Monday, September 15, 2014

The Dollar Rally Won't Give Up the Ghost

The rally in the dollar just won't give it up.

This is as the many of the technical measures are flattening on the momentum side, and have been, while flashing the recent price rise has moved to more extreme levels relative to the recent past. However, this move in the dollar makes sense in regards to the analogy of saying the ugly sister looks beautiful relative to her even worse off siblings. Just look at the price trends of the British Pound, the Euro, and the Yen.




A virtual litany of who's-who in money printing and currency debasement. By proxy, and despite the unlikely event the Fed will reduce an overly bloated balance sheet that stands leveraged over 50-to-1, the dollar is the winner. When seeing this dynamic, I am reminded of comments from many Austrians For instance, like the comments from Jim Roger's below. 

“Brazil, China and Russia could easily put something together to compete with the US dollar,” Rogers said, leaving out one component of the BRICs alliance. “The US dollar is a terribly flawed currency. I’m an American. I hate to say that. But the US has serious problems, the world has serious problems. We need something else” and potentially a competing world currency could be developed. If this were to occur, the US and its economy might be put in a straight jacket as the ability to engage in large deficit spending could be curtailed." 

For now, the ugly sister that is the dollar is winning, but that does not make her pretty.

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