John Pitera's Market Laboratory Message Board

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Strategies & Market Trends : John Pitera's Market Laboratory

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To: John Pitera who wrote (9900)	9/6/2008 12:25:54 AM
From: John Pitera	2 Recommendations Read Replies (1) of 33421

REPOST from MISH's thread----mea culpa.... very good observation. When the AUD worked it's way up to .8800 in the 1990's it seemed to catch traction on the way down at .8100 to .7900. I was surprised to see it was as low as .6500 a few years ago. I was talking my view. I do think that we've got a very nice opportunity to get AUD longs in the above mentioned zone.... I would be quite surprised to see it fall towards the lower .70's from here with out a multimonth rally and as the smart money proverbially says there are short sharp sell offs in Bull Markets I'm pretty comfortable that Gold will make new alltime highs in the next two years, the AUD has always traded with an aptitude for Gold. A Major Global Reinflationary event is the only way to work our way out of this Global Credit Contraction/Liquidation environment. Those that Pooh- poo Bill Gross's and other's assessment that we will see the FED/Treasury using their balance sheets to support asset prices are both misguided and wrong... the average citizen ALWAYS pays for these workouts.... It's a fact of life. Just as pervasive inflationary pulls always debase a currency that is not linked to fixed standard. We don't want to live in a world of an unstructured and free-flowing credit collapse. The cops and firemen stop showing up for work... The lights go out, it's untenable and those that lament that the taxpayers are going to foot the bill, should focus with lazer like precision on the fact that the taxpayers ALLWAYS pay.... and the inflationary expansions remove purchasing value from the savers. The Savers who are the those who are applauded for their ablility to create wealth through savings. The deflationary contractions and Bear markets are said to restore wealth to the rightful owners, however that's not entirely true either. For the past 5 to 8 years I have pointed out on my thread that the FED has the ability, in times of crisis, to Monetize and put just about every single asset on it's books. Since it has an infinite supply of US dollars and the rest of the world is in a massive panic and seems to want dollars as if the world is ending currently... The FED could/ would and had ability to Put several Trillion Dollars of Assets on it's Balance sheet. Anyone who disputes this is not paying attention to this mind blowing rally in the USD and the fact that at the end of the day, the US Military "Stick" is going to deliver the US from this crisis. Russia changed the face of Global Macro Economic thinking on August 7th and 8th and I firmly believe that the market experts have given short-shift to this. Go look at the moves in the Global currency markets since August 7th-8th and give me any other plausible reason for the collapse of GeoPolitically vulnerable currencies relative to the USD. That's my take. John

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