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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: RockyBalboa who wrote (28311)	5/5/2010 9:57:39 AM
From: ggersh	Read Replies (1) \| Respond to of 71454

See the Currency move! And now??? And they say history never repeats itself * This morning German 2 year yields dropped to a low of 60 basis points and moved within 7 basis points of the downward sloping trend line off the 1999 and 2003 lows.(53 basis points). Coincidentally the cycle low in U.S. 2 year yields was posted on 17th December 2008 at 60 basis points. On December 15th 2008 the Fed funds rate stood at 1% and in “one fell swoop” the Fed dropped rates to 0-25 basis points on 16th December 2008. (2 year yields were 61 basis points that day). At that meeting the Fed also indicated that it may well move to purchasing long-term treasury securities (Q.E.) * That had the effect of o Putting a base on 2 year treasury yields. o The cycle low on 10 year yields was posted 2 days later at 2.03% (A level never seen since) as it became apparent that we were prepared to “flood the system” with liquidity to address the problem. o Between the 15th and 18th of December the USD got hit heavily with EURUSD rising from 1.3750 to 1.4720 before reversing sharply in a move that took us down to 1.2457 by early March. * Right now we see EURUSD under pressure; We see the ECB having relaxed its collateral rules for Greek bonds (Despite assurances from Msr.Trichet that this would not happen. What next? OH look….the ECB meets tomorrow……what a strange sense of déjà vu.