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

To: Real Man who wrote (39024)	6/10/2011 10:51:00 PM
From: GROUND ZERO™	Read Replies (1) \| Respond to of 71475

The U.S. Dollar has turned higher over the past few days... do you think the dollar will begin to rally now that the QE has ended? TIA GZ

To: Real Man who wrote (39024)	6/10/2011 11:12:39 PM
From: carranza2	Respond to of 71475

That's one of the most intriguing and thought-provoking charts I have seen in a very long time. Velocity has been on a serious downtrend since the 1980s while MZM during the same time period has increased, more than doubling in the last decade. It's like there has been a huge but invisible deflationist jackboot on the neck of the economy that the Fed has tried to dislodge by inflating money supply. As Elizabeth Warren has pointed out, the inflation-adjusted cost of practically everything has gone down in the last 20-30 years, housing and healthcare excepted, which have gone thru the roof. Energy, of course, wiggles around a lot. I think the loss of manufacturing to labor-cheap countries (resulting in cheaper prices to the American consumer) and the incredible increases in productivity thanks to technology probably account for this deflationist jackboot. I agree that the transmission mechanism from growing MZM to credit is presently broken, but it wasn't always so. In fact, the transmission mechanism worked too well which, of course, is the reason for subprime, etc. I think I know now, finally, why Ben gave his helicopter speech. He saw all this coming. He'll definitely give us another round of QE3.