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

To: UncleBigs who wrote (63571)	6/13/2006 5:35:24 PM
From: kris b	Respond to of 110194

Right now, cash is king. U.S dollar cash. Right on. FINALLY

To: UncleBigs who wrote (63571)	6/13/2006 6:21:42 PM
From: Ice Cube	Read Replies (2) \| Respond to of 110194

time for the gold bugs to come out of their bunkers and smell the sweet smell of capitalism.

To: UncleBigs who wrote (63571)	6/13/2006 6:26:53 PM
From: gregor_us	Read Replies (2) \| Respond to of 110194

It's Not So much irrational to me as it its conventional. I see this current little bout of Petite Dollar strength as a textbook move that can't last. There is little that is sustainably attractive about a currency that's ostensibly being supported by a rate hike campaign to fight inflation. What's more, the FED is already making a Slowdown Theme a key feature in their remarks, especially Bernanke, who devoted 2/3 of his speech last Monday to that theme. That's why my view that this is a knee-jerk response back into the USD, that is actually pretty weak. It's a move that begins at weak levels, and is not that impressive. Without the national debt at 8.3 trillion, and with the view that the US economy could withstand further rate hikes, you would have a Monster Dollar, awakening from its slumber and ready to stomp Godzilla like across the world. The theme there would be strong econony, stronger than most, and ready to go the distance. But that's not the landscape. Even the FED is telling people that. Finally, there is no greater long position in the world than the USD. The past few years of dollar weakness with its attendant oil, gold, commodity, and other currency strength has been but a mere nick in the aggregate long position in the USD. People often ask: against what will the USD fall? I thought the answer was easy: Stuff. The dollar has already collapsed against Oil, Real Estate, and myriad other things. Hey, I do indeed take your point about PPP wrt to the EUR and CHF. All I'm saying is the PPP of the USD can go a long, long way down while still looking benign on a nominal exchange basis against all sorts of currencies. I also agree and have signed on fully for years now that the private debt in the USA is a deflationary forcejust waiting to be triggered. But once that force is triggered, it will trigger the competing inflationary force of the US pulbic debt and especially the mechanism to deal with it: Uncle Buck. Best, LP