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

To: GST who wrote (76102)	12/19/2006 2:14:14 PM
From: jimmg	Read Replies (1) \| Respond to of 110194

A true contraction of credit where m-3 growth goes negative might result in a stronger dollar. That also might cause dollar flight as the us economy slides into the abyss. To me, the long bond, credit spreads, commodities, bank/brokers are my main tells for the dollar's fate.

To: GST who wrote (76102)	12/19/2006 4:39:51 PM
From: SouthFloridaGuy	Read Replies (2) \| Respond to of 110194

If the Fed raises rates and maintains an inverted curve, the dollar will rally. I suspect this will be the case as the US economy can withstand 150bp of hikes, IMO, due to elevated inflation and still fairly benign (relative to yields) asset pricing. After that, all bets are off. There is no reason for the Euro to be where it is and even less reason for $2 pound. Why would you buy anything British, it's so damn expensive. When the US cracks, the world will crack and hence the dollar need not depreciate significantly against all currencies - more likely just the Asian ones.