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US Dollar Surges To Near 3-Year High
Moments ago the USD value basket - the DXY - rose to highs not seen since July 2010. The recent 6.6% swing is at an annualized 25% rate of appreciation. The dollar appears to have now become the flight-to-safety currency, which historically has been associated with plunging risk values. However, now that the dollar strength is simply a function of other central banks perceived as diluting their currencies more, and injecting capital flows into the G-0 system, all of which is expected to sooner or later make its way to US stocks, this is paradoxically, now a risk on factor. For US companies that have to export into such an environment, this may not be quite risk on, but that is something one can roundly ignore for now.
Charts: Bloomberg
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It's all fun until somebody loses an eye.
or a gold tooth
Looks like we're clear for some serious debasement.
It won't last, it kisses and retreats every time for the benifit of profit takers.
Cue "This is the End?"
Watching the dollar rally is like watching the 100 meter dash at weight watchers... You cant help but watch and laugh-you try not to be mean and laugh-yet you cant help yourself... As grueling as it is to watch you know "someone" has to win eventually...
Glad I'm not an exporter.
cleanest dirty shirt
largest sinking boat
healthiest person in the hospice center
healthiest person on death row
richest person in bankruptcy court
last person without parachute to exit the aircraft
all are synonyms for mister lucky
No more poopy for you, Comrades!!!
Hope floats. Shit floats. The biggest turf in the toilet bowl goes down last. Even kids know that.
Thanks to Central Banking, everything is booming! Including MBS durations. See this guy's charts.
http://confoundedinterest.wordpress.com/2013/05/17/are-house-prices-in-a-bubble-again-lumber-confidence-mortgages-interest-rates/
This is all transitory, $DXY will be well below this point by end of the year.
http://www.youtube.com/watch?v=deuC8GPr31A
the last 2 times the USD broke out like this it was when the world markets were beginning their collapses in 2008 and 2010. Now it breaks out under the exact opposite scenario - world markets ramping exponentially to record highs. So much for signalling - thanks Ben.
This article is pure bullshit.
The value of the US dollar is not up at all --- only the value of the artificial, outdated, and all but irrelevant US Dollar Index, which is NOT in any way whatsoever a measure of the real, purchasing power value of the US dollar, but merely measures the exchange rate of the US dollar against a handful of other similarly and simultaneously depreciating fiat currencies. The US dollar and the US Dollar Index are NOT the same thing at all.
Why so many people, even here, make this elementary and implicitly pro-establishment argument and mistake is really beyond me.
akak said:
I believe it's because they neglect, forget about, or can't quite wrap their mind around the concept that the USD Index uses a moving frame of reference.
An analogous example (not to be confused with AnAnonymous example) would be a group of people (because in US citizenism, the group is all) continually piling on top of one another in a heap, each person contending to be the one on top (except for JPY, who is vying for the bottom of the pile), and all of this taking place in a descending freight elevator. (Theoretically, the elevator can also ascend, but it has generally been descending at various rates.)
Sure, the dollar may have reached a three-year high in the USD Index (its position in the pile hasn't been this high in three years) . In terms of purchasing power, though, the elevator is at the 44th floor, whereas three years ago it was at the 51st floor.
As usual for you, FourthStooge-ing, an excellent summation of the situation.
I also often have used the analogy that in a fleet of simultaneously sinking ships, merely because one's own ship suddenly finds itself to be sinking more slowly than the others, it is ludicrous to contend that it is therefore rising out of water.
But, but all those so-called experts said the dollar would be weakening by now and gold would be at $2,000. I wonder how many people followed their advice and have lost their shirt in the past year.
no shit ticket shortage here!
It'll be good to see gas back down to 2 bucks a gallon....that'll happen, right?
There is an enormous amount of cheap(ish) energy resource available in the US right now.
Further, just because the solar _industry_ looks like its picked up more than its fair share of snake oil salesmen, doesn't change two facts:
1. There is an awful lot of strong sunshine available in the southern US;
2. If there is a way to cheaply convert sunshine into electricity, someone is going to do it...and soon...
Watson
Another "technology will save us" fool. Yes, maybe, but in order for that to happen you cannot have a lot of liabitlities, you also need tremendous capital and resources (water, already available energy, raw materials, skilled labor that is paid a livable WAGE, etc.). You tell me, do you honestly think the world is allocating it's capital and resources in a wise manner right now? Yes, technology may provide new solutions, but to pretend that there are not real fucking limits is just plain stupid. The world continues to destroy ecosystems, build bombs, and allow fraud to run rampent. Still I guess it is good to see someone is optimistic.
great comment-spot on- law of phy. at 200/bbl it would become a raging demand industry. until then another "al gore" trust fund for the 'con'nected - ask spain how it all went "down" when the subsidies dried up. many a fool lost it all...
The problem was the subsidies.
If you want the process, give the companies no grants/cheap debt/guarantees.
But give them a ten year tax-free period.
Umm, the government can offer a 100-year tax free period, but if the business case doesn't close, smart entrepreneurs won't bite.
(Psst ... the business case DOESN'T close.)
You underrate American (indeed human) ingenuity.
If the laws of physics do not prevent it, and humans want it, an efficient sunlight->electricity converter will be developed.
Can't be harder than developing A or H bombs.
"Can't be harder than developing A or H bombs." - Bullshit, have you ever developed a technology and brought it to the market? I have. Again, I do not deny anyone's "ingenuity", the point is that there are very real limits and very real liabilities and very real experts in the technical fields, who, unfortunately know little about bullshit eCONomics. In any event, that which cannot be sustained, won't be, no matter what anyone says.
There is no process to make fertilizer from solar. Most fertilizer is made from Oil.
Imagine no more chemical fertilizers, back to a world were yields were maybe 1/5th as much because plants like corn, the cornerstone of food production in the US, simply can't grow with enough yield in natural soils.
Imagine if the the price of beef, chicken and pork went up many fold since all of these are grown on cheap corn and without fertilizer from Oil, corn wouldn't be cheap anymore.
That's the seldom mentioned elephant in the room when it comes to Oil usage in the US.
Even if a replacement if found for Oil as an energy source, there is no simple way to replace Oil and artificial fertilizers in modern agriculture.
FACT; 2/3 of the total fixed nitrogen in flux now comes from diazotrophic bacteria, a full 1/3 of it comes from the industrial Haber Bosch process. BOTH processes are extremely energy intensive processes. The bacteria grow slowly (that is why we invented the industrial process). Take away the industrial process and you lose 1/3 of the human population overnight. There are limits folks. Try driving 300 miles on an empty tank if you don't think there are limits. A greenhouse and gold fish pond are better investments than stocks right now.
It might be even worse than that:
- In order to be able to use the natural process of nitrogen fixation, cultures have to be rotated: you can't just plant the same thing in a field all year, year after year without rotating cultures and letting the field lie fallow.
So not only would we directly loose 1/3 of our capacity to grow food, we would also loose the capacity to grow the most energy efficient foods non-stop.
And on top of that there is also the problem that the highest yield varieties of grains like corn and the highest plant densities cannot be achieved without using fertilizer: simply put, a field on its own can't provide enough nitrogen to allow the right plants to grow in the high speed and high densities needed for modern yields.
Food production in the petrochemical age is definately coming to a close. However, it isn't all doom and gloom like you prophecize. The problem isn't in a lack of energy or nutrients, it's in a lack of efficient use of available energy and nutrients. Up until now efficiency (i.e. don't waste the fertilizier and let it wash into the gulf of mexico) hasn't been very pressing (law of abundance), but natural processes are extremely efficient at reusing energy and nutrients... we've been trying to reinvent the wheel for the past 100 years, now we get to take a forced lesson from nature on efficiency - as far as I'm concerned it can't come soon enough. The biggest bane to humanity was the discovery of fossil fuel hydrocarbons, without them we would have learned this lesson decades ago and the world would be a wholly different and less volatile place. Monoculture is going to be the first mistake to be remedied.
Pretty soon ~ Monsanto will have a patent on tilapia...
Give Monsanto a few more years, and they'll be lobbying for a patent on human reproduction itself.
1. There's a lot of oil in the US (indeed the world);
2. If food consumption was reduced, US citizens wouldn't starve, but maybe obesity reduced;
3. The real long-term cure is a slow reduction in the world's population. Already true for Japan and Germany.
I take it you're volunteering...
I have fewer than three children, so I have already contributed...
More seriously, as countries develop, average family size falls, even with some religions that try to prevent this.
And the US does have both v. cheap food and v.large people...
Corn, the way it is used today, is not food. It's filler.
My dear Watson,
You need to think a little more. Examine your assumption of "cheap" oil. With $95 WTI, you'd think rigs might be surging. Nope. You think each well is producing more barrels of oil. Not in the Bakken.
I know you want it to be great, but I suspect you have no idea about the costs of producing energy.
For some fun, google "marginal cost per barrel of oil."
If there are acres and acres of fairly efficient sunshine-~>electricity converters in otherwise desert land in the southern US, oil is going to get cheaper...
Lots of variables here, of course, but just for the sake of argument, we can - by the magic of the interwebs - come up with a pretty good "back of the envelope" estimate to see what kind of area we'd require to replace a meaningful portion of US annual electricity consumption:
Annual US Consumption: 3,886,400,000 MW-h/yr => 3,886,400,000,000 kW-h/yr
Energy Density of sunshine at Earth's surface: ~ 1 to 1.4 kW/sq. meter - depending on season, latitude and many other factors, but - let's be generous to your argument and say 1.3 kW/sq. meter
Efficiency of Solar/Electric panels: currently just 15 to 20 % or so ... again, let's be really generous to your argument and assume a (frankly impossible) improvement to 100% efficiency.
So, for starters, how much area would be required to completely supply the energy requirement? Simple arithmetic - but with large numbers:
3,886,400,000,000 kW-h/yr / 1.3 kW/sq. meter =~ 2.989 trillion sq meters => 1.15 million sq miles.
Of course, the sun doesn't shine at night, so we have to roughly double that to 2.3 million sq. miles
Finally, area of continental US: 3.1 million sq miles.
I hope you can see there's a bit of a problem with your hypothesis.
There is a key mistake in your math. You forgot to multiply 1.3 kW/square meter times the total number of hours each square meter produces electricity in a year - your calculation computes the total surface required to produce all of the U.S. electricity in one hour.... one square meter, at 1.3 kW producing for 8 hours 365 days is 3796 kwH/square meter so divde total consumption by total "annual" production per square meter and you get 1,023,814,542 square meters = 395.297 square miles of required photovoltaics. This is still an underestimate because 100% efficiency is unrelistic mainly becuase only about 30% of photons from the sun are in the right frequency/wavelength to "bounce" an electron. Still, we are talking less than about 2500 square miles of 30% efficient photovoltaics realistically...
Less than Nellis AFB?
Not sure about the size of Nellis, but 2500 square miles is still a large area. Obviously this is a rough calculation and some of the assumptions are way off, but to be safe say 10,000 square miles - which should be significant overkill - still talking only 0.26% of the total U.S. surface area...
Yeah ... er ... +1 for you. Only off by about 30,000% or so ... my Phyz is pretty rusty, obviously and had a lunch crew shouting at me ... "C'mon, we're leaving right now ... are you coming or not?".
I was wondering where that "hour" fit in ... now I remember. Thanks for the clarification.
Several years ago, Robert Rapier did some clearly explained calculations regarding the area required to supply the electricity demands of the US with solar power:
using photovoltaic panels:
http://www.energytrendsinsider.com/2007/07/27/a-solar-thought-experiment/
using solar thermal:
http://www.energytrendsinsider.com/2008/02/25/running-the-u-s-on-solar-p...
He also did similar calculations for what it would take to replace US gasoline consumption with solar power:
http://www.energytrendsinsider.com/2008/05/12/replacing-gasoline-with-so...
The articles are brief and well worth reading.
Excellent links ... Thanks
Storing the electricity is a bigger issue, and the reason artificial photosynthesis will be a better alternative - if it can ever be figured out.
ya funny how metals get crushed but other commodities do not, good thing there is a liquid market for everything / s
We're losing the currency war! Mr. Chairman, get to work!!!!
You hear him, Chairclown? Ludicrous speed! Now!!
In a free market that reflects true price discovery, equities would drop. With "mark to fantasy" very much still in play, don't expect that to happen, besides I'd argue the dollar index is weak and getting weaker. Let's see this chart back to 1970 please. idiots, the "deflationary" period is almost over folks.
It is deflation which will put the nail in Bernanke's printing bet.
And with it ... all the side bets that inflation will make income streams exceed payments.
Insolvency is not a liquidity issue. And one day it will be tatoo'ed on the fed's butt.
Sorry Angie, I produce real products, I have never seen an extended period of deflation in my input costs (diesel, timber, steel, utilities, etc.). Stop looking through those short-term goggles. Unless of course your plan is to die soon and you have no plan to stay in business for 10 20, 30 years, or leave the business to your kids.
The more the Fed tries to assert it's dominance through their puppets in washington and at the PDs, the more laughable this game becomes. The west is insolvent, period. Far too many claims on future labor far too many liabilities, far too many paper fucking promises and very few assets of real value, period.
Did you see deflation in 2008? If so, was it not "extended"? What do you consider "extended"? (These are just honest questions not to be snarky.)
I would consider extended 10 years or more. Show me a period anytime after 1970 where oil has decreased in dollars for ten years or more. If you are planning for retirement, obviously an extended period would then be 20-30 years. Again, you saw deflation for a year. Big fucking deal, do you only plan to be in business for a year?
The goal is 7-8% annual inflation masked as 3% inflation through manipulated data.
And that would work if that hot/cheap money was getting into the real economy, increasing velocity, and being used to pay down debt (cheaper dollar paying down debt in old more expensive dollar). In large part, greed, insolvency and failure to mark to market has prevented this from happening. BOOM motherfuckers BOOM.
This is very interesting - could you explain in more detail what you mean please?
in order for a cheaper dollar (inflation) to be used to pay down debt, it has to get into circulation (people have to be spending it). If the dollar is hoarded on bank reserves (so banks can "appear" solvent and give themselves bonuses-greed) or leveraged by paper-pushers (to make their funds look better and pay themselves bonuses- more greed) it doesn't do jack shit to pay down debt or help the worker (labor) pay down his debt or feed his family or help the tax collections (required to pay down sovereign debt). That help. BOOM motherfuckers, BOOM. Labor's share of this hot money must increase in order for the "inflation to pay down debt and save us plan" to work. Look at what labor's share of the "cheap money has been over the last 15 years, it's crashing. BOOM motherfuckers BOOM. All fiat, including the dollr is fucking dead, period. You address solvency by i) paying off the debt, ii) reducing liabities, iii) actually growing and increasing velocity so the debt can be serviced etc. or iiii) jubilee!!!!! The "entitiled rich and powerbrokers will never let a jubilee happen (remember that debt is their asset-free money for life through interest). WWIII is the most likely outcome now.
Is there any tool/policy available to the Fed that would allow them to somehow force the reserves out of the banks and into the real economy? (I know this might not actually be their objective, but if so, is there anything they could really do?)
No, CONgress controls the purse strings and fiscal policy and right now labor has no representation. The MIC and Wall street OWN your representation and are diverting all the money to saving their non-productive asses.
After years of being on here I can say that not only have I learned a ton from LOP but I also end more conversations with people I know with "Boom motherfucker" and "you stupid fucking sheep".
I thank him for both.
Thanks fonz, and by the way - BOOM; http://www.marketwatch.com/investing/bond/10_year
lol my predictions and long term capital losses certainly are represented in that move today.
LOP, for a brohiem, that "produces real products". How do you have so much time to post on ZH? Been following you for months. Appreciate the posts, but seems you have many free hours to post your opinions. Especially, when this economy is pushing everyone to max+1 efficiency. Did I miss youre out of business now or something?
True helicopter money (literally throwing newly minted money out of helicopters) might work in accelerating deleveraging and thus solve the excess debt problem we have because most people would spend it or use it to reduce their debts.
This shit that we got instead is just making things worse since all this new funny money, because it's being given without constraints to companies specializing in financial speculation, just pools-up in asset bubbles, vastly increasing capital misallocation and thus reducing the productivity derived from capital (money that goes into overvalued assets doesn't go to productive uses).
"Hell-iCOPter" money is short term protection against the peasants who control fiat currencies worst enemy: deflation. Indeed, the trump card is money velocity. Keep watch on Velocity because it is at historic lows.
Has ZH been able to find any traditional correlation that hasn't broken down?
A little duct tape will fix almost anything.
"Has ZH been able to find any traditional correlation that hasn't broken down?"
Heads banks win, tails investors lose - still as true as ever.
Wicker furniture from Indonesia just got a little cheaper, whoo hoo!
Pier One......here we come!
Indeed, yet more importantly what little is still produced by U.S. manufacturers just got far more expensive on world market.
Yup ... strong dollar tends to do that.
So ... I guess that means that $85 billion a month isn't enough.
If Bernanke doesn't ramp even higher America will slid.
Yup, Bernanke will ramp, probably due to some unforeseen event.
Which will simply compel others to ramp as well into a never ending positive feedback loop until real world-related circuit breakers force an end to the madness.
You now have to wonder if Abenomics was conceived by the FED, BIS, et al to kill two birds with one stone: USD up, gold down.
Please, you know it was. The question now is who will put the bid back under treasuries? I predict that the Fed will increase, not decrease their open market operations. These idiots are still banking on the "cleanest dirty shirt" strategy when the rest of the world really doesn't give a fuck anymore.
Why doesen't that assfuck Bernanke just print up a trillion and throw each of us 5k or something since the dollar rules the world? He is like the rich guy at the bar who walks out on the bill. What better way to make sure the sheep keep grazing than to send all of us to disney world on the backs of the rest of the world?
We are only one crisis away from disaster, check the gas price spikes in MN.
http://minnesota.publicradio.org/display/web/2013/05/15/business/gas-prices-minnesota
That's not a spike, it's a blip. I'm seeing prices like that on occasion here in Michigan. A real spike would be north of $4.50 a gallon. All hell would break loose.
My dump trucks run on diesel, $4.30 in S. Fl
Getting killed on five year contracts.
Tell me about it. Where are those fusion-powered tractors I was promised in 1971 when we let tricky-dick close the silver/gold window. Blowback is gonna be a bitch motherfuckers.
I want my tokamak.
We'll still get our fusion-powered tractors. Remember, Tricky Dicky said that he was only "temporarily" removing the convertability of the dollar into Gold. We just have to wait a bit longer for him to re-open the Gold window. Patience...
/sarc
I can see Dick's boney hand rising from the ground to lift open the gold window, which promptly results in the complete annihilation of all bankers in a single blast, much like the nazis at the end of Raiders of the Lost Ark.
Um......
We are watching yet another manipulated fraud by Bernake and his Jewsih banking friends. With the macro new as bad as it has been, this dollar is laughable. The US is a safe haven? How so, we have 17 Trillion in debt. Where the hell does this manipulation end?
It will end just like the soviet union ended, with some states telling the Federal government to go fuck themselves. The Feds will be powerless to do squat about it as they will be so broken financially and with respect to "leadership" that they will not be taken seriously. All eCONomies are really local anyways, always have been. How's your mandarin, spanish, portuguese, and russian? still time to brush up on this.
With states now moving towards establishing their own currencies, the end game might be a bit less apocalyptic.
Only for states that have lots of natural gas, oil, coal, nuclear power, skilled labor, and a strong volunteer army to protect their assets. In order to actually do anything you need real fucking inputs.
What 4?
Texas? Florida? California? North Dakota? Oklahoma?
Comments from Ben Bernanke 11/21/2002
The conclusion that deflation is always reversible under a fiat money system follows from basic economic reasoning. A little parable may prove useful: Today an ounce of gold sells for $300, more or less. Now suppose that a modern alchemist solves his subject's oldest problem by finding a way to produce unlimited amounts of new gold at essentially no cost. Moreover, his invention is widely publicized and scientifically verified, and he announces his intention to begin massive production of gold within days. What would happen to the price of gold? Presumably, the potentially unlimited supply of cheap gold would cause the market price of gold to plummet. Indeed, if the market for gold is to any degree efficient, the price of gold would collapse immediately after the announcement of the invention, before the alchemist had produced and marketed a single ounce of yellow metal.
Seems like the alchemist was successful with something called ETF,s in the end its all a facade
It seems to be a safe haven for any biped that wants to come here and receive generous handouts.
Ok, let's see if they can pull off the next trick - USD down, GOLD down? Fuckers.
American production is toast -motor manufactures will be eaten by cheap imports -
farewell GM unless bailout emerges from taxpayers.
But, but... Tesla..
I live in the oil belt in the middle of America. The strong dollar is knocking down all commodities except oil. I don't know what it is on the coasts, but 3.97/gallon is very high for my parts of the country. What are the prices elsesewhere? This has to be super bullish for the consumer confidence number due in an hour.
The Fed can control gold (through the bullshit paper market), but they can't control oil, which has always been the real reserve currency. Basically, energy is a currency, without it you can't actually do shit.
Gas went up like $0.30 here yesterday, to approx $3.75 here in Aurora, CO. Yes, it's bullish! I am really looking forward to $5.00/gal. Isn't everyone? I'll be fine as long as I hit that $550MM Powerball Jackpot!
Interesting that I've seen diesel come down in the last year or so(around here anyway), and now there are places that have diesel at the same price as regular unleaded. There's one 7-11 that even had diesel at 4 cents cheaper than their unleaded.
$3.429 this morning here in eastern PA. I couldn't believe it but that's what is on my receipt.
I would argue that the dollar isn't surging, it's just not falling as fast as the rest of the shit paper.
Well said,
Trapped in a sea of shit and toxic soup, a man will climb upon a bloated corpse to keep from drowning.
OT ... the head of the CIA gets called on the carpet by his masters, angered by his insufficient support for their war aims:
The CIA chief has made an unexpected visit to Israel to meet senior political and military figures to discuss the deteriorating security situation in neighbouring Syria.
John Brennan, who took up his post two months ago, met the Israeli prime minister, Binyamin Netanyahu, defence minister, Moshe Ya'alon, military chief of staff, Benny Gantz, and Mossad chief, Tamir Pardo, according to reports in Israel media.
http://www.guardian.co.uk/world/2013/may/17/cia-chief-israel-syria-visit...
Have you bought Israeli bonds today, comrades?
does strong US$ = weaker stock prices ???
can beleive US exporters can live with such a strong $.
any job creation has to go overseas now
You are assuming earnings matter which is no longer the case. Everything is bullish until it all collapses.
You are also assuming the U.S exports something other than dollars.
America is the world's leading hopium supplier Fonz. Bigger than Coca Cola.
http://www.youtube.com/watch?v=3V8nu6e8eFY
will FED step up and buy the YEN ??? confetti anyone !
Sell High and Buy Low (USD $ / Au respectively)
And just as I suspected yesterday afternoon, stawks are surging today, too.
S&P 1666 is but mere hours away.
http://www.ndtv.com/article/world/china-woman-sentenced-to-death-for-inv...
USD bottomed in 2008, bitches.
Doesn't mean it's good for the USA, in fact it's much worse because the real value of U.S. debt goes to the Moon. But go to the Moon it will. DXY is going to take out 120 before this is all said and done. Hyperinflation will start at the periphery of the global financial system, not the core.
Interesting. I can't say it won't happen that way, because I am not in possession of the script, and have no hand in the direction of this comedramady.
We shall see, I s'pose.
"Hyperinflation will start at the periphery of the global financial system, not the core." - correct, as I said ealier, the "deflationary" period is over. The U.S. debt becomes a much bigger problem, welcome to the 1500's motherfuckers, the feudal lords and robber barrons are back in the the house.
I know this will be unpopular, but you gold guys can accomplish the same catastrophe protection with farmland, and have something that will make you the most powerful citizen in a post Apocalypse town.
Yes, if things unravel enough your title deed would be ignored, but if they unravel enough no one would trade calories for yellow metal, either.
It's good to diversify. Gold's more portable, a happy medium between land and bitcoin that's stood the test of time. It will not be different this round.
UST yields rising with the USD? So UST yields and the USD are inversely correlated now? Wtf?
yep... just like they are allowing the stock market to go up-while holding down all the commodities... Makes no sense.. They are desperate! The end of the $$ is nigh
Import taxes must be on the way
If it turns out that the continual unraveling of Europe and Japan does cause a capital flight to safety to the USD, this would make the dollar "stronger" and it would hurt US exports and push the US economy down even deeper.
By "make the dollar stronger" does that mean lots of capital moving into treasuries, etc. would maintain or give the USD more purchasing power domestically?
If so, would this be a deflationary characteristic? Does this mean it would be good to be in cash or that cash would be king?
"US Dollar Surges to near 3 year high"
No wonder Venezuela is having a toilet paper shortage. In the short term, it's not fit for wiping..yet.
Strong $ slams gold and silver, but oil is up almost 1%. WTF?
Yep and Brent June contract expired yesterday on a very weak note.
WTF
The South was right!
I believe the dollar has a long way up left. This is bad for gold.
Gold will trade sideways for the next couple of months.
"Sideways"? Only if you hold the chart sideways. It's been going Down!
The dollar is only strong because the rest of the world is going to shit at a faster pace than the U.S. ; when the rest of the world finishes going to shit, the focus will turn to how fast the U.S. is turning to shit (since there wont be anything left to compare it to) at that point the dollar will correct.
Didn't Zerohedge mention numerous times during the past few years that the falling dollar is causing the S&P to rise? Now that the dollar is rising, why is the S&P not falling?
"It's different this time." "It's manipulation this time".
"ZH is never wrong". "Fucking splitters!". ;-)
It will.
http://weaponsman.com/wp-content/uploads/2012/07/wile_e_coyote_gravity.jpg
I think that dollar strength will continue as the periphery unravels. The yen is collapsing in terms of gold. From an internationalist POV if you are an American with cash you are rich and lucky to get to buy cheap gold. If you are an American you are depressed because the price of gold is down 30% from the peak and bearish. It's all relative don't you know. Understand that long term the US dollar is an unbacked currency issued by a bankrupt massively indebted government, albeit the issuer of the reserve currency for the world.....for now. China loves all this: her dollar FOREX reserves and Treasuries are very strong and can be converted to lots of gold, silver, and hard assets. Here's a clue: you want to act Chinese.
US Dollar should continue higher as Euro (and the other five currencies continue downward).
http://bullandbearmash.com/chart/spot-dollar-weekly-125-outlook-bullish-...
Should continue putting downward pressure on commodities.
Rising US equities is counter to this USD move.
So glad I save dollars in the big banks rather then foolishly stack pms at the bottom of a boating accident.
http://www.enca.com/technology/cornstarch-proves-its-weight-gold
The Dollar is the bully of the school yard.
There's a reason bullies go around whacking other kids: it's the only way to try to stay above them. Until they get smart, and they organize and put him in his place.
But the dynamics of a school yard is such, that the main beneficiary of the bully - the 98 lb 'weakling' -- is now vulnerable to others. So he must use his noggin and verbal skills, to keep others from organizing against the bully.
On the era of The Bernark, fundamentals do not matter anymore. Gold will be crushed for a while. It is trading by techical indicators only and of course manipulation.
It could take much longer for "the end". Many people here think that things are about to break, I think not. Their tricks are working, probably better than expected. Physical demand of the precious metals do not seem to worry them.
The US Dollar Index reminds me of that tired joke. Bill Gates or Carlos Slim walk into a bar and suddenly all the barflies inside are billionaires (on the average). I am retired in Mexico and a lot of my income is in US Social Security. My savings which are in the lower six figures provide insufficient income to keep me in beer, even if I were to join AA, thanks to BSB and ZIRP. About a year ago the dollar was 14.5 to the peso. Two weeks ago it fell under 12 though it has made a slight recovery since then. So I have seen a greater than 15% drop in my spendable income in the last year. The commercial bank CD's here pay up to 6%. For me the "strong dollar" is a myth. And Mexico is suppose to be a third world country. That, I guess, makes Amerika fourth world. Welcome to the NWO.
Here is the breakdown of how the USDI is calculated, so a lot of the so-called dollar strength is from the Japanese death spiral.
Euro (EUR), 57.6% weight
Japanese yen (JPY) 13.6% weight
Pound sterling (GBP), 11.9% weight
Canadian dollar (CAD), 9.1% weight
Swedish krona (SEK), 4.2% weight and
Swiss franc (CHF) 3.6% weight
Thus my reference to Gates and Slim.
Thank you Argentina! Muchas gracias!
With that USDI weighting... the USD is going to soar in relation to it as Japan continues to fall and then when the EU further unravels (pushing the euro and pound down). I guess the dollar will climb and soar and then be king of the mountain, until it is the last one standing. And then... it will be its turn to die the death of a thousand knives.