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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: gregor_us who wrote (24278)	1/9/2005 10:15:54 AM
From: russwinter	Read Replies (4) \| Respond to of 110194

I do think there was a sentiment USD bottom put in in early Dec. which was also the point where the US was printing excessive money, which hit it's crescendo on Dec. 8th. At that point the Wizards and their Master of the Universe buddies (clearly revealed by who was taking the USD long position in early Dec against the funds) must have decided to try and engineer a rally using the offside speculative positions as the fuel. And if truth be told they have done this in a real kind of way, stopping the printing presses for awhile, and for a short period of about four weeks now withholding excess liquidity. It also looks a lot like the Y2K money printing experience, when they realized the preemptive liquidity (for FNM this time?) was overdone or the bailout operation was largely completed, then backed off and set off the NAZ collapse. Plus the USD issue came to a head, and perhaps the China quid pro quo re-peg theory for USD support operations is in play as well? Whatever it is, the system is going into this weekend running low on Feed me Seymour heroin intake. So in that sense, this in my mind is a legitimate USD defense, at least for the moment . The question begs though is how long can they muster this? And if they can't, as you say they risk a terrible USD fall. It's my pediphile's ability to stay away from children analogy, and I use this because they only way the Wizards can finance a $1.2 trillion twin deficit, is with extreme heavy handed manipulation and intervention into the credit and bonds markets on almost a daily basis. When they perform printing press maintenance, things come unravelled real quick, and because there is no slack or room for error this risks serious financial displacement. And then when they get poor economic news resulting from all the inflationary maladjustments, and the fact that non-Bullys are being killed, they will resort to the wrong medicine (easy money) as the cure. So if they don't revert back to form, then the mega deficits don't get the heroin, if they revert back to form then the world gets flooded with more Old Maid Cards that in turn get monetized, pressure the USD even more, threatening hyper inflation at this point. Perhaps they are attempting a "regearing" towards keeping the addict on a painful drip treatment? That's the big question??? If so then they could stabilize (but not rally it in a meaningful way) the USD at a price. They may very well experiment with that, in which case I certainly hope folks here have some puts in something. The problem right now in a painful heroin drip scenario is that everybody is long something . Another scenario completely the opposite of painful heroin drip is the worldwide currency debasement approach, where they just decide to wreck all money about equally. That will become evident if we start hearing talk of rate cuts, etc. Then we need to talk serious flucht in die sachwerte strategies.