How does the Fed feel about the US dollar trading at $84+
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Stronger dollar weakens an economy making for dearer exports and cheaper imports, thereby removing the readiness/ability for goods to be manufactured at home.
Not everyone wants a weak dollar though. There is more to the picture than just exporter demands. In some cases it is preferred that the public enjoys a little more buying power and lets not forget that also supports nations that are highly reliant on markets into the US. As Chris rightly pointed out, gold is actually rising in many currencies now whereas it is falling in dollar terms. But that same idea is equally applicable to commodities in general although he did not make note of that. I really don’t think we need to worry if the the dollar is in a rising trend for now as that is not going to make the wheels fall off the wagons any more than the deflation trends underway elsewhere that are probably a higher priority. Europe is facing a very serious negative trend that needs remedy more urgently than do US exporters to capture a bigger share of the pie. We are all in this together remember.
I guess my point is that if the US is going to be thee global engine for a few years then consumers here will be pulling a little more of the weight for awhile as others steady their own economies.
I got this from Ed Steer this morning, I just thought some people might be interested in this video playing 4 weeks in New York
I wonder if its still gonna be deniable?
.NYC Watches WTC Building #7 Come Down Again This 9/11/14
Times Square in New York City is now the site of the largest 9/11 TRUTH video presentation since 2001. It will host a 45-foot Building #7 video-billboard created by the Architects and Engineers for 9/11.
The billboard has been installed at the corner of 42nd Street and 8th Avenue in Times Square, Manhattan. This 9/11 TRUTH video-billboard has been quite strategically located within very close proximity to the New York Times Building. In fact many Times employees will be able to view the video as they walk by it on their way to and from work.
What is particularly significant is that The New York Times has persisted in ignoring the facts surrounding the 9/11 event. The Grey Lady and national newspaper of record, as it is universally known, has all but refused to cover with any credibility the greatest terrorist attack in U.S. history; one that occurred in its own backyard!
The video shown below will repeat the following statements and the 15-second spot will air every two minutes for four straight weeks.
“5:20 PM on 9/11, WTC7 came down in a classic controlled demolition. The government says fire brought it down, but anyone who watches the video can see otherwise.”
This must read/watch article was posted on the stateofthenation2012.com Internet site yesterday—and it’s the second offering in row from Roy Stephens.
Read more…
This is the video referred to:
https://www.youtube.com/watch?v=UuesL-ufkzo
No passenger jet either for WTC 7 cfs.
The dollar is not so strong as everything else is weak !! long live a free Scotland and Wales . I think a free Scotland would not be bad for the Scots. They probably would continue to use the pound as the currency for at least a few years. England would do ok as well , just slighly less revenue. best lf health and wealth to you all S
This is short term thinking. After the oil runs out, Scotland would have very serious problems.
Scotland is plagued with welfare problems and violence, especially in the environs of Glasgow.
Excellent discussion guys. It helps a great deal when I hear you talking markets more broadly without the popular fixation on gold alone as if it the only factor that matters. I am also puzzling over the implications of a high dollar if that goes on for too long. The thing is Europe is getting a subsidy right now as QE ends here but a new program opens there. Like a baton got switched between runners in a race. For all we know this was the strategy going back two years already. Meanwhile the trend is almost certainly going to be down for the Euro for up to two more years and that means a higher dollar as weighting dictates its strength. What the Fed feels about this may not have any bearing as I don’t think they have the power to materially change the course unless they take new actions. And that is doubtful.
Birdman, I think the world is transitioning from a world in which currencies were set by import-export levels to one in which currencies will be set by relative” printing” rates.
Under the latter evaluation mode, the US dollar will sink at a rate second only to the Yen.
Yes, Bird, they would have to surprise the markets yet again to take the starch out of the dollar; and probably aren’t ready quite yet. If they can get away with it, they want to finish QE AND raise rates at least a little, so as to later have “room” to ease if needed. Whether they’ll do all that is dubious. If I’m wrong about rates near-term and the 10-yr. yield jumps much more–or the dollar does–that might get them panicked enough to call a “time out.” After all, don’t forget the Fed’s self-proclaimed “third mandate” – keeping the markets from imploding. A little bit of steam out of things they wouldn’t mind; but if it starts to get out of hand, Yellen will soil her knickers and react.
Relevant to de-dollarization is Max Keiser’s discussion with Jerome Booth (12 mins in). But also germane to the stronger dollar is how swarms of teenage mobs are running wild in the U.S. emptying shopping malls, already emptied of many outlets. For as Stacey Herbert says we’re living in a post-nothing to do age’ where there’s no point to anything.
Personal aside here: I used to enjoy restoring antique (Victorian and Georgian ) chairs, or at least re-upholstering them. Was a time when I did reasonably OK re-selling these in our local antique auctions. But now the market’s all but dead. People have either gone minimalistic, or prefer the stuff flogged by IIKEA, or have run out of funds But the old stuff with beautiful beech wood frames and with all the proper upholstery materials applied (horsehair, flock, hessian and proper springs, etc) is now all but dead, except of course for that stuff with real snob appeal like say those Queen Anne silk embossed chairs which you can’t buy for love or money.
All I can say is that I wouldn’t want to be a U.S. teenager today…or for that matter like many of our UK teenagers here as well.
I love the charm & the beauty of the Victorian period also Rev.
I’ve brought many pieces from deceased estates etc over the years to have restored to their former glory.
That was an era of true craftsmanship.
I agree. I used to have a real love of antiques too Reverend. I was really amazed when the bottom fell out of that market. You could hardly give away stuff that previously was in hot demand. It is so fickle where tastes are concerned.
Would you rather hold Yen, Ruble, Euro, Yuan? China is going to crash and take most of Asia with it. Best house in the world neighborhood is the U.S.
I would buy Yuan if they were fully convertible and freely traded.
And you think the U.S. had a housing/credit bubble…….China got nothing on us.
Quite true. And one reason the dollar might still go higher than I presently think s that, so far, none of its move is due to any real fear in the markets. It is simply reacting first to the euro finally weakening, and now the move is taking on a bit of life of its own as directional players pile in, and short oil, gold, euro, yen, etc. If there was any real fear in the markets–especially where China is concerned, as there should be – the yen would also be rising. Maybe that will still come later for a spell, before the yen resumes its secular decline.
Great point about momentum traders and specs carrying commodities down deeper than they might have gone otherwise. That might be the best idea of the day. I strongly suspect we will see a bounce coming soon in regards to a lot of resources that are looking critically oversold.
At the level of hundreds or thousandsof dollars the Chinese currency is freely tradable!
I have easily bought a few thousand yuan before going to China, and exchanged back excess on leaving. ( In UK)
India’s Love Affair with Gold May Be Over as Prices Slide
Kiran Laxman Salunkhe used to buy jewellery during religious festivals, but sliding gold prices have led the young Indian farmer to break with his family’s traditional investment.
This year Salunkhe has deposited his hard-earned savings at the bank for the first time in a decade and bought farmland.
“I bought jewellery when gold price was 32,000 rupees (per 10 grams) last year. Now jewellers won’t pay me more than 27,000 rupees if I want to sell. Why should I invest in gold,” said Salunkhe, who farms 15 acres of sugar cane in Vangal, a village 250 km (160 miles) south of Mumbai.
“Nowadays it is risky to keep jewellery. Burglaries are rising,” he said. “With a fixed deposit there is no risk.”
His attitude would change if the bank’s doors were locked the day he went to withdraw his money. And no, I am not just a gold bull, this is a possible reality. Why did he like gold to begin with?
The other issue with India, as I read that piece, is that the people–while certainly not shunning gold wholesale–are hopeful of a wave of growth with their new government, and want to buy stocks and other assets as well.
Interesting bb. Sentiment is in decline even in India. I am seeing the same thing here. The gals don’t want the traditional jewelry worn on their necks that signified money. Instead they are opting for Italian and designer stuff that is far more costly and thus has less of a relationship to the underlying metal which is usually gold. Jewelers also pay a pittance for anything people want to sell. So they dump the old coins which barely fetch half market prices but keep the designer materials as if they have more intrinsic value. The other thing is the long lag time it takes for dealers to reduce prices to market values people will accept. On the way up, shops were quite busy. On the way down they are like tombs and few are willing to pay prices that are months out of date.
I believe that article was from Reuters so its probably just you typical gold bashing. Koos at BullionStar has India inporting 77 tonnes in June, a 12 month high.
The Fed is in a pickle, in the past they could raise rates to curb speculation, that is not an option now, what will happen to The US currency sitting in foreign banks now that their currencies are declining, does anyone see a problem here?