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Strategies & Market Trends : Buy and Sell Signals, and Other Market Perspectives -- Ignore unavailable to you. Want to Upgrade?

To: sandeep who wrote (2109)	4/7/2010 3:42:40 AM
From: Real Man	1 Recommendation Read Replies (1) \| Respond to of 220883

Faber is not an idiot, but he is overly bearish on the dollar. We've been running current account deficits for some time, while producing little. The current dollar strength is really Euro weakness (the euro is 57% of USD index!) due to some European countries hitting the fan, rather than recovery. This is bearish for the markets, IMHO. The Fed is doing their deed. This is pretty bad for the dollar's purchasing power, the Fed monetizing base money 3-fold to decrease leverage, and that's why the market took off like a mad dog. Bonds really suck in this environment. Faber has been pounding the table for hyperinflation, which is 50% a month inflation or so, within 5 years or so. The train really needs to go off the track for that to happen, and we are still pretty far from that. Ditto Mr. Rogers, but his claims are more subdued, DOW 40K. Soros is in gold, his fund's 10% holding is gold (that despite he said it's a bubble. His fund was increasing it's position while he was talking -ggg-) This could mean Dow 100K within 5 years, if Faber's scenario plays out in a mild form. If it plays out as he, Dr. Doom, expects, that would mean DOW 10,000,000,000,000,000,000,000. I think that's unlikely. -g- That said, the Fed already quetly devalued the dollar 3-fold. They gave the money to the banks, who were bidding up stocks, that's why consumption sucks and inflation is contained. They say that money will trickle into dollar devaluation, eventually, while the Fed is attempting to avert SHTF scenario for the United States claiming they will suck all that money back into the printing press as the economy recovers. That claim is likely bogus -g- As this chart below indicates, so far the Fed devalued the dollar by a factor of 3. They say they will stop, which is why I am getting mildly bearish. Mildly because they are the cause, and the effect is not fully in. You could say the old Spoos high is now at 5K, given what the Fed has done, cause the dollar is really 33% of what it was in 2007. It's just not in the markets yet. -g-