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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Jim Willie CB who wrote (1943)	3/13/2004 1:17:16 PM
From: Wyätt Gwyön	Read Replies (7) \| Respond to of 116555

i do not recall any dollar-specific commentary from them. Shilling, who makes similar bond-bullish deflationary arguments, thinks USD will be strong over the long-term because capital flows to the country with the highest productivity (a line of thinking i find dubious). certainly the weak dollar over the past couple years has not hurt bond yields--in fact, lately the argument has been that a STRONG dollar would be bearish for USTs since BOJ would not buy so many of them to support USD/JPY. but on the other other hand, USD has kicked everbody's ass lately, much as i expected in an environment where all "investors" expected* a continued decline in USD (even as they all expected yields to rise and stocks to rise, ha ha), and despite the ass-whupping taken by nearly every currency of note, USTs have put in a fantastic stretch of late. so go figure. things have been turned upside down so many times in the macro picture vis-a-vis USD and US C/A position, i do not put a lot of faith in historical correlations--there are too many ulterior motives in the mercantilist CBs which have no historical precedent in a fiat monetary system. *we pointed out anecdotal signs of the dollar bottom, with the Economist cover story and a front page article in WSJ called "How to Play the Falling Dollar". with fundamentals hard to game, one might rely on technicals. what do you think about a 38% Fibo retracement of AUD/USD? is that a reliable entry point? i guess that would happen around AUD/USD in the high 60s...