A more detailed look at Rick’s dollar target of 120+
We dive into more detail on Rick’s target for the US dollar of at least 120 on the dollar index.
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Rate hikes are a done deal Rick, from Yellen today
http://www.zerohedge.com/news/2015-05-22/yellen-speaks-prospects-economy-%E2%80%94-live-feed
To be a done deal, it has to be done first. Not just talked about. FED has been all bark no bite.
They did warn they would end QE. No one believed them. Yet they did just that…
True Gary. People seem to forget the Fed is goal oriented and once they set an agenda it is just a matter of time before they implement that plan. I really don’t understand why anyone doubts rate hikes are coming.
They also said no more QE after QE 1. They have stopped QE several times. Just like quitting smoking. Monetary expansion will come again, soon. Not no one believed that they were going to taper. Off course they would. There is a QE relay going on. They matter is whether they will start QE or whatever equivalent program again. I believe so.
Rate hike coming? There is a difference between 0.5% and 5%.
Most people were talking about end of QE at the time. Why do you say nobody believed them. I thought most people believed them.
Birdman is smoking the peyote. Welcome to QE and 0% forever. Fed has been crying wolf on raising rates now for 5 or 6 YEARS. If the Fed said the moon was made out of cheese Birdman would believe it and argue with anyone who says it’s made out of rock. I am on the bull side or oil and bear side of gold. $ moves either way and I am making money.
If QE and 0 rate 4 ever, you’d better shift to bull side for gold.
so what has o rates and
so what has zero rates and QE done for gold Lawrence? US QE, ECB QE Japan QE and gold is fighting to hold $1200 a mere 5% off its lows instead of trying to break above say $2000, what you speak of 0 rates and QE is what ALL the so called gold experts got wrong, no hyperinflation, no US$ crash, no US equity crash, hmmm
0 interest rate and QE both increase money supply. More money chasing same amount of gold. They have suppressed gold price using official sector gold, the gold which should belong to people, but they cannot hold it down forever. As money supply goes up, things go up in price due to supply demand. If gold does not go up, producers will go out of business. Most of them are strugglingor already closed down now. This should be common sense. You can look at money supply for the last centery and compare it the gold price chart. They are quite consistent till last three years. It is surprising people in the west are not fighting this treasonous act.
OJJ:
So if something didn’t happen yesterday, it means it can’t happen tomorrow?
You may want to retake that logic course one more time, you didn’t do all that well the last time.
Hang in there Boob hope you live long enough to be right, that approach sure makes a lot of money – buy and hope as 2+ years is a very long tomorrow
JJ, unless you are a trader two years is short. If you are a trader, why does trend matter for you? You are trading the price swing and hoping you can beat Goldman Sachs.
Why does everything need it to be spelled out to the ninth degree, two years for a long term holder agree, its dick, 30-80-90! % LOSSES in the pm’s sector is no big deal wow I didn’t realize everyone here is a Zillionaire
I don’t think it is wise to hold a lot of equities. When government hold down the gold price, they are so broke so they worth nothing and risk bankruptcy. So nearly all my positions are physical and closed ended ETF such as Central fund, silver bullion trust, silver certificate and Sprott physical fund. Miners will do great if they survive but you don’t know who and when.
ojj:
I bought 98% of my gold below $280 and 95% of my silver below $5. I was the first guy saying on the web that we were at a bottom in May of 2001. I’ve done quite well. I called the top in silver almost to the day in 2011 as I was dumping to beat the band. Why exactly would I need to buy and hope? I buy and profit by seeing the future. When you invest using your rear view mirror, you are buying and praying.
http://www.321gold.com/editorials/moriarty/small051401.html
The stock market is going to tank, the bond market is going to tank, derivatives are going to blow sky high and the dollar is going to be the well deserved toilet paper it is. That won’t be tomorrow but it will be.
Those that don’t own gold understand neither history nor economics.
0 interest rate and QE both increase money supply. More money chasing same amount of gold. They have suppressed gold price using official sector gold but they Cannot hold it down forever. As money supply goes up, things go up in price due to supply demand. If gold does not go up, producers will go out of business. Most of them are struggling now. This should be common sense. You can look at money supply for the last c entry and compare the gold price chart. They are quite consistent till last three years.
BINGO!!!!!!!!!!!!!!!!!
Lawrence you win a car!….EXACTLY! until the last 3 years, so how come somebody like you a non gold bug guru can figure out what ALL the highly educated gold gurus could not, its works till it doesn’t and I’d say almost 3 years now is a decent trend showing just how wrong all these experts were, Lawrence you are now the #1 Gold bug Guru
It shows how easy for government to suppress common sense, simply by manipulating market for a few years. But gold is a global asset for thousand years. US does not have the means to do it in long term. All those thousands of tons may last them for five six years, eventually they have to let the price rise like they always did. I am not even a gold bug, more of inflationist. I believe inflation is expansion of money supply and eventually translate to price rise. As long as I am willing to hold, they can do nothing but to make me rich. I did sell a lot of my gold miners and silver in 2011 because I thought they were over bought.
Interesting commentary by Alastair McLeod about the Chapwood index which shows inflation over the last four years in 50 cities in the USA running at 10%/year.
Compare that to the Fed’s bogus numbers!
Bogus numbers by the FED IS CORRECT.
Rick, last time the US dollar index was at 120 coming into 2001,, it was the end of the stook market boom of 1990-2000.
It looke like the dollar will make it to the 2001 peak at 120 quitelikely.
If however there is real deflation, then that would be a once in a century or once in a Kondratieff cycle (60-80 year) event or maybe even an event comparable with the end of the bubbles in 1720 – a once in a 300 year event.
That might mean in the big picture that the gradual overall dollar decline that has happened since 1971 could reverse itself. Instead of lower highs and lower lows, it might reverse to higher highs and higher lows. In that case the dollar could reverse to the upside and end up at 160 as it was in 1985. That would also key in with the 2014 breakout from the falling wedge pattern that had been in force since 1985.
That could easily happen if there is a currency crisis in the Euro yen or Pound and if one or more of them really crashed, especially if one had a hyperinflation.
I wonder if the dollar will peak at 120 in this bull market in 2016, then have a bear market in 2016-2024 taking it down perhaps to 80 and then have another bull run to 160 into 2030-2032. Or will it just go straight to 160 this time in a massive move?
The only bearish scenario for the USDX would be if the breakout last year was a false one – but it was so sudden and so significant without any downside correction that it is difficult to see a bearish case for the dollar for quite a long time.
It is too early for the dollar to head up to over 100. It looks like it is still in a downtrend headed to around 90 1st. People are too bullish on the dollar but short term it should head down and complete its correction.
Hope everyone is well.
I have only 1 but it is 1 big “issue” with what Rick said [and please don’t get me wrong: me saying I have an issue with something DOES NOT MEAN I believe that thing is wrong].
He is the one who actually got me that thought when he said those words. At 40sec sqq (as I listened to him, I just had this going through my mind instantly):
“A 120 USD correspond to global depression. Because a stronger dollar in and of itself is deflationary”.
I tend to agree with his analysis 120 USD = deflationary.
I know I will “shock” some of us… but I have an issue with the part that say 120 USD = global recession… I don’t know… something doesn’t jive in my mind here.
I feel this is too much linear thinking and for that reason… I have issues with this.
Beside, I think EVERYBODY knows 120 = deflationary… so I am convinced some powers that be would like to avoid that. I understand that the business cycle (M. Armstrong) cannot be fought (ie if deflation has to occur, it will occur).
Still… I am left unconvinced by that type of linear thinking. Which doesn’t mean I believe Rick is wrong. It just means I am unconvinced.
Recently, we have seen global evidences of a somewhat halt in deflation. I suspect too many people/investors currently think deflation while we are in fact at the beginning of a reflationary phase.
Wanna see evidence of that ???
In the US: check all the talk in Congress about higher minimum wages here and there + workers protest now (Mac Donald, this week)
In China: stock market going loco with massive retail participation
EU: signs of deflation halts
Japan: some upside to salaries/compensation recently figures (if my memory doesn’t fail me).
We’ll see.
My 2 cts.
LPG
A few typos and poor phrasing in my previous post at 9:02pm: apologies.
Getting late over here and still haven’t slept. Doesn’t mean this as an excuse, yet as an explanation.
Best to all and wishing you all a pleasant WE.
LPG
Spot on Mr Rick, very possible and you have the likes of Armstrong in your camp of a much higher US$ based off a much weaker Euro$ this chart shows the two as 120 was hit in the past suggesting sub par Euro$
http://stockcharts.com/h-sc/ui?s=%24USD&p=W&yr=20&mn=5&dy=0&id=p98338038993&listNum=1&a=409328657