This page has been archived and commenting is disabled.

Did Goldman Just Call The Top Of The "Strong Dollar" Trade

Tyler Durden's picture




 

It is perhaps ironic that two days after Goldman Sachs, on Friday evening, acknowledged that hopes for a June rate hike by the Fed have now been dashed...

Primarily because of our below-consensus inflation call, we continue to expect a later-than-consensus first hike. As Exhibit 8 shows, most forecasters continue to expect a first hike in June, in line with the clustering of Fed officials around “mid-2015” as a likely liftoff date. Our baseline remains September, and we view the risks as increasingly skewed to the later side. If core inflation falls as low as 1%, we think that the liftoff would probably move into 2016.

 

... a forecast that only the most confused macro-economists, and Virtu's FX algos of course, thought was credible and one which is about to be thoroughly voided now that Winter Storm Juno is about to unleash the first blizzard of 2015 over New York City and the northeast perhaps "forcing" the Fed to follow the ECB, Denmark and the SNB into all-out NIRP territory, that Goldman has decided to release a report, in which it it says that "recent moves and ECB easing do not signal the beginning of the end" for the USD surge in recent months, adding that "These moves will run a lot more. They are 'the end of the beginning'."

It is by now clear to most that one of, if not the main drivers of the unprecedented USD strength in the face of a global deflation and economic deterioration in the past 6 months, has been due to the Fed's optimism that the US economy and US corporations are strong enough to sustain a rate hike and a much stronger dollar.

Well, if the Fed is about to admit that is not the case, what happens to the strong USD case? It falls apart of course, especially since as we also noted last week, the US commerce secretary said the US is now actively looking at the "strong dollar." It also means that being long the USD - the most consensus trade of 2015 alongside being short USTs (again) - is about to fall apart. However, for that to happen, the big banks need to be able to offload their long-USD exposure on someone, preferably muppets.

Which explains the extensive note Goldman has released this morning, cited above, and titled dramatically enough, "The End Of The Beginning."

This is what Goldman has to say in order to assure that clients flood Goldman's prop pardon flow traders with "Buy USD" orders: orders which Goldman, being on the other side, will be delighted to fill.

1. Foreign exchange rates are trending in a big way, after many range-bound years. This change is difficult to embrace. After all, as much as markets like to think of themselves as forward-looking, the truth is that we are all backward-looking to some degree and update our perception of the world only gradually (economists call this adaptive expectations). In the current setting, where we have transitioned from a range-bound to a trending market, this means pushing back against the instinct to wait for the pull-back, the positioning wash-out, the correction. This is not to say that corrections won’t happen. They surely will. But in a trending market those corrections may happen at levels that are even less appealing than where the market currently is. Of course, reluctance to embrace the trend also reflects something else: skepticism that the trend has further to run. On this we would make two points. First, while the Dollar has strengthened about 17 percent since the middle of last year, this is from very depressed levels and it is still below the historical average (Exhibit 1). Second, unprecedented easing from the Fed has kept the USD below where it otherwise would have been. In an FX Views almost a year ago, we estimated the “unobstructed” level of the Dollar 13 percent stronger, obviously not counting the dramatic ECB and BoJ easings that have come since then. There is still plenty of Dollar upside on this metric, as the 2-year differential continues to move higher (Exhibit 2). In short, recent moves and ECB easing do not signal “the beginning of the end.” These moves will run a lot more. They are “the end of the beginning.”

 

 

2. We – like everyone else – have struggled to adapt our mindset fast enough. Although we embraced Euro downside earlier than most (Exhibit 3), the speed of the move has surprised even us. That said, our forecasts foresee a sustained and prolonged weakening of the single currency to 0.90 in 2017. There are many pushbacks to this view, including that downside is heavily positioned and that the current account surplus of the Euro zone puts a floor under EUR/$. We have consistently argued that positioning is light and think recent price action validates this. With respect to the current account, we think there is a conceptual misunderstanding. Exchange rates, like all market prices, incorporate expectations for things, including the current account. The mere existence of a surplus therefore does not push EUR/$ higher, while a surprise to the upside – a larger than expected surplus – does. Our expectation is that QE will ease financial conditions on the periphery, allowing consumption to rebound from depressed levels. That will tend to widen Euro periphery current account deficits back out, capping any improvement that may come from Euro weakening. In short, we believe the current account is a sideshow. In contrast, we think these things are important:

  • The Euro has spent many years significantly above fair value, including post-2012 when the OMT pushed the EUR/$ up from 1.20 to near 1.40 (Exhibit 4), a large deflationary shock that was an unintended side-effect of “whatever it takes.” Cyclical underperformance vis-à-vis the US, the regime break at the ECB as evidenced by QE and still significantly overvalued real exchange rates on the periphery all now point to a significant undershooting of fair value, in line with our longer term forecasts.

  • The market is focused on whether QE will attract foreign flows into the Euro zone, presumably because OMT caused such a large rebound. We make two observations. Gross foreign portfolio inflows into the Euro zone look to have remained very strong in the run-up to QE (Exhibit 5). Even if QE attracts more inflows, given how elevated foreign inflows already are, we don’t think the upside for the Euro from this source is large. In contrast, gross portfolio outflows by Euro zone residents have been steadily picking up (Exhibit 6), to such an extent that the 12-month average is now negative (meaning more portfolio outflows than inflows). The regime break at the ECB will cause outflows to gather pace in coming months, sustaining the decline in EUR/$.

 

3. The nice thing about EUR/$ downside is that it has been, and continues to be, an idiosyncratic story, not just a Dollar bull story. This week’s rate cut from the Bank of Canada (BoC) moves the Canadian Dollar from a beta play on the Dollar back into the idiosyncratic camp. That is because the cut is something of a regime break (Exhibit 7), whereby the BoC in the past has closely shadowed the Fed, but broke from tradition this week. The reason is the drop in oil prices is on balance a negative for Canada, in contrast to the US, as Deputy Governor Lane laid out in a speech in the run-up to the meeting. That negative is not yet fully reflected in the BoC’s latest forecasts, which assume Brent at $60, which is why Governor Poloz left another rate cut on the table in last week’s press conference (Exhibit 8). We think the regime break and downside to the BoC forecasts sets the stage for more Canadian Dollar weakness, and revise our forecasts for $/CAD to 1.28, 1.30 and 1.32 on a 3-, 6- and 12-month horizon (from 1.19, 1.20 and 1.22, respectively), as well as 1.36 end-2016 and 1.40 end-2017 (from 1.24 and 1.26, respectively).

 

 

 

4. We also revise our EUR/CHF forecast to 0.98, 0.96 and 0.95 on a 3-, 6- and 12-month horizon following the SNB surprise two weeks ago (from 1.25, 1.28 and 1.28, respectively). The SNB sent two messages with its decision to de-peg: (i) it has revised its expectations for EUR/$ materially lower, making a peg to the single currency (and the potential reserve accumulation involved) unattractive; and (ii) its decision to cut its target range for 3-month Libor reflects a distaste for intervention in the near term, in essence shifting monetary policy back to interest rates from balance sheet expansion. We believe therefore that the near term path of EUR/CHF is lower, given that the safe haven status of the Swiss Franc has emerged stronger from recent developments. In the longer term, we think EUR/CHF will revert towards fair value (around 1.40 on our GSDEER), so that we put our end-2016 forecast at 1.00 and end-2017 at 1.10 (from 1.29 and 1.30, respectively).

And with that, Goldman will be delighted to sell you all the USD you have to buy.

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Sun, 01/25/2015 - 12:00 | 5702018 Publicus
Publicus's picture

I see Goldman is preparing the muppets for slaughter again.

 

 

The dollar is going to get stronger and stronger into World War 3. Then, after the war is lost, the dollar will cease to exists.

 

Prepare yourselves, the Crisis of 2020 is coming.

Sun, 01/25/2015 - 12:04 | 5702033 Cognitive Dissonance
Cognitive Dissonance's picture

'I love muppet stew with dumplings.' -Goldman

Sun, 01/25/2015 - 12:08 | 5702039 observer007
observer007's picture

GREECE will CRASH the EURO

A Syriza government in Greece

After five years of extreme austerity prescribed to treat an epidemic of debt, a battered but defiant Greece appeared poised Sunday to reject the medicine. With millions of voters turning out from graffiti-scarred lanes in the Parthenon’s shadow…

latest:

http://tersee.com/#!q=greece&t=text

Sun, 01/25/2015 - 12:20 | 5702065 Headbanger
Headbanger's picture

Baffle em with bullshit beyond belief is what it is..

Fact is, China will un-peg the Yuan versus dollar if it starts losing value just like SNB dumped the Euro.

 

Sun, 01/25/2015 - 12:31 | 5702101 BaBaBouy
BaBaBouy's picture

All These NICE ROSY Fiats Forecasts, While They Frantically Fuck The GOLD Price Down, Sweat Pouring From Their Brows...

Sun, 01/25/2015 - 12:41 | 5702156 Beam Me Up Scotty
Beam Me Up Scotty's picture

"Then, after the war is lost, the dollar will cease to exists"

Along with everyone and everything else on the planet.  There will be rubble as far as the eye can see, and no one around to see it.  After all the nuclear bombs go off, the nuclear reactors all melt down.  The biosphere won't support much life for awhile--like a few million years probably.

Sun, 01/25/2015 - 14:17 | 5702684 Save_America1st
Save_America1st's picture

Well then we better party like it's 1999 again before it's too fucking late, ay?

Hookers and blow for everybody!!!

Keep stackin' that phyzz, folks...

Sun, 01/25/2015 - 14:46 | 5702788 Pool Shark
Pool Shark's picture

 

 

Goldman just told Muppets to go long the US$?

Oh, great. Now I have to sell all my dollar longs...

 

Sun, 01/25/2015 - 17:05 | 5703252 daveO
daveO's picture

It's a 30 years wedge pattern that's being broken. This article's calling for a reversal to the downside when the current rally's complete. That down move would, no doubt, coincide with the next QE.

http://tradermc.com/articles/dollar-gold-elliott-wave-projection/

http://tradermc.com/wp-content/uploads/2014/09/US-Dollar-Long-Term-Ellio...

 

Sun, 01/25/2015 - 13:22 | 5702405 KnuckleDragger-X
KnuckleDragger-X's picture

China will probably unpeg but I don't think fully floating their paper will have the effect they think it will and the Euro crossing parity with the dollar will really confuse things. Good times.....

Sun, 01/25/2015 - 13:18 | 5702383 ...out of space
...out of space's picture

greek crash the euro

eu blame the greek for euro crash

Sun, 01/25/2015 - 13:24 | 5702411 KnuckleDragger-X
KnuckleDragger-X's picture

Of course they'll blame Greece, they can't blame the true culprits after all...

Sun, 01/25/2015 - 12:58 | 5702261 indygo55
indygo55's picture

Publicus, Why do you think 2020 is the year? It seems that 2015-16 is the target. ALl the cycles and that thing called Shemitah as kooky as it sounds shows a lot of convergences in the current period. The cycles are amazing. And with all these wars being drummed up, the SNB action, the oil price drama, ect, ect, it looks like everything is going down,,, well,,, now!

Sun, 01/25/2015 - 12:02 | 5702026 Mac Avelli
Mac Avelli's picture

I stopped reading part way through when I realized that the only thing that matters is-

"if Goldman advises to do something, do the opposite"

Sun, 01/25/2015 - 12:16 | 5702055 El Vaquero
El Vaquero's picture

If you could, you would be better off looking at how GS is actually positioning itself.  If GS can make more money on a trade telling the muppets what they think is really going to happen, they will.  If GS can only make money fleecing the muppets, they will be fleeced.  If GS can figure out how to tell the muppets what is going to happen, and yet somehow fleece them, they will.  Normally, setting the muppets up on the wrong side of the trade is their easiest option, but never assume if you have lots of money in play.  Squids are slippery and slimy.

Sun, 01/25/2015 - 12:34 | 5702114 DeadFred
DeadFred's picture

Rumors are that Goldman lost money on the Swiss depegging move. If true this means the tentacles of the squid are shorter and weaker than we think, at least shorter than I thought. I'm still betting the rally continues and this will be one of those rare times that GS gives advice that actually is true. Even Stolper got one trade correct.

Sun, 01/25/2015 - 13:09 | 5702326 rogerrabbithole
rogerrabbithole's picture

I don't believe they could have. Soros got out within 48 hours. If he knew, I'd bet that Goldman's slimey ass knew.

 

Sun, 01/25/2015 - 17:48 | 5703485 TruthHunter
TruthHunter's picture

Maybe it was Soros' guy waiting back in the office with a nail gun.

Thomas Gordon acted awful tongue tied.

Sun, 01/25/2015 - 12:45 | 5702173 seek
seek's picture

"if Goldman publicly advises to do something, do the opposite"

That's the key. Plenty of private customers -- key ones -- are on the other sides of the muppet trade as well as goldman itself.

 

Sun, 01/25/2015 - 13:37 | 5702486 Mac Avelli
Mac Avelli's picture

thank you "seek" and others for clarifying and expanding on my comment.

If only our little comment section could cause effective change, the world would be a better place.

Sun, 01/25/2015 - 12:04 | 5702032 BobPaulson
BobPaulson's picture

Can somebody explain why Muppet investors keep coming back for more?  Stockholm syndrome? 

Sun, 01/25/2015 - 12:06 | 5702036 The man with po...
The man with pointy horns's picture

You say when he hits you, you don't mind
Because when he hurts you, you feel alive

Sun, 01/25/2015 - 12:43 | 5702166 p00k1e
p00k1e's picture

I thought is was Jesus, mom and apple pies??

Sun, 01/25/2015 - 12:59 | 5702272 Fed-up with bei...
Fed-up with being Sick and Tired's picture

Delicious comment.

Sun, 01/25/2015 - 13:01 | 5702274 Fed-up with bei...
Fed-up with being Sick and Tired's picture

Delicious comment.

Sun, 01/25/2015 - 12:18 | 5702062 El Vaquero
El Vaquero's picture

Because it's The Goldman Sachs!  Their prestigious and rich, and the muppets want to be just like them!

 

That, and maybe it's tough on the ego to admit that you've been scammed multiple times.  Fool me once, shame on you, fool me twice...

Sun, 01/25/2015 - 12:56 | 5702245 New Kid
New Kid's picture

Is it possible that retirement fund managers have been bribed to do Goldmans bidding?

Sun, 01/25/2015 - 17:07 | 5703279 daveO
daveO's picture

No need to bribe your own tribe.

Sun, 01/25/2015 - 12:15 | 5702043 techstrategy
techstrategy's picture

It's laughable to read the GS stuff.  These guys have abused "infinite"/asymmetric leverage from QE to run a 30 month pain trade IMHO, as all TBTJ banks simply deposited QE to collect IOER while selling volatility, taking the market up on declining volume and starving the real economy.  The root cause of all our economic pain is the phantom AND SENIOR claims on real flows of value from fractional reserve banking that concentrate financial " wealth " and control in the banking sector over time via front-running boom/bust cycles, exactly as GS is trying to do here.

They paint the tape by manipulating float/vol and exploit cognitive biases (anchoring) while always front-running the trades...

 

The entire TBTJ fractional reserve banking system is a financial asset ponzi.  The way to win with certainty is to convert the fraudulent financial v assets to hard cash and gold as financial assets are certain to lose value in real terms over time.

Sun, 01/25/2015 - 12:51 | 5702214 lakecity55
lakecity55's picture

I have a cunning plan, Lloyd. We suggest investments to our clients, then do the reverse and steal all their money.

OK, but you have to let a % get some money to make it work big.

Sun, 01/25/2015 - 14:04 | 5702612 Fun Facts
Fun Facts's picture

Goldman Sachs stole 98% of Libya's 1 billion sovereign wealth fund [they politely called them investment losses], then they hired the US army to attack, put Khadafi's head on a pole and they stole his substantial 144 tons of gold too.

It's all legal, you see. Because Goldman Sachs and their ZWO make the rules.

Sun, 01/25/2015 - 14:11 | 5702653 disabledvet
disabledvet's picture

"Just make sure all our Government minders are good with that and its a go.  We'll pay off every other Government type globally to make sure they bankrupt their States and Countries too and then arrange for the usual bailouts etc, etc with Goldman getting first dibs on everything.

 

Sounds like a plan.  Let's do it!"

Sun, 01/25/2015 - 12:16 | 5702060 bnbdnb
bnbdnb's picture

USD will continue winning.

Sun, 01/25/2015 - 12:21 | 5702068 remain calm
remain calm's picture

Why no mention of the USD/YEN relationship. They know Japan is the ticking time bomb so they avoid it like it is not there and will go away. It is the death knell of Keynesian economics and our current global economic monetary system

Sun, 01/25/2015 - 12:21 | 5702071 stant
stant's picture

The dalla is going ballistic from here. Then kaboom

Sun, 01/25/2015 - 12:39 | 5702137 Consuelo
Consuelo's picture

Jim Willie's metaphor of the $USD 'rocket' seems appropriate here.

Sun, 01/25/2015 - 14:15 | 5702667 seek
seek's picture

It'll be very interesting to see how the gold price is managed in USD terms when this happens. It's not clear that driving gold down makes sense if the dollar's value rockets, so perhaps they let it rise a little.

Sun, 01/25/2015 - 17:19 | 5703307 daveO
daveO's picture

It'll be another April 2013 sell of stored gold after the dollar turns south (on QE).

http://blogs.wsj.com/washwire/2013/04/11/full-list-of-bankers-at-white-h...

Who knows how much is left, at this point. They have less now than back then, for sure.

Sun, 01/25/2015 - 12:23 | 5702075 Last of the Mid...
Last of the Middle Class's picture

predicting markets and controlling markets are two different things. We've been in the controlling era for a long time now and that is what will end badly, not for the bankers, but for the people they hang their losses on via printing, QE, TBTF, etc.

Sun, 01/25/2015 - 12:58 | 5702262 El Vaquero
El Vaquero's picture

Not even the banksters are going to get out of this one unscathed. They will try through whatever bribes and manipulations that they can muster, but in the end, they'll be squealing like stuck hogs when the spice stops flowing.

Sun, 01/25/2015 - 12:28 | 5702085 Yen Cross
Yen Cross's picture

 And suddenly a million rats called out in horror as the S.S. Ratanic sank. Haha

Sun, 01/25/2015 - 13:10 | 5702321 El Vaquero
El Vaquero's picture

That is no iceberg.

Sun, 01/25/2015 - 12:36 | 5702123 p00k1e
p00k1e's picture

The dolla is going to supernova.

You watch.

The FED’s will buy what’s left of the planet when this happens...  or we'll all be dead. 

Sun, 01/25/2015 - 12:42 | 5702165 Yen Cross
Yen Cross's picture

 The Greek vote is already largely priced in. The Greeks aren't going to leave the EU. They're just going to hold the Troika hostage for better borrowing terms. The ECB doesn't even start implementing QE for over a month, and their balance sheet is much smaller than the Feds.

 Most important is emerging markets that have borrowed in $usd are cracking at the seams, and the energy sector is getting drilled like a $2.00 hooker.

Sun, 01/25/2015 - 13:01 | 5702275 El Vaquero
El Vaquero's picture

The best way to prevent somebody from calling your bluff is to not be bluffing.  If the Greeks are going to hold the Troika hostage, they had better be willing to pull the trigger in earnest. 

Sun, 01/25/2015 - 12:44 | 5702174 Consuelo
Consuelo's picture

At first I wondered if this piece was written by Brown Brothers Harriman...

And what about this statement: "The Euro has spent many years significantly above fair value"...    

But nowhere in the piece did anyone from GS explain how that 'fair value' is determined, vis-a-vis the $DX vs. the Euro.

Sun, 01/25/2015 - 12:55 | 5702237 Government need...
Government needs you to pay taxes's picture

I bet the Goldman moneywhores ripoff the US government as well.  But only a "little" bit, to do God's work. . .

How awesome would it be if 200 West St had to pick 6 'Burghers of Calais'.  You'd see 6 secretaries/janitors being shoved out the front door.

Sun, 01/25/2015 - 12:57 | 5702249 oudinot
oudinot's picture

The dollar has a ways to go as oil derivatives trades get paid off in American dollars which is bullish for the FRN.

But, this will be just a blip 6 -9? months on the dollars' continual decline.

Even climbing as much as it had the last 6 months or so, gold did better.

Sun, 01/25/2015 - 13:10 | 5702333 Atomizer
Atomizer's picture

Blankfein should've worn his poker playing black sunglasses during all Davos summit interviews. The cat is out of the bag. 

/lol 

Sun, 01/25/2015 - 13:27 | 5702422 roadhazard
roadhazard's picture

I think the dollar will remain strong as long as people in other countries flee to it for safety.

Sun, 01/25/2015 - 14:01 | 5702543 Atomizer
Atomizer's picture

That's exactly how they play the propaganda of janda to pay off derivative invoices. 

Sun, 01/25/2015 - 17:24 | 5703343 daveO
daveO's picture

Nah, just until the next round of counterfeiting (QE).

Sun, 01/25/2015 - 13:42 | 5702498 Rodders75
Rodders75's picture

Sum Ting Wong

Sun, 01/25/2015 - 13:39 | 5702506 Raoul_Luke
Raoul_Luke's picture

Probably so.  If the commodities (and long rates) are correct (and they usually are) the "recovery" in America has yet to reach "escape velocity."  That should put off the Fed rate hike and maybe even bring talk of QE-V.  And that will stop the dollar dead in its tracks...

Sun, 01/25/2015 - 13:48 | 5702541 Mac Avelli
Mac Avelli's picture

The FED can't raise rates in the face of global interest rate cuts. We are already the cleanest dirty shirt, so the dollar will remain strong even as interest rates continue dropping to zero/going negative. 

The FED should take a page from the doctors oath "first, do no harm"... why are we even doing rate cuts and flooding big banks with printed or digitalized money!?! It's like a magicians sleight of hand with us all looking at central bank monetary policy, when really we need to see politicians making genuine tax reform, regulatory reform, and analysis of demographics, to solve problems. Not just wondering if next month, a bunch of unelected bankers meeting in secret and announcing a cut in interest rates will be good for the economy.

And for anyone that dismisses trickle down economics as failed policy of old Republicans, how is that any different than giving cheap money to big bankers and corporations in the hope that their improved balance sheets will somehow mean that the average joe gets a meaningful improvement in their standard of living?! That's what were seeing now, but somehow it's "good" this time when it wasn't before, and these are good leaders and Reagan was "bad"???

Sun, 01/25/2015 - 14:53 | 5702811 Raoul_Luke
Raoul_Luke's picture

Exactly correct! I've been banging this drum for a while - QE and ZIRP are demand side "trickle down" policies that have failed as badly as the tax cuts for the rich (at least when paired with increased deferred taxation in the form of the deficit) did for the (supposed) supply siders!  Clinton was the best supply side President we ever had - sure he raised some tax rates but he lowered expectations of ever bigger government (and future taxation), reduced regulation and supported the strong dollar policies of the Fed at the time (before Greenspan went full retard Keynesian).  And the economy did pretty well...

Sun, 01/25/2015 - 17:31 | 5703379 daveO
daveO's picture

The dollar didn't go up until after the Rep's took back congress. The market knew the bloated federal deficit would pared. Politically, similar to now, but before counterfeiting (QE). This time, the Rep's have already failed.

Here's a the chart.

http://tradermc.com/wp-content/uploads/2014/09/US-Dollar-Long-Term-Ellio...

 

Sun, 01/25/2015 - 14:03 | 5702614 dondonsurvelo
dondonsurvelo's picture

So where is capital going to flow? Europe? China? Japan? Emerging markets?  Capital is going to continue to flow where it is felt to be the safest and that will be the US dollar.

Sun, 01/25/2015 - 14:10 | 5702644 Catullus
Catullus's picture

And buy what? Euros? Yen? EM?

Might as well just go bullish US equities. Going to 3000 on the S&P.

Sun, 01/25/2015 - 15:58 | 5703032 CHX
CHX's picture

Ag 'n Au

Sun, 01/25/2015 - 14:33 | 5702738 dragoneyes74
Sun, 01/25/2015 - 14:53 | 5702810 buzzsaw99
buzzsaw99's picture

very cunning. start out with a tidbit of truthiness then go in for the kill at the end.

Sun, 01/25/2015 - 16:10 | 5703078 NoWayJose
NoWayJose's picture

Goldman is buying its time and setting up its December 2015 bonus checks. The story is SO easy to predict -- Fed cannot raise rates, US economy stinks, US dollar falls - meaning that gold goes up, oil goes up (due to some phony demand/production numbers), copper and other commodities go up (due to weak dollar), commodity currencies rise against the dollar... Etc.. Etc... Fed announces QE4!

Sun, 01/25/2015 - 16:21 | 5703122 Quinvarius
Quinvarius's picture

Sounds like US QE could be back in this FOMC meeting.  The whole world is in full on meltdown.  How are the bankers going to get paid?

Sun, 01/25/2015 - 16:24 | 5703124 Ban KKiller
Ban KKiller's picture

Raise interest rates? That tactic is for pussies! 

Can you protect the things you think you own? 

Sun, 01/25/2015 - 17:40 | 5703437 Herdee
Herdee's picture

So,who owns the Federal Reserve and who are the Banks or entities that control it and why is it an ongoing secret in a so-called democracy? Not even The President of The United States has the goddamn guts to tell anyone who controls The Fed.Is Jim Willie of SilverDoctors right when he says that his sources tell him that now the Chinese have controlling interest in The Fed?I'm not concerned about just what Goldman is saying because who the hell is telling them?The 2008 crisis was designed to save Goldman.

Sun, 01/25/2015 - 20:21 | 5704127 VAD
VAD's picture

I've wondered for many years now how the fuck GS has any clients left at all.  I guess there's a sucker born every minute.

Sun, 01/25/2015 - 20:35 | 5704195 bid the soldier...
bid the soldiers shoot's picture

IMHO, the strength of the dollar today is correlative to the weakness of the ruble, the pressing of NATO's missile shield up to the very boundary of Russia, the coup in Kiev last February, the Battle of Donbas, The EU's sanctions on Russia, et cetera, et cetera.

David Stockman, no doubt,  could put the the beginnings of the Civil War in Eastern Ukraine much more eloquently than this: but it started when George W Bush withdrew the US from the ABM treaty.

The ex-Eastern European nations of the USSR were invited to join the EU and NATO and saw their cash flow increase.  Soon after, the US developed anti-missile technology which it sold to the old communist satellites.   Anti-ICBM Patriot missiles for a portion of their new found income.

Push came to shove.  Georgia.

And in November 2013 the Maidan filled up with bought and paid for Nazis, whom the US and NATO welcomed like long lost brothers.  Yanukovych fled.  The Nazis took over Ukraine with the blessing of the US and the UN.

MIRABILE DICTU

The US dollar, which had been weakened by the FED for the past 12 years in order to sell US exports,  suddenly became tumescent.  Just like that.  As if Obama reached into his pants pocket to shake his change but found something better to shake. 

And like Obama's swollen dick, the dollar continues to become engorged. But not with the black blood in Obama.  The dollar became engorged with bullshit.  And still is.

What bullshit?  Why the pretense that the strong dollar has nothing to do with the weakening ruble.

FX 101

 When your central bank sells rubles and buy dollars, what happens to the price of rubles?  And the price of dollars?   

And when all your lackey central banks and corporations holding rubles do the same?

Eventually the central banks and the corporations run out of rubles to sell.  But the pressure on the ruble must be kept up.  Russia has not been sufficiently punished for questioning the authority of the West.  

COMES NOW  GOLDMAN SACHS

 "What should we do to keep the dollar from falling apart?" Janet Yellen asked Stanley Fischer.  "I'll call Blankfein."  A few minutes later: 

Goldman has decided to release a report, in which it it says that "recent moves and ECB easing do not signal the beginning of the end" for the USD surge in recent months, adding that "These moves will run a lot more. They are 'the end of the beginning'."

 

So good old Goldman gets its rich American customers to pile into the USD to keep the dollar's tumescence hard and firm and oily like it was on the Viagra that all the GS traders take.  

 

Sun, 01/25/2015 - 23:04 | 5704730 theyjustcantstop
theyjustcantstop's picture

you have to love it, when goldman speaks, with the words our, and we when stating what the fed. actions will be.

then herd up the sheep, then fleece them on the trades they make.

 

 

Do NOT follow this link or you will be banned from the site!