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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: orkrious who wrote (96409)8/18/2008 10:23:58 PM
From: gregor_us  Read Replies (1) of 110194
 
Actually, imo, Richard is capitulating to the new view sweeping the markets. He's saying the deflationary view--or end of inflation pressures view--is no where to be found. I see it everywhere.

RR was the one who talked about USD strength years ago, as the denouement to the bubble. I wrote about his view in my Dollar essay last year (in which I pay due respect to Richard). I like Richard and everyone else likes Richard. I think it's a very confusing time right now, and no one is as sure about what's going on. That said, it's August, and in the last few years, May and August have been times of notable deleveraging and counter-trend squeezes.

I think the commodity smackdown is the most spectacular yet. However, the previous smackdowns also seemed quite stunning. Oil in Q3 and Q4 of 2006? Gold in Q2 of 2006? Oil in Q4 of 2004 also fell very hard.

The purpose of the smackdowns is obvious: to get even the most experienced people to start howling at the moon.

PS: hat tip to David Kotok today who correctly pointed out that USD strength is not correlated at all with oil, that this is just a recent correlation that people have expanded way past the last half year. (I'm not long gold, but I suspect gold could rally in 2009 even if the USD is stable).

I wish RR the best. In the last few years, he has changed positions so many times--most notably at the turns. Only to find himself on the wrong side.

G

My USD essay from early last year: gregor.us
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