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Strategies & Market Trends : Longer-Term Market Trends
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From: ItsAllCyclical7/18/2008 12:45:36 AM
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Dollar - More crusty EW

Green scenario says that Dollar could fall further LT (65 area is likely spot?), but that a substantial Dollar rally will probably happen at some pt in the next year maybe much sooner. How can this be? Deflation? Dollar sucks, but other currencies have issues as well. Trade deficit narrows dramatically as oil goes back to 60-80 in big world wide recession. US gets hurts, but so does everywhere else. Dollar once again safe haven. Troops come out of Iraq. Etc. Point being is that there are FA possibilities to explain it.

Blue scenario says Dollar has a lot more to fall prior to any significant rally. Be long gold now it'll make new highs very soon. We all know the blue story FA wise by heart. No need to explain.

I can see why the gold chart appears to be jello.

1) It really is a matter of how much residual inflation is in the pipeline
2) Are we at peak oil now even if we get a world-wide recession or do we still have 4-5 years reprieve (demand destruction overwhelms)
3) When, if at all will the Fed start to print again? I think they need the Dollar to rally prior to this possibility. Agree w/Mish and others. Fed has not be printing. Trying to provide liquidity, wasting Fed reserves in swaps is not the same thing as printing NEW Dollars.

I don't know yet how these 3 pts will interplay during the next year.

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