Very bearish action in the buck this Friday, the
inability to rally on large interest rate revision due
to "cooked to perfection" jobs report, which
was, of course, buck-positive. If it starts
dropping 1% a day now, the game is truly over. Maybe it's
too early to tell, we'll see next week, when gold
is "supposed" to drop, buck to rally. If it doesn't, oh
well... that means foreigners
are finally walking away from USD assets, which can't be
bullish for anything - bonds, stocks, and, of course, the
dollar. It will be the dollar run, with buck dropping 1% per
day, TNX skying, stocks eventually dropping like a rock.
Trillions could be exiting the jammed door, thanks to Ben who
screwed our foreign creditors for years. We were always
wondering "when" or "what will
be the trigger?". Personally, I think the rate cut on September
18 could have been the trigger, as BB lost credibility with
our foreign creditors. As the buck was sitting just over
LT support of 80, BB dropped a 50bp. cut on it, proving
that the Fed just does not care. There is simply no way the
Fed can stop a dollar run if it happens. The Fed can't print
foreign currency. The Fed does not have any foreign currency
reserves.
Yes, the buck is supposed to bounce. However, with trillions
sitting and getting screwed by BB's action to bail out WS,
if these trillions in foreign money truly started to walk
away from USD assets, then the game is over. |
