Tag Archives: USD

The U.S. Dollar Index has fallen through support at 80 once again. If this current decline trend continues it will drop below 79.20 for the first time in nearly two years. This could pave the way for a deeper decline below the 76 level and signal a continuation of the downtrend that started in 2002.

The American dollar will be overthrown...in as short a period as 5 to 10 years says one analyst while another believes it will happen as early as 2015, 2016 latest. Here's why.

Over the next couple of months everything should generally rise together but once the dollar puts in an intermediate bottom sometime in March or April, commodities and gold will move down into an intermediate correction as the stock market completes its final blow off top. After the stock market parabola collapses later this summer it will be time to put the pedal to the metal in the commodity markets, and especially the precious metal markets as the Great Inflation begins in earnest.

Do you think the USD is still on top? What makes a currency strong isn’t necessarily what makes it popular or valuable, as you’re about to read.

Finance executives in Asia see the writing on the wall. They can see that the dollar is in a period of terminal decline, and that the Chinese renminbi is going to take tremendous market share away from the dollar - and they want a big piece of the action. To that end representatives of the Hong Kong Exchange and the Singapore Exchange, THE two dominant financial centers in Asia, have signed an agreement to combine their forces in rolling out more financial products denominated in Chinese renminbi. This has massive consequences for the global financial system - and the future of the U.S. dollar.

Nearly all markets except the dollar reacted rather badly to Ben Bernanke's news conference – even though it actually contained no news - Treasury yields soared, stocks were whacked, and so was gold. While the charts certainly don't look good in the short term, though, it should be pointed out though that investors with a longer time horizon probably won't make a big mistake by buying on weakness. That being said, however, in the short term all the tentative evidence that a bottoming process may be under way has by now been eradicated. Below are a number of charts illustrating the situation.

Stocks are up. Bonds are expensive. Dollar cash is unlikely to preserve purchasing power in an environment of negative real rates. Diversifying to a basket of hard currencies might help to mitigate some of the risks out there. It clearly adds currency risk but in an environment where there may not be such a thing as a risk free asset, it might be a risk worth pursuing...

Sentiment in the precious metals sector is in the toilet yet the fundamentals for the sector are off the walls positive. That is not secret, but it is what creates huge market moves in the direction of the fundamentals. In fact, market management will never move price against the underlying fundamentals for too long a period of time.

The U.S. Dollar Index took a breather on Thursday on its apparent way down and through its support line of 79.00 closing the day at 79.26 vs. 79.27 on Wednesday well below its 50 day moving average of 80.16.

The election is now behind us and I pray our elected officials can come together and make quality decisions to move this country forward in a positive direction. [That being said, how the U.S. Dollar Index reacts over the short term] is going to be very important for portfolio construction in the weeks and months ahead! [Let's take a look at what the following charts say on the subject.] Words: 225