Don't get sucked in by dollar strength | Page 4 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

Don't do what Donny Don't does 52 replies

Today's news - I don't get it! 35 replies

I don't get it, it is just not right 22 replies

Ok I don't get it please help 73 replies

Ok I don't get it!! 4 replies

Attachments: Don't get sucked in by dollar strength
Exit Attachments

Don't get sucked in by dollar strength

  • #61
  • Feb 28, 2009 10:32am Feb 28, 2009 10:32am
Quoting tonyb1911
I thought everyone knew that the dollar was in an "artificial" rally due to the problems in the equities markets. Everyone knows or should know that when people move to "cash" and take their money out the market they put it it in things like treasury notes which require USD. Thus the dollar does great when the economy is doing bad.

Once the market comes back and the european countries get back on their feet the dollar will fall again. The key is when.

Bubbles never inflate again. The EUR nd NZD went parabolic toward the end... there is nothing to that says that .7 isn't fair value on the E/U right now.
  • #62
  • Edited 11:03am Feb 28, 2009 10:36am | Edited 11:03am
fxterrapin

Quoting fxterrapin
But in this case we have a 25 year credit bubble imploding.
You are forgetting something, the reason that makes prices STAY down after the collapse is the contraction of the available money. Well it did, but guess what... the world is fighting by all means to combat the exact crunch that is supossed to happen to balance things...

So you see, after this mess... the same money that propped up prices to that levels, is still there. Simple because you believe that people will now start to behave like angels and do the right thing... hm... i don't think thats enough to be safe.


Quoting fxterrapin
This you got from Jim Rogers. Who says that demand will grow?
I must say im glad to listen to guys like Jim Rogers and have the ability to understand them. Also if you want, i can show you my student cards from Economics. Right now i don't need no one to have my own visions, but i'm not blind, and i'm glad to be able to learn a little more with guys that ruled for decades, and predicted many things in the past. In college we only learn to measure and predict. We don't learn much about how things are actually going, like commodities supply and demand. Its good to fill that blanks.

Now.. The reasons why demand will grow, are the exactly same reasons that were present before and are still there.

Reason number one, there are parts of the world with low standards of living the are working at max to improve and live better. If you have a society as a whole that is working and sacrificing to live a better life, i think they eventually achieve that.

You might think that they are stupid and will never succeed, but thats another story...

Another thing that you probably forgot when you wrote this, was the population increase. Here is a reminder for you... Population grows at a pace of 2 persons for Second! (Already counting the dying people)

Do the math.. lol. Demand growth might decrease for decades, but i suspect that will come from a war or natural disaster... not a credit crisis...

Credit can eventually be forgiven, if we deal with humanitarian problems. But wars and natural disasters are dificult to stop.

Quoting fxterrapin
Money? No. Credit.
Oh, this is a good one. First of all let me clear something for you, Money is Credit. ALL of it. It doesn't matter if you have what you think is Normal money and you neighbour have credit money.

The point is.. IF your neighbour owes money to the bank, you don't have the obligation to pay his debt, BUT, when eventually you spend your "normal" money and some of it ends up in the hand of your neighbour (from his job), as he pays back, you will not get your money back, unless the bank lends again to someone and the money gets in your pocket again.

Got it?

And by the way, the original idea for this distinction is not very good, because it looks like you are saying that credit money does not bid up prices as fast as "normal" money.

Quoting fxterrapin
Never will and never has. Your point?
I thought you believed that rising demand and declining supply, was good to lower prices, now i see that you believe demand will never get back. I guess we are clear on that.

Quoting fxterrapin
It does matter.
No it doesn't. Because, of two main things. One, is because if the money stays only with the big guys and they start to speculate again, its even worse for the average citizen. It doesn't matter if its a temporary inflation, it will create pain again...

Second, eventually the money will end in the people hands again, the problem is that no body knows when, but even if it only happens a decade from now, the problem will be there again. Another boom, another bust. Might not be as big, but it comes from excess of money most of the times.

Quoting fxterrapin
It WILL MOVE? Why? Tell that to the Japanese Banks in the 1990 who just sat on the cash they were given.
Thats a good point, but only for someone that is not paying attention to all factors. The money didn't went to the Japanese people, BUT, what about the carry trades?

Oh yes, The money didn't flow around Japan, but it didn't stoped there. The world took it as a loan and now Japan is the biggest creditor in the world, creating as you know Stock Market and Currency bubbles in many countries.

So, sits there? Right..


Quoting fxterrapin
East europe can grow 100 GDP in the next year? Really? What if they default on their existing loans? Who would
dare loan to them after that? You are quick to point out
U.S. default possibiliy but never mention an East European default on debt.
First of all, read again. I said 100% in 10 or 15 years... not tomorrow.

I think i actually explained this point about eastern europe well, so i don't know whats the doubt. But again..

Eastern Europe has Low Wages combined with high qualified people.
This people come to another countries and learn the language in weeks, and they are hard working, particulary the kids in school.

We never know, but the capital moves to where the prices are lower. It doesn't matter if they default some of it, because considering Economic Law, they have the best potential.
By the way, you might not know, but the reason they have trouble right now, is because they borrowed money in other currencies, and as their own collapsed they have troubles. But now many are oversold. If they rebound the problem gets smaller and as it gets smaller and good news start to come, it compounds and debt gets smaller even faster.

Remember, if the US let the market work and correct the problem, i have no doubt you would be able to pay, unfortunally that the problem. The stimulus plans are not producing plans, are spending and consuming plans. That goods to consume might not come for inside, and the trade deficit widens again.

So, how are you going to pay, if you don't grow, because you don't have competitive prices. At least E. Europe currencies collapsed, so they are even more competitive when this ends.

Quoting fxterrapin
Totally inaccurate. You can boost productivity.
Again, thats the problem... and i guess thats what you didn't realized yet. The idea from the governments and Central Banks, is that we should lend as much as we can to citizens, to keep consuming.

So, that boost of productivity you are talking about, that we all read in books and its a product of the Free Market, is likely to not happen, as the credit is being forced to normal people and Socialist countries that use it to build worthless briges and roads, to fight the unemployment.




Getting back again to the "money stopped" point. You might say, hey but look also for Chinese and Japanese people, they save 20 or 30 percent, so they block that money.

I say, thats why their are exporters and thats why they are likely to have lower prices. For money to sit tight in America also, that would mean you would become a net exporter too.

The problem is that you are 600 Billion dollars away from it, and Obama wants to keep it that way.


Quoting fxterrapin
Bubbles never inflate again!
Thats a good one!

All of this are pure monetary problems, and you believe that its not going to happen again... (if we continue the same monetary path)

http://theroxylandr.files.wordpress....owgold1900.gif



Remember, when the Oil and Commodities went up in the 70s they were in the middle of the most OIL discoveries in the century.
Thats the big diference... now, what burst was the monetary bubble, but there is no discoveries.

Thats why the next bubble might not take 20 years to appear as we normally see.


tonyb1911

It's soon to know how Europe will come out of this mess. But you have a point. Probably the big guys didn't actually went long on US dollar, they simply closed positions, on many stuff, and now the charts and the technicals have to consolitate and maybe building sideways bases for a long time. I don't think Europe is losing 600 thousands jobs every month and Europe have 2% rates, but technicals are too heavy so, it doesn't matter.

The bubble fxterrapin is talking about that is probable not to happen in the near future, only comes from the fact that ppl look at technicals and they have to build a long term base, however a few years from now that problem is out of the way.

But anyway, in the end the people that produce more and consume less, will get better. Knowing that, i think that Europe will be in better shape 5 years from now. Thanks to Germany anyway. If Germany leaves the pack... i will actually sell all of my Euros and put it in DEM
  • #63
  • Feb 28, 2009 11:50am Feb 28, 2009 11:50am
If you can't discern between credit and money then, there is little chance that we can find common ground. Credit developed independently of the money supply, even though as you said you could consider them one and the same thing.

Then again, perhaps we only disagree on the time frame. who knows. You seem to look at the next 50 years. Frankly this is of little use since several factors can make those prediction irrelevant. I mean come on, you are look at what will happen in Eastern europe in the next 100 years? That where you really lost me.
  • #64
  • Feb 28, 2009 11:54am Feb 28, 2009 11:54am
Here are two quotes that contradict eachother starkly! I think you need to regroup and put together your thoughts in a more organized manner before responding.

So how do you know which ones are technical and which ones aren't?

1) "Bubbles are sometimes purly techincal events."

2) "The bubble fxterrapin is talking about that is probable not to happen in the near future, only comes from the fact that ppl look at technicals and they have to build a long term base, however a few years from now that problem is out of the way."

"this problem is out of the way"? May I borrow your crystal ball, please?
  • #65
  • Edited 5:49pm Feb 28, 2009 3:47pm | Edited 5:49pm
Quoting fxterrapin
If you can't discern between credit and money, then, there is little chance that we can find common ground. Credit developed independently of the money supply.
So, in your view, credit is a product of our imagination. We can create credit at will, just by thinking about it and put it on a loan contract.

It also can be used to buy things and pay Wages, but hey its just imagination so it doesn't really count as money inside the economy.

In conclusion, both Bid up prices, but one is real and the other is a dream.

hhmmm.... I think i'm going to stay with my view if you don't mind. Thanks anyway.


Quoting fxterrapin
Then again, perhaps we only disagree on the time frame. who knows. You seem to look at the next 50 years.
Yeah lol, i look also billions of years from now, when the Sun will shut down.

Look, i talk about outcomes considering the same path continues, and for now, there isn't any reason to believe that a different path is developing.

Your only hope is that somehow, a new genius appears in the US and create a new super technology. Unfortunately, i don't deal with ODDs i deal with whats in place for now. If the monetary policy changes and if the government goes back to Capitalism, then i calculate a new outcome.

I think you are the one that is expecting a stroke of luck.

Quoting fxterrapin
Here are two quotes that contradict eachother...
The two quotes are saying the same thing... Bubbles are technical in nature.

Bubbles only apear to be bubbles considering the range of price in the previous years.

Here is a simple UpTrend:
http://img10.imageshack.us/img10/8493/10330584.jpg

Ho... but wait a minute... RUUUNN !!!

http://img10.imageshack.us/img10/3314/bub.jpg

It was just a matter of chart wideness.... Same place in time... Same price.... Different Interpretation
Here's a good reason to analyse a few years ahead.

The bubble might burst only thanks to the fear of price, because people eventually realized what was happening on a long term prespective.

Some bubbles (and bursts) can be more "backed up" from fundamentals, some might be as empty as the Nasdaq Bubble...

For example, the commodities bubble was created because many people though that countries like China were about to acelerate even more the world comsuption. That assumption was wrong but only for the fact that it was too soon, maybe just a few years.

The real state and nasdaq bubble are just a get rich fast mania with absolutly nothing rational and sustainable in the horizont.

Quoting fxterrapin
...this problem is out of the way"? May I borrow your crystal ball, please?
My crystall ball, tells me that sometimes you don't pay attention.

When i say, "the problem is out of the way" i mean the momentum in the charts. Momentum is very important... and can eclipse the logical macro economic future ahead.

However, as time passes and the majority of the traders start to see a clean chart again, everything can happen.

A new bubble might not be as bigger as the last one... but it might be painful again.
  • #66
  • Feb 28, 2009 3:56pm Feb 28, 2009 3:56pm
Quoting DownRiverTrader
I think the dollar play is wearing very thin personally. Look at a long term chart and you will see a secular downtrend in the dollar, no one can argue this. We are printing dollars like there is no tomorrow. Consider the facts of supply and demand. And what if oil doesn't stay in the $30-40 range???
interesting discussion here
you may be right but looking at that chart... if it was 1min chart i would try to scalp it long with tp 100-110 (ready to close if it should move against me of course..)

I don't trade longterm and fundamental analysis is like oracle to me. I take charts as fractals and i don't see much difference in any timeframe

Personaly i think eurusd will go much lower but i am confused about fundamental reasons which should lead it to run towards parity.. with all those spending plans, bailouts and all that gloomy economic news..
umm... oracle

I fact i don't care much where it is headed as i am trading short term

anyone here who remembers economic situation in early eihties? what caused dollar index rally back then?
  • #67
  • Feb 28, 2009 5:40pm Feb 28, 2009 5:40pm
Quoting >Apocalypto<
that's the call of a loser if I ever heard one
Considering I live in a waterfront home at Noosa (down the way from Mr. Virgin Blue Sir Richard), I ain't doing too bad for myself. Check the real estate for this area, right next to Hastings street.

Quoting >Apocalypto<
I see you are another aussie dollar bear....
Assume anything and you'll only make an ASS out of U and ME. This is personal preference for business reasons, not my prediction or technical viewpoint. I certainly am not loading up on shorts because of personal preference


Quoting >Apocalypto<
do u know how good this week has been for me on the 1 hour shorting the euro???
Here we go with the dick measuring again.... I've spent most of my week fishing, not staring at 1hr charts all day.

Quoting >Apocalypto<
I don't help simple minded people that only see one way.... I was the biggest euro bull till 08 then I changed, can u?
Sure, my short/medium-term bull bias changed in July 08 on the Euro. If I remember correctly, I called my short in the EU thread at the time. My longer term bias will change when the secular trend ACTUALLY ends.

Quoting >Apocalypto<
dollar bears.... I want you to think about the situation we're in. Not what u read in reports like all the other dollar bears... think about the world and why the dollar is going up.
Don't need to think or read reports, I just need to look at the price action on the charts.

Quoting >Apocalypto<
DO U SEE VALUE IN THE EURO??
Don't care about hearsay value, I'll trade the value on my charts.

Quoting >Apocalypto<
go make some pips charger.
Sure will, while I'm sitting on Fraser Island fishing my little heart out
  • #68
  • Feb 28, 2009 5:42pm Feb 28, 2009 5:42pm
Being a FF member for about 2 years now I believe I can safely say most here are short term 'traders'.

Some are very short term, as is here today and gone (blown acct) tomorrow.

Doesn't mean longer term calls are not of value. But I am of the opinion that what the charts are doing is more important than what the news is telling us.

Another way of saying it is until there is confirmation the dollar is weakening, again, and crude going higher (slightly this past week) and gold crashing back up through $1000 I think it is premature to write off the greenback.

I also believe in a counter-balancing way the collapsing economies and debt written off consumes a lot of the money being printed. Therefore inflation might be kept in check which should mean commodities prices contained and gold with it. At the same time the dollar benefiting by risk aversion will continue for the foreseeable future.

Don't forgot those stops!!!
  • #69
  • Edited 7:04pm Feb 28, 2009 6:49pm | Edited 7:04pm
Quote
Considering I live in a waterfront home at Noosa (down the way from Mr. Virgin Blue Sir Richard), I ain't doing too bad for myself. Check the real estate for this area, right next to Hastings street.
The point of telling that to us is?

Quote
Assume anything and you'll only make an ASS out of U and ME. This is personal preference for business reasons, not my prediction or technical viewpoint. I certainly am not loading up on shorts because of personal preference
well said, agree.....


Quote
Here we go with the dick measuring again.... I've spent most of my week fishing, not staring at 1hr charts all day.
Dick measuring? sounds like a Queenslander drinking game!


Quote
Sure, my short/medium-term bull bias changed in July 08 on the Euro. If I remember correctly, I called my short in the EU thread at the time. My longer term bias will change when the secular trend ACTUALLY ends
I doubt it did. dig up the post you made I would love to read it.


Quote
Don't need to think or read reports, I just need to look at the price action on the charts.
Even better to hear



Quote
Don't care about hearsay value, I'll trade the value on my charts.
o really so do you know what a chart actually represents? and what makes it up?


Quote
Sure will, while I'm sitting on Fraser Island fishing my little heart out
good on u! I will think about that while I have my coffee on Chapel st tomorrow morning


I am a little confused at your reply as you have twisted your stance up abit. on one hand you claim to have no care of any direction but you make a post that you think the USD will go down.

Lets keep this on topic hey as I think we're both going off track and degrading the thread.

I think we should move our little differences to PM

cheers
  • #70
  • Edited 7:30pm Feb 28, 2009 7:03pm | Edited 7:30pm
Quoting SunTrader
But I am of the opinion that what the charts are doing is more important than what the news is telling us.
I agree with you, no question about it, and i already said in this thread that i don't have a position in Eur/Usd.
I trust the Weekly Chart, and thats why i bought USD/JPY at 91.80, because the chart said so..

However.. when i have doubts mainly about exiting, knowing the macro economic future might be the deciding point that makes you get out of the trade with profit and not wait for an unexpected engulfing candle or bar that eats up a big chunk.

Quoting SunTrader
I also believe in a counter-balancing way the collapsing economies and debt written off consumes a lot of the money being printed.
If things are being written off, is because they are overvalued, so we should not create money to maintain the price.

If the money creation equals the write offs, the economy might not have inflation, but as prices are not in equilibrium levels, the economy will have low growth for as long as the prices don't get to healthy levels again.

But, here is a catch, the governments don't want asset prices to stay equal, they actually want them to rise despite the market don't agree.

And remember, the median house prices rose 7.5% year, and in some places 10 or 20% year... for 10 years

The reason why inflation stayed 2 or 3 percent for the last decade was exactly because the money was absorbed to buy houses.

But now two things can happen. The money returns to houses again, the bubble reinflates and collapses again (unlikely) or the money is used somewhere else and creates a bubble in other thing, which will create damage again. Its just a matter of time.



Quoting Orion602
Personaly i think eurusd will go much lower but i am confused about fundamental reasons which should lead it to run towards parity
It might happen, but there is no fundamental reason. If it does, more probable is to happen a sharp and unstopabble reversal when speculative money gets out.


Allow me to explain:

The EU is a Net Exporter to the US, and what this means is that in the present time Europe is able to produce cheaper products, or else, there would be no reason for the US to buy.

As the US buy more products, they convert dollars to Euros making the USD depreciate.

Every day, every month, every year. This is the structural base, there is a certain amount of dollars that are being converted to euros on a constant base.

What this means is that, every move contrarian to this, is speculative money, and when it gets out, the only thing left is the strutural.

However when the spectulative capital happens to go with the strutural base, new records are made and thats why in the end fundamentals prevail.



Let me give you an example.

Imagine that Europe makes cellphones that cost 30 euros, and the US makes cellphones that cost 50 dollars.

Now imagine that the Eur/Usd is at 1.2 at that point.

This means that, the US can actually buy cellphones for 36 dollars (30x1.2), instead of 50, so they import.

The EU doesn't have a reason to import, as they would have to pay 41 euros (50/1.2), instead of their own 30.

As US import they will create a stream of Euro buying that eventually will apreciate the Euro to a point where its too expensive to buy Europe cellphones, this would be for example around Euro/Usd 1.7


If the opposite happens, and the Euro/Usd goes to 1.0000,

Europe would be able to sell even more and still buy cheap internally which means that Europe would grow more and more, as US would lose more and more wealth and expererience higher and higher unemployment as companies close and go to a more competitive places to export things.

So if the Euro goes to 1 now thanks to speculative capital, its the garantee that 5 years from now it will be at 2.0000 at least...
  • #71
  • Feb 28, 2009 7:09pm Feb 28, 2009 7:09pm
Quoting Speculator
I agree with you, no question about it, and i already said in this thread that i don't have a position in Eur/Usd.
I trust the Weekly Chart, and thats why i bought USD/JPY at 91.80, because the chart said so..

However.. when i have doubts mainly about exiting, knowing the macro economic future might be the deciding point that makes you get out of the trade with profit and not wait for an unexpected engulfing candle or bar that eats up a big chunk.



If things are being written off, is because they are overvalued, so we should not create...
excelent post
  • #72
  • Feb 28, 2009 7:50pm Feb 28, 2009 7:50pm
Quoting Speculator

It might happen, but there is no fundamental reason. If it does, more probable is to happen a sharp and unstopabble reversal when speculative money gets out.


Allow me to explain:..............
Try this:

July 15th, 2007 Euro at 1.6038
Feb 27th, 2009 Euro at 1.2666

And what happened in between these 2 dates. Total world financial turmoil. So the explanation for EU taking a beating like a red-headed step-child is risk aversion.

Right, you with me so far. Now why is that going to change? It will change at some point but why now or why in the foreseeable future??????


Quoting Speculator

So if the Euro goes to 1 now thanks to speculative capital, its the garantee that 5 years from now it will be at 2.0000 at least...
Should of quit while you were ahead.

If it goes to 2.00 first does that mean it then goes down to 1.00. Pure speculation Speculator to say what will happen 5 years from now guaranted .
  • #73
  • Feb 28, 2009 7:54pm Feb 28, 2009 7:54pm
Quoting >Apocalypto<
The point of telling that to us is?
Who threw the loser call? Assumptions, assumptions, and well you know


Quoting >Apocalypto<
Dick measuring? sounds like a Queenslander drinking game!
Here we go with the assumptions again Not a born and bred QLD'er BTW...


Quoting >Apocalypto<
I doubt it did. dig up the post you made I would love to read it.
Oh it's there, don't you worry. Don't have the time to dig it up. Search for it yourself if you have nothing better to do.

Quoting >Apocalypto<
o really so do you know what a chart actually represents? and what makes it up?
The collective actions of buyers and sellers exchanging one currency to another.

Quoting >Apocalypto<
good on u! I will think about that while I have my coffee on Chapel st tomorrow morning
If that's the Melbourne Chapel St, it's close to the arse end of the earth.

Quoting >Apocalypto<
I am a little confused at your reply as you have twisted your stance up abit. on one hand you claim to have no care of any direction but you make a post that you think the USD will go down.
No wonder you're confused!!!!

I never said that I think or predict or wish it will go down. My point has always been that the secular trend is still down... I am not the one bottom picking like you said. Who's being the bottom picker here by saying the secular trend is over? Sure it may be about to end, it may not either. I prefer to wait until the chart indicates it is over.

Quoting >Apocalypto<
Lets keep this on topic hey as I think we're both going off track and degrading the thread.
As I see it, you were never on track in the first place.
  • #74
  • Feb 28, 2009 8:00pm Feb 28, 2009 8:00pm
Quoting NuckingFuts
Who threw the loser call? Assumptions, assumptions, and well you know




Here we go with the assumptions again Not a born and bred QLD'er BTW...




Oh it's there, don't you worry. Don't have the time to dig it up. Search for it yourself if you have nothing better to do.



The collective actions of buyers and sellers exchanging one currency to another.



If that's the Melbourne Chapel St, it's close to the arse end of the earth.



No wonder you're confused!!!!

I never said that I think or predict or wish...
you can have this if it's that important to u.

again, I got no time for u. speaking to people like you actually dose more damage then good.

go make some pips charger
  • #75
  • Feb 28, 2009 8:53pm Feb 28, 2009 8:53pm
Quoting DownRiverTrader
I am positioning for the dollar to begin weakening again. Sure it is not what you are reading on the right side of the board here with all the stories but that is exactly the point. Ask yourself a simple question, "Why am I buying the dollar?" It has been a story of..."Well armageddon and the dollar is the best of the worst"

I think the dollar play is wearing very thin personally. Look at a long term chart and you will see a secular downtrend in the dollar, no one can argue this. We are printing dollars like there is no tomorrow. Consider...

EURUSD... parity this year or early next.

m
  • #76
  • Feb 28, 2009 9:24pm Feb 28, 2009 9:24pm
Quoting acumen
EURUSD... parity this year or early next.

m
I agree.
  • #77
  • Feb 28, 2009 9:28pm Feb 28, 2009 9:28pm
Quoting Speculator
So, in your view, credit is a product of our imagination. We can create credit at will, just by thinking about it and put it on a loan contract.

It also can be used to buy things and pay Wages, but hey its just imagination so it doesn't really count as money inside the economy.

In conclusion, both Bid up prices, but one is real and the other is a dream.

hhmmm.... I think i'm going to stay with my view if you don't mind. Thanks anyway.




Yeah lol, i look also billions of years from now, when the Sun will shut down.

Look,...
People find amazing ways to justify bubbles...
In short, you are saying that this time it's different, so did this guy:

http://i42.tinypic.com/28kha55.jpg
  • #78
  • Edited 9:50pm Feb 28, 2009 9:33pm | Edited 9:50pm
Quoting SunTrader
Now why is that going to change? It will change at some point but why now or why in the foreseeable future??????
I didn't said anything about "now". I don't know whats the exact point of that "foreseeable future", but let me explain again.

The run to safety caused many people to return to bonds, and when you hold a treasury bond, you Hope that the rate of the bond pays you above the rate of inflation until the date of maturity.

When foreigners buy bonds they prop up the dollar, and even in this past years that is well known that many countries were buying US bonds and loaning 2 billion per day to america. ... even converting so much money to dollars, the overall forex market was forcing the dollar down.

The problem is, the bond rates are so low that is behond comprehension that someone would hold this bonds for years, and receive interest below or equal to inflation, which means 0 return on a decade or 30 year bond investment.

When people come to that conclusion, they will get out, and the dollar gets hurt.
It might be irrelevant for us, but i just think is good to know in advance. It might not benefit our trade, but at least we feel that we are far from the clueless crowd.

Remember, the only way for the dollar to keep rising and rising if for foreigners to keep loaning more and more and never expect nothing in return.
They don't even need to cash out, they simply cannot continue to lend money forever.

My guess is that the world is really expecting that the US come up with a new gadget, to boost productivity or lower energy comsuption, the problem is that, hope might not last to eternity.


Quoting SunTrader
If it goes to 2.00 first does that mean it then goes down to 1.00?
No...

There is a point where the price is at equilibrium, and where neither Europe or US lose wealth trading with each other. IF the 2.000 mark was closer to that equilibrium, after reaching that, the long term bets are off, and we consider only volatile fundamentals like government policies in the short term.

But again, if Eur/Usd goes to parity its just impossible to stay there for long. The market sometimes ignores the news coming and out do the opposite, but there is a limit, i don't know any market that would ignore horrific news for several months, coming out just from one place.

Quoting SunTrader
Pure speculation Speculator to say what will happen 5 years from now guaranted
Look, there are a lot of guys that predicted this crisis a long time ago. I hope you don't believe that this guys were lucky just betting at random.

Everyone that knew the dates the Ajustable Rate Mortgages would reset to double, knew it would made the bubble collapse, because people would not be able to afford it. This was no rocket science.

As you know, the foundation for this crisis started in 2002 with the 1% rates for 3 years in a row and the bubble popped in 2006.

If you think that guys like Jim Rogers made billions in his entire career with luck, well thats an opinion.

Maybe i'm not good enought to make a 5 year prediction (about overall direction), but is possible and it is proven.
  • #79
  • Feb 28, 2009 9:34pm Feb 28, 2009 9:34pm
Quoting Speculator
So, in your view, credit is a product of our imagination. We can create credit at will, just by thinking about it and put it on a loan contract.
Never said that. Please refrain from putting words in my mouth.

Ever heard about fractional reserve banking? Credit and money are NOT the same. There has to be a 'first lender' who didn't borrow in order to get the credit chain going, otherwise you'd be begging the question. This implies that there is a base that is not itself derived from credit. This is called the monetary base. Credit is a derivative of money through leverage. That leverage is being retracted now. Simple enough?
Ok, enough Econ 101.


Quote

Unfortunately, i don't deal with ODDs i deal with whats in place for now.

A moment ago you were dealing with what will happen in the next 100 years.

Quote
The two quotes are saying the same thing... Bubbles are technical in nature.

No they don't. In addition to Econ 101, I'm giving out free English 101 lessons.
  • #80
  • Feb 28, 2009 9:39pm Feb 28, 2009 9:39pm
Quoting Speculator

When people come to that conclusion, they will get out, and the dollar gets hurt.
It might be irrelevant for us, but i just think is good to know in advance. It might not benefit our trade, but at least we feel that we are far from the clueless crowd.

Remember, the only way for the dollar to keep rising and rising if for foreigners to keep loaning more and more and never expect nothing in return.
They don't even need to cash out, they simply cannot continue to lend money forever.
You are assuming that investors will find higher yielding gov't bonds elsewhere. Let's wait until CBs cut all they need to and then decide.



Quote
My guess is that the world is really expecting that the US come up with a new gadget, to boost productivity or lower energy comsuption, the problem is that, hope might not last to eternity.

You don't need a new gadget. How about good old manual labor?


Quote
If you think that guys like Jim Rogers made billions in his entire career with luck, well thats an opinion.

No, he did it by being as corrupt as the next Gecko Gordon
0 traders viewing now