Tuesday, November 10, 2009
DOLLAR RALLY?
HMM...Here is an interesting subject. My analysis is that the dollar will not rally. Here's why: first of all the dollar is in a downtrend (trend is your friend), secondly the fundalmentals are horrible....with the us and china in trade wars that only spells trouble for the dollar. The US in particular is increasingly becoming a protectist society. Does it make sense to slap tarriffs on imported products just because they are more competitive than the ones you export?? Smells like protectionism to me. So whats the solution? Mr Bernanke and Mr Geithner would have you believe that we need to weaken our currency to become more competitive. So that is exactly what they are doing, keeping interest rates low and printing money. With the chinese trade war I supect the treasury auctions will be very weak in the coming months and the need for printing more money will absolutly necessary to fund the future stimulas packages that will be coming down the pipe in 2010. So my synopsis is no rally in the dollar and a slow gradual daily decline thru june 2010 until the dollar index hits 50 or so then maybe a 10% retracement. There you have it!
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