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DXY Hits 81.2, Euro Tumbles - Back To June 2009 Levels
The DXY just hit a nine month high at 81.20. The euro tumble is accelerating and was at 1.3468 last. In fact, total chaos in pairs land. Equities now completely dislocating from the EURJPY signal: Japanese biotechs expected to to hostile bids for all US stocks imminently.
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More euro rope-a-dope?
No. People are just buying massive amounts of dollars to do massive amounts of business. There's a recovery going on.
Either that or the IMF is loading up bailout bucks.
denial is powerful. Equities waiting on equities to confirm move in dxy. Monday will stay green at all costs. someone get the rumor mill going.
That jump was unexpected, at least by me. The sheep might as well enjoy the rich pasture while they can...
FT reporting that Kohn is resigning from the Fed Board of Governers. He's the big deflationist on that panel and I wonder if he's frustrated with the direction they are heading.
At a minimum it will be interesting to see if the tone becomes increasingly more one-sided toward the inflation camp. I believe Yellen is more of a realist as well but I could be mistaken.
Odds are very strong the both inflationists and deflationists will see their day. Meaning both are wrong. (because both occur)
Of course we could straight deflate into nothing.
But hyper ben will probably keep printing until hyperinflation.
There is NO MIDDLE GROUND. It's either death through deflation, inflation, or both. But one (at least) will surely occur.
It's inflation and deflation at the same time. Monetary aggregates are inflating, while the physical economy is deflating. You can read all the numbers you want, but the real economy is still deflating. (and has been for 40 years, but not at the rate of the last 1 1/2)
LaRouche's triple curve says it perfectly. It's existance (since 1996) proves the writing was on the wall before we even repealed Glass/Stegall.
FYI: Gold at or near all-time highs in the Euro and British Pound Sterling.
www.kitconet.com/charts/metals/gold/2a-euro-us-30d-Large.gif
www.kitconet.com/charts/metals/gold/2a-gbp-us-30d-Large.gif
The doelarr moves up and gold is sitting pretty!
The Pavlovian response is firmer prices for stock futures, oil, and gold. If there is a deal, and details follow, stocks could benefit further. If the deal disappears, stocks could suffer. ~ Art Cashin
The economy and the economists are seeing deflation with their figures but the consumer is seeing higher prices and a tougher time. Always. Something’s wrong in this Fed-driven economy.
San Francisco union muny drivers have in their contract with the city that they must always be the second highest paid in the United States; how can that factor be included in the relationship between costs incurred and prices consumers have to pay? This web of middle economic forces from public employee unions to bulk buying by multinational corporations to the picking of winners and losers with allocation of printed money from the Federal Reserve is the reason for the continued disconnect between the deflation that the economists see and the prices consumers have to pay.
According to NowAndFutures.com.(with charts):
Almost 90% of the Dow’s gains since 1963 is inflation.
Over 80% of the Dow’s gain since 1900 is inflation.
The average compounded total (Dow) return per year through 2007 is about 6.5%. When corrected by CPI, it’s about 3.4%…and with full CPI+lies corrections included, it’s about 2.8%. In other words, almost 60% of the total return is inflation only…and that’s before fees, commissions and taxes.
Oil reached a low point in January 1999 of $17, and now hovers around $80 per barrel.
Remember this from Scotia Economics (February 25, 2010)?—and tell me the consumer economy is in a deflation. LOL:
The Scotiabank All Commodity Price Index February 25, 2010 (percent change, annual rate) Growth Trends Index: (1997=100) shows Last Year 10.7; Last Five Years 6.1; Last Ten Years 6.3.
According to Scotia Economics: “Scotiabank’s Commodity Price Index jumped by 4.5% m/m in January, beginning 2010 on a strong note. The All Items Index has advanced by 26.5% from the cyclical bottom in 2009…
(“LME copper prices (the bellwether) climbed from US$3.17 per pound in December to US$3.35 in January…while prices could pull back temporarily when the Fed tightens monetary policy later this year, copper should still average at least US$3.15 in 2010 and climb to US$3.50 in 2011.”)…
“China now accounts for almost 40% of world demand for the four key base metals and the United States only 10% (excluding inventory accumulation). …
“Commodity prices are expected to strengthen in the first half of 2010, with restocking of manufactured goods and raw materials in the United States adding to ‘emerging-market’ demand. U.S. Purchasing Manager Indices have shown a marked pick-up in shipment and output in recent months. A big increase in annual contract prices for coking coal and iron ore, as tight international supplies strain to meet strong Asian demand, will add to gains.”
http://www.scotiacapital.com/English/bns_econ/bnscomod.pdf
http://www.nowandfutures.com/inflation_long_term_log.html#copper
This is the carbon monoxide poisoning awaiting sleeping passengers on this Fed freight now pullling into the Armi tunnel (see Cashin). IMO.
Face to Face With Marc Faber | Prieur du Plessis | LewRockwell.com | 03/01/10
Marc Faber, editor of the Gloom, Boom and Doom Report, sits down with Ben McLannahan, Asia Lex Writer of the Financial Times, to discuss a variety of pertinent economic and investment topics. In short, he suggests investors should make 2010 the year of “capital preservation”.
Part 1: Warns of partial US debt default
Faber says irrational monetary policy means there are asset-class bubbles forming somewhere, only we don’t know exactly where yet.
Click here to view Part 1 of the interview.
Part 2: Forecasts negative US real interest rates
Faber says stocks won’t reach new highs this year.
Click here to view Part 2 of the interview.
Part 3: On gold and China’s economic slowdown
Faber predicts Asian stocks will underperform this year because of China’s inevitable economic slowdown and suggests accumulating gold and shifting more money to India and Japan.
Click here to view Part 3 of the interview.
Part 4: On the year of “capital preservation”
Faber says global investors should make 2010 the year of “capital preservation”.
Click here to view Part 4 of the interview.
Source: Ben McLannahan, Financial Times, February 23, 2010. This appeared on Investment Postcards from Cape Town.
http://www.lewrockwell.com/faber/faber53.1.html
I respect Mr. Faber immensely, but his prediction that "stocks won't reach new highs this year" looks to be heading down the shitter already...we're like about 35 points from the Jan high right now. Perhaps Mr. Faber's error lies in thinking that we have any stock "market" left, when in fact all we have is a PR screen with some numbers painted on it by the Fed.
A rolling loan gathers no loss. And a buffered block of stocks gathers no loss either. Extend and pretend has become the ONLY reality allowed.
Thanks; I share your frustration. Faber is a key person to listen to but he has been a little all over the map in past months. The fact is with hands on the money supply operating in secret even Nostradamus would have a problem predicting equity prices. My only thought is the economy seems to be much weaker than the government economists will admit and that if the economy exerts more pressure on stocks because the Fed is unable to handle the debt load then equities could go much lower. In fairness to Faber, the situation keeps changing. I base my outlook on the fact the Fed has limitations and there’s an end to this.
If the IMF bails out CA/NY/IL/AZ/NV/KS.....would that be considered paying with yourself...
I think they've already gone blind.
didn't the DXY trade up to $81.342 on 2/19?
Umm...stocks are the new "safe-haven"? ROFL. Expect ANYTHING in the idiotland that are our so-called "markets" today.
+100
my trading in the u.s. equity market will be very limited going forward.
what a fucking joke the stock market is. that said, i'm confident the day will come when it tanks and i'm just going to laugh at all the suckers for getting burned again for the umpteenth time. all i can do is tell those that i know that they are out of their minds for being long u.s. equities.
They're going to have to get $nya over 7100 and $nyk over 4700 before I throw in the towel on my shorts.
These are broad indices that are actually showing weakness- and they can't be manipulated by any ETFs that I know of.
The bubble is stealthy, my friends. But it is already big and growing daily.
At the top is always the most irrational.
One clear measure of the trend: "Bewb_Flation"! As is clearly in evidence on CNBC. The race is on between the morning anchorettes: Trish Regan (just had twins) and Melissa Francis (pregnant). Adds to already existing evidence of already rampant Bewbflation : average US bra size is up 2 sizes since 1996 from 34B to 36C according to Frederick's of Hollywood.
Finally some USEFULL data !!
"at the top is always the most irrational"
"Gold to 6000"
Need I say more?
Where are the idiots who were screaming how the Dollar was toast? LOL They all disappeared.
Just remember that the pushers of debt are actually WORSE that the pushers of drugs. They cause more damage and reap more havoc across most people’s lives than drugs ever could. ~ Nathan Martin
I don't think dollar's out of the toaster yet..
Likewise with most of the GOLD BITCHEZ crowd.
The Dollar may collapse down the road, I agree. The point that appears obvious though is that blinding shorting it (like the idiots were) without have a clue about trading is not enough to make it in the markets.
Just as usual with the middle class. My wife is still AA. Glad she's so good looking.
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