The following is from today's Fleck:
A Trapped Fed: Key to Dollar's Trap Door
As I was thinking about the best way to put all this into perspective, I received an email from my favorite foreign-exchange observer. I found his synopsis so succinct and on-the-money that I wanted to share it, rather than offer one myself:
"Outlook: $ stays firm(ish) until the market starts to focus on the data, rather than nonsense Fed is feeding them. THEN Treasurys start to rally hard, 10-year back below 4%, back-end euro-dollars take off. THEN, at the same time, the dollar starts turning south again hard, regardless of problems within euroland (which will escalate, by the way, in the months ahead). THEN equities, which have been under pressure for months, start to fall dramatically. THEN, the housing sector gets whacked. THEN Greenspan, desperate to maintain some sort of legacy, starts trash-talking the dollar, finally realizing that he is trapped. THEN this entire cycle feeds on itself. THEN gold goes ballistic. Patience still required, but that is where I see it going, in a nutshell." That's about how I see it going, too. |
