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Dollar Up, Gold Down ...
I have previously predicted
that the dollar would rally at some point in the short-term, and that
the dollar's rise would be correlated with a correction in gold.
Today, the dollar index rose from around 74.7 to 75.934:
And gold plunged about 4%:
However, the Dow was up 23 today.
Does that mean that the inverse correlation between the dollar and Dow was broken? One day does not destroy a trend ... it is simply too early to tell.
Check out Chopshop's must-see Comex charts.
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We will make new equity lows according to my charts and my USD indicator has been giving BULLISH warnings for several months and am still expecting a dollar rally.
My indicators can identify trend changes before they occur.
They warned me of an impending market crash back in early *2007*
http://www.zerohedge.com/forum/market-outlook-0
Does this clown have naked pics of team TD doing some sort of satanic snuff film, sacrificing a new-born with a Timmy mask?
WTF? The one and only spammer on ZH despoiling every thread- lose this asshole.
"My magic indicators can make you piles of money but I'm too dense just to quietly make mountains of cash for myself with my infallible algorithm that I am selling to you for pennies."
Plus there's this Nigerian prince who just needs a few grand to help him smuggle a few containers of gold to you.
He got a blanket party on another thread.
ROFL. Please leave the satanic snuff film to the pros, will you?
This being said...
1) I call bullsh*t on the "my indicators told me in advance...": no one can predict the future. I'll repeat that for the hard of hearing: no one can predict the future. Trying to predict the future based only on technical indicators is the modern equivalent of the oracles of Rome, reading the future in the entrails of a chicken.
2) If you stop and think about it, it could happen like "GrandSuperCycle" predicted. All it would take is another sovereign default like Dubai, and another round of panc USD$ buying.
On the other hand, another US$ climb, another GLD slide would only mean one thing: buy GLD and other PM, since, no matter what the USGov does, I believe the only way out of this crisis is through a (very) serious event. And the only possibilities are: inflation, debasement, default. Or even all three, probably in that order.
Let's face it: the glory days of the USA are over. Any rise in the US$ is just rear-guard action, and will only slightly delay the inevitable.
The dollar may rally until the new year-or at least base out at 75. Now for edification sake, the DXY is no where near it's low of 2007-2008. Thats the hyperinflation everyone is freaking out about. It already happened. Gas=$5 in CA. Oil 130 a barrel. Gold 1031 an ounce. Silver $21 bucks. Rampant borrowing, $5 cappucinos at Starbucks on credit and typical deflationary implosion. Loss of money supply in the trillions. Banks and their unregulated derivatives on the verge of implosion(a 1/4 quadrillion loss of asset value).
We are in the K-Wave winter where inflation begets credit stress and credit implosion. Dollars get scarce(do you and i have access to the free money from Ben?)
Hyperinflation is a ruse for a FED-oriented dilution of the dollar value. BUT, they keep the extension as constant whereas you and I have devalued savings. Hence why gold takes off-it's the money of last resort and exceptionally liquid and fungible in high denominations.
Here's a link. Doometer is moving higher:
http://www.kondratyev.com/reference/theory_explained.htm
Maybe buy gold... maybe not...
SIGNS OF AN END-GAME SHOWDOWN WITH WASHINGTON
http://www.edwardharle.com/news/250_signs_of_an_end_game_showdown_with_washington
Watch that link. It gives linux a fight. It will likely eat your windblows machine.
The link gave my linux machine NO problems and the material was very worthwhile of the hour it took to cover it.
Ya great link. But did this
Dec 6 04:15:11 preventing /bin/cp "setfscreate" access.
Dec 6 04:15:12 preventing /bin/cp "read" access on /var/lib/misc/prelink.full.
Dec 6 04:15:12 preventing /bin/cp "relabelfrom" access on /var/lib/misc/prelink.quick.
Dec 6 04:15:13 preventing /bin/cp "relabelfrom" access on /var/lib/misc/prelink.quick.
Dec 6 04:15:13 preventing /bin/cp "setattr" access on /var/lib/misc/prelink.quick
It went all libby libby libby on my labels labels labels but did not like it like it like on the tables tables tables. Selinux is written by NSA. NSA also has completely open hooks in windows. It's just that with linux theres thousands of eyes on it at all times. Harder to get sillinyess past them.
End of times indeed
Scary sensational shite
Freaks come out at night
"...people race to gold not to hedge against fiat devaluation but because it's the last money standing that does not have an obligation against it." Thank you. That is something I can understand.
The TSX is all over the map in comparison to the DOW now too. I am buying metal on monday
Guys, this was a correction overdue, now brace yourselves for 1350 for gold EASILY by Jan
They can do all they want with f'ing dow and the federal reserve notes, they just CAN'T control gold anymore.
+1 gold is a "safe" buy as long as the printing presses run. And then some.
This dollar move proves out the success of Geitner's strong dollar policy, am I right ? And wouldn't have anything to do with Bernanke's confirmation hearings... Oh no it must've been the *stellar* Nov unemployment numbers...
Bullshit. The Fed manufactured this move either to show what a wonderful job Bernanke is doing (to salvage his bid for another term) or perhaps just to let us know who's in charge.
I'm the Fed's bitch. And so are you.
Harvey... as I scanned the comments on this post I was stunned! All these brilliant (and I mean that sincerely) financial ZH regulars are so blinded by the details... finally, I get to the end and see the truth... so clear, so simple.
"Tim, you work the Japan rumor thing, and we'll drop a zero (hate when that happens) from the job loss number... that'll get Ben off the hot seat... wow, this is just too easy!"
+ 1 agree, total con job as usual.
I think zh should invite two economists to provide two opposing views on the dollar in a scientfic manner.
I think zerohedge has had a couple of mini debates. the opposing view of classic deflationary credit contraction is that fiat money completely and utterly unbased on anything of value has only existed for 40 years or such-and there has been no instance of a deflationary spiral except Japan. Japan being a "special case" in inflationist minds.
Here's a link to Mish Shedlock and a debate with another person. It was civil and very nice to listen to:
http://www.financialsense.com/Experts/2009/Shedlock.html
his rebuttal to the debate points;
http://globaleconomicanalysis.blogspot.com/2009/09/daniel-amerman-vs-mis...
Have at it!
I'm going with Shedlock, prices and credit are still falling.
Dollar is up because fundamentals are improving faster than anticipated and gold is down for the same reason. You will now see a normalization of markets where the USD and stocks rally in tandem.
Ha ha ha ha ha ha ha ha ha ha ha Ha ha ha ha ha ha ha ha ha ha ha Ha ha ha ha ha ha ha ha ha ha ha Ha ha ha ha ha ha ha ha ha ha ha Ha ha ha ha ha ha ha ha ha ha ha Ha ha ha ha ha ha ha ha ha ha ha Ha ha ha ha ha ha ha ha ha ha ha Ha ha ha ha ha ha ha ha ha ha ha Ha ha ha ha ha ha ha ha ha ha ha Ha ha ha ha ha ha ha ha ha ha ha Ha ha ha ha ha ha ha ha ha ha ha Ha ha ha ha ha ha ha ha ha ha ha Ha ha ha ha ha ha ha ha ha ha ha Ha ha ha ha ha ha ha ha ha ha ha Ha ha ha ha ha ha ha ha ha ha ha Ha ha ha ha ha ha ha ha ha ha ha Ha ha ha ha ha ha ha ha ha ha ha Ha ha ha ha ha ha ha ha ha ha ha Ha ha ha ha ha ha ha ha ha ha ha Ha ha ha ha ha ha ha ha ha ha ha Ha ha ha ha ha ha ha ha ha ha ha Ha ha ha ha ha ha ha ha ha ha ha!
Leo, you're a funny fucking guy! Shit is getting better TOO FAST! Ohnoes!
Enter here the old problem of definition of terms: What are "fundamentals"? My definition may vary from yours. I'll bet yours are all based in reported economic data. Mine will be more based in sentiment and outlook. Taking a broader view in defining fundamentals, we will both be wrong in the long run. It's the outlier that will do us both in.
Normalization? For how many minutes are you anticipating this phenomenon? I am sure you are a smart guy but that was a muted trumpet {wah-waaah} moment.
O.K. and I said the same thing about the Euro back in 99 (ironically, I still believe it is not going to survive). But look at where are we now,had I converted every dollar I earned to Euro,I would have been in a much better shape by now. Give me one fundemental reason as to why the dollar should stay strong. I don't know how many people here are well versed in economics(not short term traders since traders are not economists),but for fiat currency,the major item that affect currencies is interest rate. That and then if every thing else is equal,it is the trust of the world in that currency(after all Swizerland has no major attraction to its currency beside trust). And if you look at the DXY it has lost both,interest rate and trust. Don't get me wrong,I wish the dollar rally back to where it was,because everything I own is cash in DXY,and I feel like shit because I didn't buy gold or forign currencies,because I wanted to buy stock. And in the end I didn't do either...
"Give me one fundamental reason as to why the dollar should stay strong..."
I can't.
Our relative strength as a nation slips year by year; trends point to continued decline, not fundamental change for the better.
Even in terms of basic political stability, the U.S. of 2009 and I'll bet 2010, 2011, 2012, 2013 and beyond, is not nearly as unquestioned as it's been through most of our lifetimes.
No. I don't expect massive waves of civil unrest let alone a civil war, but faith in our political, social, and economic institutions is certainly at a low ebb and I don't see that reversing.
Let's say the GOP manages to capture one or even both House of Congress next year; does anyone doubt that the Obama administration - particularly AG Holder - will do all within its power to undercut the will of the American People if that will is being expressed by Republicans?
Anyway... enough rambling. To reiterate... no, I see no fundamental reason why the dollar shouldn't continue to decline year by year over the next decade and beyond.
BILL
One good reason: overwhelming superiority in the ultimate backup to a failing fiat currency regime: guns.
The euro is a better managed "product" because it is not easy to "manage" in a Keynesain manipulated way. they cannot float bonds when they feel like it, and there are strict country restrictions on debt. To agree on bond debt, the originator Central banks all have to agree-and since when do the Europeans agree on anything except 5 week vacations? It's a basket of currencies that has a special problem: it could collapse because anti-inflationary Germany and pro-hyperinflationary Greece and Italy are having marriage problems. Look at greek riots last year because they are not allowed to inflate willy-nilly.
Yeh and not to degrade the poster,every one predicted a dollar rally. But common guys,if I say there is gonna be a dollar rally say at DXY=80 and DXY=78 and DXY=76 and it finally occurs at DXY=74,I realy can't take credit for that.And you can't count on short term adjusments because of this of that. I still see no future for the dollar,and the only future for gold is because of lack of trust more so than inflation hedge.
Deflation is a contraction of money supply. Money supply is NOT just what the USG gets to counterfeit. It's CREDIT. Your house, if it has a mortage,=downpayment in cash+ your future obligation to pay it off. The fractional reserve banking system counts that obligation as money supply. Derivatives are money supply as they have percieved value at the moment. So NO MATTER how much Uncle Sam prints, it doesn't even get close to the trillions and trillions lost in asset value(homes=50% of previous value) and the loss of credit in the system that is considered money by the USG and the system. We are talking about 100's of trillions lost in equity value,asset value. Thats a contraction of available money supply to lend and money velocity goes off a cliff. Private credit=20x public USG credit.
The USG is trying reflate credit with spending and treasury bonds(and hence money supply) but they do not have a prayer.
Then, the deflationary environment, like Japan, lasts so long that the economy is in ruins and there is no hope to meet the debt obligations across the board. Since fiat is based on a ponzi scheme that the last man standing pays debt off with labor, the currency goes into crisis NOT because of increase in money supply(there are less dollars, yen in circulation as credit or cash) but because there is NOTHING to back the ponzi scheme up. Japan has like a .75 birthrate(as in 3/4s of a rugrat per family-it's too expensive to have kids and they have no future hope). They are not going to be able to pay off their deflation debt obligations ever. The currency crisis is NOT due to hyperinflation(printing) but because no one work enough to meet the obligation beset on them by themselves and the government. Fiat implodes-no one lends-people race to gold not to hedge against fiat devaluation but because it's the last money standing that does not have an obligation against it.
That's deflation and why you hold gold in the long run. China and Brazil can swap shit all they want, they are just swapping shit like the US swaps shit.
If you understand how a market works then you see that flight out of assets does not happen all at once. As a market goes to shit, allot of that money will find a new place to go. The last money out loses most but the first money out is still intact.
Deflation is when the Silverdome sells for just over 500k Obama dollars. Ned
Correlation? Causation? Coincidence?
The price of gold does have a kneejerk reaction to the dollar movements. Gold is mostly about the strength of the bank/fiat system in general. If unemployment numbers are to be believed, then the assumption is the FED will have to stop the carrytrade and low borrowing rates to keep inflation under control. This all happened "so fast-Timmy says" and better than expected. In the longer run, gold has appreciated against all currencies, but exceptionally well(like 480%) against the dollar. It would be natural as the carrytrade was wound down that the gold price would sag against the dollar. It's still wayyy up over the last decade. If there is any fiscal discipline, unlikely, then gold would crater. But when has fiat been disciplined in it's brief history? Like once...under Volker...after the 70's disaster and Vietnam. We know what Obama did to Volker.
Gold usually has a decade long trend. The dollar is about the same length. We are at the end of the longerterm trend so the dollar may move up again. If the trend is abruptly topped out in the next 3 years, then it's another decade of down,down,down. But we are in a deflationary trend, which will make your senior currencies resistent due to an overall implosion in credit-as-money-supply. Don't bet the house against the zero dollar.
"If unemployment numbers are to be believed..." Aahh... but there's the rub, no? We all know they're not to be believed - not in any meaningful sense certainly. Where's job "growth" happening? In government, right? Government and to an extent healthcare bureaucratic and "support" personnel. Education? (Well, what we refer to as "education" anyway.) Regardless of short term dips, the "education field" will no doubt continue to provide a fairly bright economic future for many - if by "bright" we mean "bright" for the employees and pensioners yet not so bright for the average American based up the ever-increasing burdens on taxpayers of supporting the system. Oh, well... Merry Christmas! BILL
I am betting the house unless bannana Ben quits.
It's nothing to do with inflation vs. deflation. It's supply and demand, of dollars. There are way too many FRN's floating around to act as the lube for international transactions. Lots of $ lube up the oil trade. We're already seeing countries diversify away from transactions in FRN's. As soon as we reach a critical mass, and people realize that the FRN ain't worth what we're telling them they are, there will be a waterfall event. There will be a bank holiday and then your old $10 bill will be worth one Obammy mega-buck. My Krug will go up to 10,000 mega-bucks overnight. What the phuck is deflation anyway? Is that what happens when I watch the Golden Girls?
China and lke 2 countries have set up agreements. With all the talk, the senior currency RIGHT NOW is the US Dollar. Everything is denominated in the DX. There is no viable alternative except maybe the EURO, which is a basket of trash and they are in worse shape than we are. Sooooo, even if the dollar was not going to be used in the future, you need dollars to convert to something else. If an assload of carrytraders need to cover their shorts or borrowings with a rising dollar, then there will be a run on the dollar. See YEN October 2008 and Dollar 2008. To get to your dream scenario, all roads pass through the US Dollar first(before it goes down the toliet for good.)
No other country is going to take China seriously. They don't know the value of what they have or how much they have of it. It's a financial stone age over there and pinning the value of their money to the dollar is the ultimate in kicking the can down the road.
I beg to differ.
The theory that the Euro is in "worse shape" doesn't follow. Europe hasn't printed $700 billion and doesn't have a $12 trillion debt problem. Or in other words, Europe isn't bankrupt...
In the land of the blind men the man with one eye is the King.
FWIW.........
I've found the outcome is usually closer to: "In the valley of the blind, the one-eyed man is insane"
the dollar rise simply prevented the spx and dow from going off into the ionosphere based on the Bureau of Lies in Statistics report from yesterday.
it'll be fun to watch the hot action for the 10s and 30s next week.....please, no talk about failed auctions guys and gals with over one trillion bank deposits on reserve and a LSD infested monkey at the printing presses.
you suck dick george. suck dick
+1000
couldn't agree more - there will never be a failed "auction." it is an event programmed in advance, with pixelated accounting entries filling any holes.
Snowing tonight and beautiful here in PA - just had a brief power failure, propane gnerator kicked on as required and the kids immediately resumed Disney channel programming. So it goes.
-10000
George Washington is a retard