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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum

GLD 368.18

-0.5%

Oct 31 5:00 PM EST

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To: maceng2 who wrote (44565)	1/1/2009 9:43:53 PM
From: maceng2	Read Replies (2) of 217516

Just to summarize some of my recent posts on Gold and the USD. Message 25287254 Message 25251530 I have a big criticism of many financial journalists and authors. Models, graphs and explanations are used to describe previous market action but are immediately discarded to make any real prediction where things will go. If the VIX does support the USD, well it does... and if high readings come back so should the strength of the USD. If you are going to make a proper model of a market, it should have some predictive qualities to it. Even if those predictions are wrong is usually educational to find out why a model is wrong. I believe the USD is destined to become devalued by a large percentage, but that there will be some strong reaction to this process on the way down. i.e. there is still a large prevalent belief that the USD is the only valid world reserve currency, and during times of stress and uncertainty, funds will withdraw into the USD as a position of safety. There is also a large inertia in this view because of the long history of the USD as such. Financial and political upheaval in the USA (and elsewhere to some extent) will challenge the solidity of the USD as the only world reserve currency, and this will result in large swings away from the USD. These swings will eventually become predominant. In short I suspect the value of the USD will become BIFURCATED as in the classic chaos theory definition. serendip.brynmawr.edu All other currencies will swing in reaction to the USD and in opposition to it. The USD will still be the driver of this process until a replacement is found or the instabilities in the USD are eliminated. In the mean time I am going to throw out models, typically quickly assembled, so as I can see how they compare to current market action and hopefully develop a more comprehensive model that will reflect market reality. I have started a blog where I will share some of the model work for anyone who is interested in such stuff. marketmodels.blogspot.com

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