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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: GraceZ who wrote (67931)	12/3/2006 7:31:54 PM
From: regli	Respond to of 306849

"Could it be that the left side of your time frame had an equally sharp rise in the dollar as measured against the currencies of our major trading partners?" I find your response quite disingenuous. Please note that my chart in my first response to you showed the broad dollar all the way back to 97 where the broad index was at 100! Message 23061655 It should also be noted that in your first response to GST you made the unilateral statement "The trade weighted dollar index shows the dollar hasn't given up much ground" without specifying any time frame. Message 23061027 Your point regarding that "the dollar hasn't given up much ground where it counts the most, against our trading partners" is also highly questionable as it discount a key advantage for the U.S. and that is that the dollar is still the world's reserve currency. If it weren't it would have dropped much further long ago! However, if one looks at the dollar through the reserve currency prism then one needs to compare it with competing "hard" currencies, i.e. the Mark/Euro, the Swiss Franc and the Yen. In this scenario, the dollar's performance doesn't look quite so good despite its big run in the 90s. Again, it is a matter of the time frame but the recent drop has a lot of people worried who are heavily invested in the dollar. Dollar purchases of U.S. debt have increased dramatically over the past five years by U.S. trading partners. Given the dollars past record, I don't think it makes sense for these investors to take such a benign view of the most recent drop. These trading partners have lost a lot of their investment and are justifiably concerned about a further and potentially much more severe decline given the dollar's present behavior in the current macro economic climate.