Not only do we have noises from the EU regarding currency, but look at these charts of the Dollar/Yen.
Here's the daily chart making new lows. Japan is trying to keep their currency weak against the dollar and having a hard time of it.
Friday, October 8, 2010
A Volatile Day Ahead
13 comments:
It's tough to compete with the fed when it comes to debasing a currency!!!
What we may see happen is multiple countries trying to devalue their currency against the dollar. It makes sense as a strong dollar makes oil and other commodities more affordable in the global market. It also allows them to be more competitive in the global market. Multiple attacks accross the globe of the dollar might be on the way. Strong dollar, weak stock market.
The dollar will be one of the strongest performing markets over the next two years. I also think that T bonds will be strong performers.
An interesting conundrum and unintentional consequence of globalization?? Race to the bottom on fiat currencies? Amazing how NOONE wants a relatively strong currency in a globalized economy, huh?????
The FED can't fight the entire global market, but may try and print as fast as it can. Doesn't paint a pretty picture at all, hang on to your silver and gold.
Jack,
Holding on to silver and gold (except for a small core position) will likely be one of the worst things you can do these next 2 years. The US Dollar is still the king in times of trouble. What 3C has been showing is major distribution in GLD since April. The smart money is out or getting out. Gold has possibly just completed a nearly 10 year parabolic move up and all the fear and QE has already been priced in. The big players are counting on the extremely strong bullish sentiment on gold and silver as the key to tank it big. Why can't the gold bugs that are on nearly every site see that their strong feelings for gold are what is going to doom it going forward. Remember Jack that the market will always do what will hurt the most people, especially the small traders and retailers. Gold tanking the next year or two would hurt the most people by far. For this reason alone, you can count on it happening.
Signed, a reformed former gold bug
And I would add that the consistent underperformance of mining shares versus gold is a MAJOR sign of trouble for gold going forward. The divergences on gold are huge in every respect and the sentiment is the icing on the cake. Because retail sentiment on gold is so universally bullish, I can see a 50% to 61.8% retracement of the entire near 10 year bull move happening before gold can resume an up trend. That is the kind of move down that would get me interested in gold again.
I just wish that everyone would see the danger of investing in gold at this time. It is not a special asset that will rise no matter what. It is, in this day an age, a speculative asset like any other and it is the flavor of the day. I see danger ahead for gold bugs and it will be a painful experience for them.
Alesund, thanks but I should clarify. I wasn't trying to imply silver and gold as in investment. Hard physical asset only to protect against dollar devaluation. As an investmnent, (if I wasn't worried about the currency trade) I would be short gold and silver through an ETF and buying the physical asset with the proceeds as it pulls back.
Talk about one over manipulated market. Todays action this morning would imply that we are not ready to let the market freefall. Either something big is yet to come or they need more short positions. Driving it right back to that 116.2 area again. What is it going to be? Guess we will know when we know at this point, but I sure wish it would rear it's ugly head soon.
Jack looks like they needed to get a running start at the 116.2 that's what they've been doing bring it down a nd try to suck in shorts and then ram it hard.
Somebody is defending the 116.2 area. Maybe that is where they are adding to their shorts at, but is implying that they do not what it above that area.
Liquidity isn't the issue! EVERYTHING is up today!
they're using tech tho big time!
Well they pushed through, lets see what happens now.
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