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The Euro Crashes To 12 Year Lows And Now The US Commerce Secretary Starts To Grumble About A Strong Dollar

Tyler Durden's picture




 

A crashing Yen failed to help Japan or fix its economy, but while Japan may now be a lost cause, the Keynesian masterminds of the world will give it another try, and following today's Draghi's announcement, the EURUSD has crashed to the lowest level since 2003, tumbling over 200 pips, and printing below 1.14 moments ago.

 

And since it is a zero-trade sum world, now that the exports of Europe - the single largest economic block in the world - are cheap enough to compete with Japan's just as cheap, thanks to currency debasement, goods and services in the global arena, it means that the biggest loser is obvious: the United States, whose currency has soared to nosebleed levels on expectations that the Fed will hike and that the US will somehow decouple from a world that is drowning in economic malaise.

However, in a clear indication that the party for the USD-bulls may be ending, none other than the US commerce secretary moments ago said the impact of a rising dollar on exports and economic growth bears monitoring.

According to Bloomberg, asked at the World Economic Forum’s annual meeting in Davos, Switzerland, whether a climbing greenback could drag down U.S. trade and economic expansion, Pritzker said “it’s a factor and something to keep an eye on.”

Pritzker said the challenge was to ensure U.S. businesses could be innovative and productive enough to attract demand regardless of the vagaries of currencies or the world economy.

Yes: it is a challenge when increasingly troubled importers could care less about innovation when the only thing that matters is the local currency denominated bottom line.

And this is something Pritzker knows too well. So the question is - how long until she speaks to none other than Jack Lew, who in turn convews a message to Janet Yellen, forcing her to "patiently" remind the market that the US never has, and never will, decouple from the rest of the world, and that unless the US wants to go straight from 5% Obamacare-boosted "growth" to recession, it too will have to join the devaluation party.

Lastly, considering the everyone is now long the dollar, the macro devastation that would result if the Fed also pulls an SNB and surprises the market, will be one for the generations.

 

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Thu, 01/22/2015 - 14:00 | 5692914 bigdumbnugly
bigdumbnugly's picture

However, in a clear indication that the party for the USD-bulls may be ending, none other than the US commerce secretary moments ago said the impact of a rising dollar on exports and economic growth bears monitoring.

 

 

lol, "bears monitoring."


Thu, 01/22/2015 - 14:01 | 5692924 Publicus
Publicus's picture

KING DOLLAR. THE MIGHTEST OF CURRENCIES.

Thu, 01/22/2015 - 14:15 | 5692979 kliguy38
kliguy38's picture

Tooo fkn funny....this is a total clown act ..........Queue Joe Kiernen licking another bankers boot

Thu, 01/22/2015 - 15:45 | 5693354 MalteseFalcon
MalteseFalcon's picture

Strong $??

No problem.

Solution?

Raise interest rates!!

Thu, 01/22/2015 - 15:51 | 5693383 MisterMousePotato
MisterMousePotato's picture

Interesting - the size of this thing; to wit: Print a trillion Euros (a Trillion!), and things change by just a couple cents. Although I understand this adds up over time, still ... just doesn't seem very significant. I mean, does it really (really) make a difference if gas is $1.99 a gallon instead of $1.97?

Thu, 01/22/2015 - 16:30 | 5693560 Max Hunter
Max Hunter's picture

yes, it makes a huge difference. Imaging you are a distributor that buys in Euros and sells in USD.  You have a project payment due for 400k Euros.  The project was started 4 months ago.  You are now 40k+ richer.  I know.. I use to do this.. I was usually taking hits in the other direction. I usually only gave myself about a 5% buffer before my margin started taking a hit.  When it went in my favor, paydays got big.

Thu, 01/22/2015 - 16:46 | 5693619 TheRideNeverEnds
TheRideNeverEnds's picture

IF they dont like the /DX @ 94.5 they are gonna hate it @ 160!

 

 

Thu, 01/22/2015 - 14:15 | 5692985 Headbanger
Headbanger's picture

Go ahead... Weaken the Dollah.. I dare ya..

Cause China will dump it in a heartbeat and then good luck selling US Treasuries again!

Thu, 01/22/2015 - 14:27 | 5693026 Bell's 2 hearted
Bell's 2 hearted's picture

you got it backwards

china will be forced to dump peg if usd continues to STRENGTHEN

china's exports are being priced out of the competition

Thu, 01/22/2015 - 14:35 | 5693059 insanelysane
insanelysane's picture

hi ho the derry-o, a printing we must go!

Thu, 01/22/2015 - 15:08 | 5693178 lordylord
lordylord's picture

Wouldn't a strong dollar buy more Chinese shit?  When did the US start exporting stuff?

Thu, 01/22/2015 - 15:23 | 5693258 Duude
Duude's picture

They already dumped the 'peg'.  Its not like they were going to make an official announcement.

Thu, 01/22/2015 - 15:53 | 5693387 Sudden Debt
Sudden Debt's picture

American car makers will also get a serious hit.

Maybe time to put some skin into it and buy a put on ford and gm

Thu, 01/22/2015 - 14:35 | 5693057 Sudden Debt
Sudden Debt's picture

To weaken the dollar back to 1.35 to the euro they need a QE4 of 2 to 3 trillion... the pase of printing just keeps getting bigger and bigger.

I bet the US will go all in before may

Thu, 01/22/2015 - 14:59 | 5693147 Stanley Kubrick
Stanley Kubrick's picture

Here in the U.S., today's incremental rise in the price of gold/silver is masked by today's USD strengthening.  Otherwise, it would be twice as large as it is.

Come May, when the FED's next round of QE is announced, the PM's should soar (in USD, that is). 

If the 'fix' isn't in, of course.....cough cough....ahem.

Thu, 01/22/2015 - 14:36 | 5693060 takeaction
takeaction's picture

cool video..Thanks for that.

Thu, 01/22/2015 - 14:35 | 5693065 Farmer Joe in B...
Farmer Joe in Brooklyn's picture

Video is a good analogy.  We are at that point very shortly before the explosion.  No telling for sure when... until.... BOOM!!!!

Thu, 01/22/2015 - 15:11 | 5693186 ejmoosa
ejmoosa's picture

Our new Motto:  We print more, because it's worth more....

Thu, 01/22/2015 - 15:20 | 5693227 SDShack
SDShack's picture

Currency Limbo - Race to the Bottom. Next Contestent - How Low Can You Go?

Thu, 01/22/2015 - 14:12 | 5692971 indygo55
indygo55's picture

What is the Euro in gold?

Thu, 01/22/2015 - 14:31 | 5693050 Sudden Debt
Sudden Debt's picture

Bullion is over 17% higher and deliverytime is over 3 weeks besides the numis gold but those are even more expensive.

I’m waiting now already for 4 weeks after my silver over here...

but my german and french orders did already arrive.

 

Thu, 01/22/2015 - 15:42 | 5693347 ZH Snob
ZH Snob's picture

have no fear, mr prick, the strong dollar problem will resolve itself, never to return again.

Thu, 01/22/2015 - 14:01 | 5692921 Dr. Richard Head
Dr. Richard Head's picture

What an upsidedown, backwards, cluster-fuck of a world we have where a strong currency is frowned upon.  Orwelian double talk for sure.  

Fuck this place, this is bullshit, I'm outta here - Me.

Thu, 01/22/2015 - 14:02 | 5692926 KnuckleDragger-X
KnuckleDragger-X's picture

Everything is just peachy here on the sun deck of the Titanic......

Thu, 01/22/2015 - 14:08 | 5692952 wmbz
wmbz's picture

Yep, the music is dreamy and the Martinis are very dry...

Wait...What the hell was that noise? Did we hit something?

Naw, keep dancing.

Thu, 01/22/2015 - 14:04 | 5692933 buzzsaw99
buzzsaw99's picture

vagaries? vagaries my ass.

Thu, 01/22/2015 - 14:07 | 5692939 Panic Mode
Panic Mode's picture

Buy Krone !!!

Thu, 01/22/2015 - 14:06 | 5692941 joego1
joego1's picture

If you don't like a strong dollar just wait a while. Old Yeller has a bone buried for that problem.

Thu, 01/22/2015 - 14:37 | 5693068 Sudden Debt
Sudden Debt's picture

Actually, a strong dollar like this will destroy the tourisme from europe.

America is now almost 20% more expensive and just as the west america trips where getting very popular in europe.

And for a lot of small towns in west America, tourisme is all they have!

Thu, 01/22/2015 - 14:46 | 5693102 disabledvet
disabledvet's picture

Meh. Whiny industrialists.  Do they come any other way?  First they get free energy, then they get free gold...and now they want a worthless dollar.

 

Oh, wait.  That's Kelly Pritzker.  She's in the media business.  "Got a media empire to unload.". You would think she would want a STRONG dollar to do that.  Very confusing.

Thu, 01/22/2015 - 14:08 | 5692944 Last of the Mid...
Last of the Middle Class's picture

High oil prices are horrible for the poor consumer who will just go buy fuel inefficient autos, he must be protected, and of course the strong dollar is just as bad, we have to make our goods and services cheaper for the world market. Race to the bottom it is. As Yoda would say. Bullshit and economics go hand in had, and can only be spearated with hot lead. 

Thu, 01/22/2015 - 14:09 | 5692946 slaughterer
slaughterer's picture

Europeans, you are all being led to the ECB slaughterhouse where your EUROs no longer buy anything.   Leave your gold at the door before you are zapped in the head by the man with the resemblance to Count Dracula.  

Thu, 01/22/2015 - 15:30 | 5693286 SDShack
SDShack's picture

Yep, I've been saying it for years. Europe is just the USSA bitch. Fully confirmed when Belgium was caught buying UST en masse. When push comes to shove, Europe will be sacrificed by the USSA FED, just like Japan has been. The USSA FED is run by the biggest sociopaths in the world and will sacrifice everything and everyone else to remain on top, even if its only an illusion in their sick minds.

Thu, 01/22/2015 - 14:07 | 5692947 MarketAnarchist
MarketAnarchist's picture

Remember, when it happens, Peter Schiff has been calling for the dollar collapse for 3 years.

Thu, 01/22/2015 - 14:11 | 5692967 malek
malek's picture

Don't downplay this. He has been calling for a dollar collapse since at least 2008.

Thu, 01/22/2015 - 14:21 | 5693005 Winston Churchill
Winston Churchill's picture

Its a process, like jumping from the 100th floor.

Terminal velocity has been achieved, and we are  just waiting on the sudden stop.

Thu, 01/22/2015 - 14:52 | 5693117 disabledvet
disabledvet's picture

No I am not going long the British Pound either.

 

The EZ is a TRADING BLOC.  All of their business is internal.  How this relates to the value of the dollar in any way is beyond me.

At least Britain is a Commonwealth...and would appear to be a better one than the Russian variant.

Fri, 01/23/2015 - 04:14 | 5695554 Ghordius
Ghordius's picture

"The EZ is a TRADING BLOC.  All of their business is internal " more like roughly 50%, actually

Fri, 01/23/2015 - 02:07 | 5695395 FIAT CON
FIAT CON's picture

This  "Fiat collapse" is like being at at party and guessing when the drunk guy finally falls down. You are all suprised he lasted as long as he did before he finially fell.

Thu, 01/22/2015 - 14:08 | 5692949 monopoly
monopoly's picture

Euro trading more like a stock than a currency. Don't know when this monetary disaster will begin, but begin it will. Tick Tock!

Thu, 01/22/2015 - 15:52 | 5693380 Disc Jockey
Disc Jockey's picture

I think most currencies these days are trading much like a bet against one country or another. The weak Euro is merely the sign that the people are starting to stop believing in the Union...now if only "Americans" could do the same.

Thu, 01/22/2015 - 14:10 | 5692950 earnulf
earnulf's picture

When everyone finally realizes that the full faith and credit of the US Dollar is just more smoke and mirrors and is backed by nada, maybe then everyone will realize how conned they have been.

Fri, 01/23/2015 - 02:10 | 5695399 FIAT CON
FIAT CON's picture

Most of the people will refuse to believe right until the last second. Then they will look around the room at each other and say "What just happened"?

Thu, 01/22/2015 - 14:08 | 5692951 madcows
madcows's picture

is this a soft announcement of QE4?

Thu, 01/22/2015 - 14:10 | 5692953 malek
malek's picture

 if the Fed also pulls an SNB

Help me here:
How would that even be imaginable? By the Fed announcing it will "cap" the US Dollar at 40 RUB and 5 CNY?

Thu, 01/22/2015 - 14:10 | 5692957 i_call_you_my_base
i_call_you_my_base's picture

More great news for US wages.

Thu, 01/22/2015 - 14:11 | 5692960 buzzsaw99
buzzsaw99's picture

Yuan devaluation in 3, 2, 1...

Bang Dae-Ho

Thu, 01/22/2015 - 14:13 | 5692975 Bastiat
Bastiat's picture

+1 for Bang

Thu, 01/22/2015 - 14:11 | 5692963 ThroxxOfVron
ThroxxOfVron's picture

" US commerce secretary moments ago said the impact of a rising dollar on exports and economic growth bears monitoring. "

translation:

WE THE CORPORATIONS DEMAND MOAR PRINTING/INFLATION/DEBASEMENT NOW!!!

Thu, 01/22/2015 - 14:12 | 5692969 slaughterer
slaughterer's picture

Lets cap the dollar at Euro parity and make the squid happy.  

Thu, 01/22/2015 - 14:15 | 5692974 overmedicatedun...
overmedicatedundersexed's picture

billionaire greene at davos said Americans need to reduce expectations and living standards..of course he flew to davos in his private jet with family and 2 nanies, those jobs are never coming back he said..why do I feel like the rag tag starving kid looking in the upscale restaurant's window watching greene and family feast..the sickness of elite wealth can only be cured with blood.

Thu, 01/22/2015 - 14:34 | 5693056 venturen
venturen's picture

Home Depot has a sale on nail guns

Thu, 01/22/2015 - 14:56 | 5693136 Thisisbullishright
Thisisbullishright's picture

.....and rope, car batteries, nice conductive wire.....

Thu, 01/22/2015 - 14:59 | 5693152 2muchtax
2muchtax's picture

You know he can be an ass and correct at the same time.

The productive jobs will not return until the $ dies, and we should reduce our standard of living.

...but he is still an ass.

Thu, 01/22/2015 - 17:56 | 5693887 PrecipiceWatching
PrecipiceWatching's picture

I am productive and work my ass off.

 

I am NOT reducing my standard of living.

 

Let the FSA, and the pampered, lazy and unproductive in Academia and government reduce THEIRS.

Thu, 01/22/2015 - 15:00 | 5693153 Thisisbullishright
Thisisbullishright's picture

And they know that the blood may flow when TSHTF!!  That's why they are coordinating with the powers that be to enact martial law when the masses have had enough of this shit!

Thu, 01/22/2015 - 14:17 | 5692992 i_call_you_my_base
i_call_you_my_base's picture

Greene should reduce his life expectancy.

Thu, 01/22/2015 - 14:17 | 5692994 vote_libertaria...
vote_libertarian_party's picture

I know...lets weaken the dollar buy printing a bunch of dollars and...oh...wait....never mind.

Thu, 01/22/2015 - 14:28 | 5693034 Tursas
Tursas's picture

You mean like SNB did with CSF?  SNB sold plenty of CSF to private EU citizens as low interest CSF based loans! A bad deal?

LOL

Thu, 01/22/2015 - 14:19 | 5692996 RabbitChow
RabbitChow's picture

Hey I know.  Wait until the euro and dollar are at parity, then we'll just use Euros. 

 

Alternatively, devalue the USD.  It's way to expensive anyway.  That'll make all those holders of Treasuries realllll happy.  Could we get the ECB to buy some?

Thu, 01/22/2015 - 14:47 | 5693104 lakecity55
lakecity55's picture

"That'll be 10 dollars or 10 euros, sir. We take both."

Thu, 01/22/2015 - 14:21 | 5693001 bnbdnb
bnbdnb's picture

Everything the currency manipulators do now will just strengthen the all mighty safe haven.

Thu, 01/22/2015 - 14:22 | 5693004 kowalli
kowalli's picture

fuck it, i will buy gold tomorrow.

Thu, 01/22/2015 - 14:30 | 5693038 Bernanke'sDaddy
Bernanke'sDaddy's picture

Moran!!  Why buy a barbaric asset when you can buy shares in productive companies like:

Spotify

Surveymonkey (whose ceo is married to Sheryl Sandberg--bonus!!)

LinkedIn

Zillow

Facebook

Netflix

Twitter

Square

Zynga

Livingsocial

coupons.com

 

I'm ready for Hillary/Sandberg 2016

Thu, 01/22/2015 - 14:46 | 5693098 lakecity55
lakecity55's picture

And, why not? I bought some Ag today myself.

Thu, 01/22/2015 - 14:24 | 5693006 williambanzai7
williambanzai7's picture

As Putin correctly points out, everything is interconnected.

It takes morons, such as the idiots currently in charge, to indulge in other fantasies. 

As I type this they are all busy enjoying Davos apres ski toddies and titties...

Thu, 01/22/2015 - 14:22 | 5693007 Yen Cross
Yen Cross's picture

  This is just the blow-off top of the 8 month $usd move up. . Watch and see where the usdx is in 12 hours.

Thu, 01/22/2015 - 14:24 | 5693018 kowalli
kowalli's picture

usd not going up, all currencies are going down.

Thu, 01/22/2015 - 14:30 | 5693036 Yen Cross
Yen Cross's picture

  Mostly you're correct. The $ has gained in strength to a degree though. Watch what happens when London opens later.

  Asia will probably follow through, if the emerging markets can hold it together. The borrowing terms of the emerging markets that are $usd based are getting destroyed by the stronger $usd.

Thu, 01/22/2015 - 14:38 | 5693074 kowalli
kowalli's picture

de-dollarization.

Thu, 01/22/2015 - 14:48 | 5693106 Yen Cross
Yen Cross's picture

 Forced reallocation. :-)

Thu, 01/22/2015 - 14:29 | 5693035 Bell's 2 hearted
Bell's 2 hearted's picture

you've been pitching USD will weaken since i've been here

you'll be right ... some day

Thu, 01/22/2015 - 15:42 | 5693345 Bay of Pigs
Bay of Pigs's picture

Yes, he will be right. And in spades. The US is adding another $1 trillion in national debt every year. Add that to the trillions in unfunded liabilities and you have a complete disaster coming.

So what's your point?

Thu, 01/22/2015 - 14:23 | 5693009 combatsnoopy
combatsnoopy's picture

I think the CHF won the game as world reserve currency if everyone's ditching devalued currencies to hedge global purchasing power.  :)   

China tried.  Damm that Triffin Dilemma. 

Thu, 01/22/2015 - 14:41 | 5693083 lakecity55
lakecity55's picture

The swiss have always had gold. Or worked in Gold.

Long Live the CHF!

Thu, 01/22/2015 - 14:24 | 5693012 Kaiser Sousa
Kaiser Sousa's picture

nice how the placed the phony paper of Gold right at 1299.50 in the last hour of rigged trading on the CRIMEX...

fucking joke.

Thu, 01/22/2015 - 14:25 | 5693015 Bell's 2 hearted
Bell's 2 hearted's picture

"However, in a clear indication that the party for the USD-bulls may be ending, none other than the US commerce secretary moments ago said the impact of a rising dollar on exports and economic growth bears monitoring."

Hardly

 

King Dollar:  Haha ... there isn't a damn thing you can do about it 

Thu, 01/22/2015 - 14:56 | 5693141 bid the soldier...
bid the soldiers shoot's picture

really?

"the impact of a rising dollar on exports and economic growth bears monitoring."

Like Stanley Fischer didn't know that in February 2014 when he allowed to the dollar to 'jump over the moon'.

But an expensive dollar did not take the EU's economy off of life support and a year later the ECB is embracing QE while the Secretary of Commerce complains the dollar is too high. If Europe is going to get QE, they don't need bargain basement exports any more. It's as simple as that. The only question now is whether QE in the European markets will cause a sell-off in the American ones, and a flight of capital looking for a repeat of the NYSE in Frankfurt.
Thu, 01/22/2015 - 14:24 | 5693016 the not so migh...
the not so mighty maximiza's picture

Pritzker, from the Hyatt dynasty,  yeah she works for the .1% i think

Thu, 01/22/2015 - 14:35 | 5693063 lakecity55
lakecity55's picture

+1000!

 

Thu, 01/22/2015 - 14:25 | 5693022 PTR
Thu, 01/22/2015 - 14:28 | 5693029 Handful of Dust
Handful of Dust's picture

"Yes we can !"

Thu, 01/22/2015 - 14:28 | 5693032 bid the soldier...
bid the soldiers shoot's picture

The dollar went up for absolutely no reason.

It will come down for the same reason.

(With an assist from Sir Isaac Newton.)

 

Thu, 01/22/2015 - 14:32 | 5693049 Yen Cross
Yen Cross's picture

 I've seen this scenario played out so many times in the past. All the rats are on the same side of the ship and there's only one life raft.

Thu, 01/22/2015 - 14:57 | 5693139 stant
stant's picture

$ went from 93.38 to 94.08 since this morning

Thu, 01/22/2015 - 15:10 | 5693183 Yen Cross
Yen Cross's picture

The $ went to 94.45. It was expected, as the euro makes up over 25% of the DXY currency basket, and also dragged Cable with it.

Fri, 01/23/2015 - 02:49 | 5695449 rex-lacrymarum
rex-lacrymarum's picture

Correction: 57%

Thu, 01/22/2015 - 14:36 | 5693066 MrTouchdown
MrTouchdown's picture

Dollars are a major export and they just got a lot more expensive. Unless Russia succeeds - we'll be importing all that EU inflation so they can buy oil.

Thu, 01/22/2015 - 14:44 | 5693092 Downtoolong
Downtoolong's picture

Welcome to WWIII in the era of currency bombing raids.

I just wonder how long before the Fed starts printing it’s own versions of the CHF and CNY, fully backed by the U.S. Treasury Department.

Thu, 01/22/2015 - 14:51 | 5693114 Thisisbullishright
Thisisbullishright's picture

Everything is going to go along pretty much just fine.....until it DOESN'T!

Thu, 01/22/2015 - 14:53 | 5693126 JailBank
JailBank's picture

How will this aggression be answered?

Thu, 01/22/2015 - 14:56 | 5693133 Alberich
Alberich's picture

Outrageous! I was assured ECB QE was priced in. And EURUSD down 2% on the announcement?

Oh well. At least Syriza's victory this weekend is priced in.

Thu, 01/22/2015 - 14:57 | 5693138 silentboom
silentboom's picture

A strong dollar does not hurt our exports, a government full of shitheads regulating and taxing us to death does.

Thu, 01/22/2015 - 15:06 | 5693175 Madcow
Madcow's picture

Gov-Co should just go ahead and raise interest rates in the US and nuke the "emerging market" economies from orbit. Its the only way to be sure ... 

Thu, 01/22/2015 - 15:20 | 5693233 Duude
Duude's picture

The currency markets are pricing in both the open-ended nature of Draghi's statement and the consensus belief the Fed will start raising interest rates by June. If that consensus belief continues, the dollar will continue on an upward trajectory, and we should all plan on a European vacation this Summer.

Thu, 01/22/2015 - 15:35 | 5693300 1stepcloser
1stepcloser's picture

We should announce our own peg to the Euro.  Say 1.30 ish, then Blame all the world's problems on europe 

Thu, 01/22/2015 - 16:04 | 5693422 erk
erk's picture

Well  the US has been trying to get all the other countries to devalue their currencies ether voluntarily (EU,Japan, Swiss) or by force (eg. Russia) to make the $US look stronger when it's lost 97% of it's value in the past 100 years.  The US economy is failing, so this is an effort to keep the cheap imports coming when their QE printing press is taking a short break.

 

I want to see global deflation, I am sick of this debt driven perma-growth rubbish which is trashing our planet.

Thu, 01/22/2015 - 16:29 | 5693545 robertocarlos
robertocarlos's picture

So don't be surprised if you get a check in the mail from Uncle Sam for 100k dollars?

Thu, 01/22/2015 - 20:38 | 5694495 RMolineaux
RMolineaux's picture

Could we see some quantification of the prospective losses to speculators who are currently long the US dollar?  Who are these people and with whose money are they speculating?

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