Monday, 17 February 2014

King Dollar - still reigning

The US Dollar unquestionably remains the reserve currency of the world. Despite a fair few trillion of Federal reserve printing, the USD is still comfortably holding the critical floor of the low 70s. The Euro or Yen look set to implode first, and thus..King Dollar will surely continue to reign for years to come.

USD, monthly'1

USD, monthly'2


First, I should again note, I am a general supporter of Peter Schiff, having followed him for probably a decade. He was right about the looming property implosion and the 'false' equity market ramp into late 2007. Further, he was bullish gold before most would ever have considered 'stacking it'

Yet, all the 'dollar doom' talk has come to nothing. Neither have we seen the huge inflation that Schiff - and many other doomers touted. That certainly doesn't mean its not coming, but hey, after six years, I'm now highly skeptical of the still incessant 'dollar doom' talk.

Regardless, an interesting interview, Hunter and Schiff

Summer 2014 upside for the USD?

From a pure chart perspective, the most notable aspect on the big monthly charts are the bollinger bands. They have never been tighter in at least 20 years. At some point we're going to break out of the current tight range.

My best guess is that it will be to the upside. First target is the 87-92 zone. Any monthly close >92, and we'll likely just keep on going to the giant 100 level. After that, there is clear air to 120, which is a level we've not seen since 2002.

Barring a break <70, the 'dollar doomers' - of whom I would include Schiff, should frankly shut up. They won't of course, much in the same way that the Gold bugs were touting 'buy buy buy' all the way from $1900 to the $1100s.

Of course, any rise in the USD this year would be a downward pressure on equities and commodities - especially the precious metals. Although Gold is a tricky one to predict, since it might briefly benefit in terms of a 'safety trade'.

Anyway, for now, we can still tout.... Long live the King, right?
more later...probably on T-bonds.