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...and didn't know that Goldman would be willing to trade for you (for a modest fee).
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Uhhhhh.... Chapter 1 intro:
"The Dollar remains broadly undervalued"
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....
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Then on page 7 "becomes a problem when the dollar is overvalued, as it currently is"
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paesed -
Reminds me of someone from earlier in the week.
His name rhymes with "shit grove"
Also says USD currently undervalued vs Asian majors on pg 5.
Dollar is due for rally, my PM stash has been hedged accordingly.
http://www.zerohedge.com/article/lesson-gold-trading-sideshow-bob#commen...
http://online.wsj.com/article/SB125421124007048627.html
The BOJ may sit idle in the near term, but eventually Asian central banks will be forced in intervene again, but on a larger scale. And the dead cat bounce...
http://www.nicholsoncartoons.com.au/cartoons/new/2009-03-04%20absence%20...
Well those two chapters are also written by two different people and apply two different measures against which the dollar is being used; additionally the time frames are different.
As it stands, fundamentally the dollar is the most undervalued currency that there is when measured against virtually all other currencies given i) it has short term rates at or near zero ii) it continues to decline iii) it remains the reserve currency iv) zero default rate. Basically the decline in value is an indication that interest rates need to be lower in order to facilitate growth domestically hence all the strong dollar rhetoric (check out some of Rubin's old work if you need a basis).
It is more likely that we will see the dollar stagnate for a period of time before rates are raised on the dollar so there is no need to anticipate dollar movements now. I wouldn't expect rates to be raised while the dollar fell in value as that would really have an effect of cancelling out the intention and would signal a dire image of what's to come.
But anyway, you have to have a time frame from which to base the decision that the dollar is undervalued and you need to understand the mechanism against which it's being applied. Carry trades are very different from correlated FX trades; comparing chp 1 and chp 7 isn't justified because they're two different trades...
Same chapter and I get the time frame argument.
Rubin's work? Could you please provide a link or the full name? Thanks
Forget to log in Phil?
not phil; I'm John
"short term rates at or near zero" are a function of the FED's tremendous creation of liquidity. I dunno if the dollar is undervalued because the FED is making lots more of them, I think that's why the dollar is falling.
That there is no nominal risk of default semantic. That the US can print enough to pay off its debts is the why many argue the reserve currency status is in jeopardy.
Modest INDEED. A VERY impressive score, Tyler. You have outdone yourself once again!
I had a suburban housewife who recently sold her house -- and she has not yet found a new house to buy -- and she asked me which foreign currency she should put it all in before she starts looking for a house.
I think the dollar is green T.P. too. BUT -just thinking out loud here - maybe there's an 'other' side of this dollar-plunge-trade brewing up. Regarding phaesed's comment above, maybe the "Masters of their Universe" at Goldman are onto something.
This document is complete and total nonsense. It's about as far removed from reality as it is possible to get.
Anyone paying GS for this stuff is really a fool.
Nobody pays for it, because if you trade 10,000 shares a day; it's free forever (thanks SL&Kellogg). Plus, they're betting against you the whole time (the best feeling is when GS drops to the point where they get margin calls). "Point at a deer and call it a horse" - Goldy Sachs Ni Hao
Where's the part that states:
The best part is, if we are wrong, Uncle Sam will lend us all the money we need to make it right, so you're basically stupid to fight us.
{Sound of Music}
When the flu hits / when the stocks crash / when we bomb Iran.... I simply remember the multiple things that can make dollar bears so sad.
+1
Who in bloody hell has the time to read that sh*t?
What a pompus buch of overpaid w*nkers they are over
at Goldman Sachs !!
ahh..my former colleagues at the mighty GS still producing bullshit reports like this. What a bunch of cocks...
Risk currencies like AUD/JPY will tumble on a dollar pullback/safe haven run. These markets don't really care much for underlying fundamentals.
LB, LB, LB...
pay off the fdic stuff. you.are.a.hypocrite.