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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: blazenzim who wrote (92776)3/26/2008 12:30:39 PM
From: TH  Read Replies (1) of 110194
 
blazenzim,

<dollar bearishness is way overdone short/intermediate term.>

I find such comments interesting. It is as if thinking a thing can make it so. Certainly this concept has proven effective with some of the excessive valuations we have seen in certain equity sectors over the past few years. But, in this case I wonder if it is realization that the ILLUSION is false that is driving dollar weakness.

Maybe the conviction of recognizing a false belief is stronger than the conviction of the opposite.

It is my opinion that dollar bearishness is something resisted by the status quo until there is no viable alternative. And that widespread recognition feeds upon itself. Maybe until it reaches an extreme, which is what I think your point is, or maybe until it reaches some valuation that is justified. And that I believe is the reason we will see dollar weakness continue. The real value of the US Dollar is probably a good bit lower than the present value.

I guess my real point is that a currency reversal from a downtrend requires actual fundamental improvement. Thus, the downtrend continues until that is provided. I don't see any activity to support such improvement at the present time.

Happy talk and drains seem to only have a temporary impact. I think this will frustrate Ben when he realizes he is not as powerful as the ocean.

GT
TH
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