, the relative strength of economies is going to be important. This is the ability of the economies to dig themselves out of the debt hole they are in.

Is that too simplistic a view?

Damn those yankee pirates and their invasion into the BTL market in Navan :angry:
This article has nothing todo with strenghts of economys, it has to do with forex bets that the major banks in europe made which they have lost (thats a first, not) and now the have to cover their dollar position.
The fact the dollar will apprceiate makes no sense but the reason why it will appreciate makes perfect sense … if that makes sense. … ck_check=1

Deleveraging lifts dollar to fresh highs

Funny, I was thinking of locking my mortgages for 10 years come autumn. This puts a new angle on the issue.

Ah, but I’m no economist; strictly amateur musings - still the experts don’t seem to be able to agree on what has happened and what will happen. I think the inflation has happened and it will deflate Japanese style; many, many others disagree and think that we will see deflation for a few years and inflation after that - I believe this is the most common view among media pundits, but the bond market isn’t reflecting this…

Welcome to the world of Ambrose Evans-Pritchard.

I still think we are going to see 1.15 or even Parity v Euro this year…

Yes the US current a/c looks horrible and yes they started talking about Quant Easing before everyone else.

However, its becoming very clear that those who were selling the US the goods they craved, that created the imbalances, are getting into even worse shape themselves as that craving suddenly stops.
The collapse in Japan’s GDP is very scary. Germany, France etc may have been initially perceived as safe-havens with alot less consumer debt etc, but now people are realising as auto numbers come out etc that having an industrial based economy may actually leave you in a worse position than a service based economy. Sarkozy may rue the day he slagged off the UK economy for this very reason. In many ways its even harder for an industrial based economy to adjust to the new economic reality than a service based one. The embedded operational leverage in some of these car companies will quickly overwhelm them w/out significant govt aid. If this episode continues for much longer many are going to be completely shut down with significant job losses. France will cut the jobs in Poland first, the jobs in France are next.

Further, as the FT pointed out today, since Lehman all the European banks with US assets, are having to convert short term funding to permanent funding. The only way to do that is to buy the $$ the have been borrowing on a short term basis. This process will continue for along time…lets not forget $ based assets represent a significant proportion of European bank balance sheets.

Dollar going for a walk at the moment.

Up 3% to €1.35

Why would you buy them, the Fed is flying around in helicopters shovelling them out the window :angry:

I realise that none of the pinsters has a crystal ball but does this latest action by the Fed make it more likely the dollar will depreciate further? … refer=home

Bother. That’s quite a lot that’s being pumped in. Mr. Bernanke’s got one of these:

And he’s opened the pod bay door…

While I still think the ECB will resist the temptation for large scale monetisation of bad debt (i.e. the debts will have to be rolled over/paid back), this is becoming more a hope than an expectation. I also think the ECB will have to do something about the strength of the euro - I expect some serious jaw-boning is coming up… what will follow that?

“It did shock the market,” said Jack Iles, a money manager in Boston at MFC Global Investment Management, with $2.5 billion under management. “The Fed is printing money, which translates to general dollar weakness. There’s trillions being funded and committed. It’s a huge dollar negative.” *

Yes … shocked.
I mean who could have seen that coming ? :unamused:

Quote from Jim Rogers. A man with common sense.

Jim Rogers, the successful investor and author, puts it well: “Why are we bailing out Citibank? Why are 300 million Americans having to pay for Citibank’s mistakes? The way the system is supposed to work [is this]: People fail. And then the competent people take over the assets from the failed people, and then you start again with a new, stronger base. What we’re doing this time is . . . taking the assets from the competent people, giving them to the incompetent people, and saying, ‘OK, now you can compete with the competent people.’ So everybody’s weakened: The whole nation is weakened, the whole economy is weakened. That’s not the way it’s supposed to work.”