For about 82 cents from my account, I would get one Euro.
Posted on 08/14/2008 12:13:40 AM PDT by TigerLikesRooster
US dollar rallies as extent of worldwide recession becomes clearer
By Ambrose Evans-Pritchard, International Business Editor
Last Updated: 10:13pm BST 08/08/2008
The psychology of global markets has shifted hugely over recent days as it becomes clear that Europe, Australasia and parts of Asia are sliding into recession.
The US dollar has launched its best rally in half a decade, reflecting a recognition that half the world is in even worse shape than the US. In fact, America is the only G7 country to eke out modest growth this summer.
The US dollar index - currencies watched closely by traders - smashed through resistance yesterday in the biggest one-day move since the long dollar slide began seven years ago.
advertisement"This was highly significant. Perceptions have changed," said Ian Stannard, currency strategist at BNP Paribas.
The greenback gained three cents to $1.5050 against the euro, with big moves against other currencies.
(Excerpt) Read more at telegraph.co.uk ...
Ping!
Ambrose has been yelling day after day that the dollar was about to collapse and a depression was imminent...
On the other hand, the likely sequence of events then and now would be:
In the end, there would be no decoupling.
LOL. The US dollar is rallying, not because the US economy and financial structure is good, healthy and strong, but because it looks better in comparison to everyone else’s!
It’s not exactly the best news I’ve ever heard...
Rallying is not collapsing, regardless of the cause.
Coupled with the credit crunch (less economic growth all around) and "Green" energy policy (fuel deprivation for the American economic engine) we may have a temporary respite, but face a dismal future unless we can overcome the former two major issues sooner than later.
Since prospects for a conservative policy that promote growth is unlikely in the near future, I'm not very hopeful.
America has the ability and resources to overcome this. I just don't believe firmly that there's a majority that has either the will or intellect to do so.
If 9% pelosi has her way, her and her minions will strangle our nation to death.
We’ve been hearing this for two weeks, but it is not being reflected in the exchange rate here in China.
Today $1.00 USD buys 6.86093 RMB Yuan, 15% less than 20 months ago.
Interestly, however, in April this year, I was able to get more Hong Kong Dollars for a buck than I could 15 years ago. Very strange.
Don’t worry the printing presses are still working...
The US$ rally was set into motion on August 4, by the movement of huge sums of money into short term US Treasury Bonds. The money for the bond purchases was funneled through Swiss and Eastern European institutions. We’re talking $50 Billion. It appears, though no smoking gun, that the funds that set off the US$ rally, was big Russian money. Russian money from connected insiders that knew in advance of the Russian invasion of Georgia. As it came to pass, the Russian invasion caused the Ruble to crash and Russian stock markets to do a swan dive.
All the Russian money pouring into the US$ set off a buying/short covering $ panic. Institutional/hedge fund black box trading algorithms are programmed to do the following when the dollar moves up: Sell Oil, Sell Gold and Commodities, Buy US equities.
The mass movement of Russian money into the $, combined with program trading is THE reason that gold and oil sold off on the news of the Russian invasion, a geopolitical event that normally would have had the opposite effect on oil and gold.
conservative policy that promote growth
liberal policy = demote growth
Ambrose Evans-Pritchard, International Doom & Gloom Ed.
Wow AEP, where did the Swami let you down...I thought you said we are all going to die...friggin’ frauds all!
For about 82 cents from my account, I would get one Euro.
Thanks for your elucidating post. Your views were presaged by a close friend of mine last evening. He also thinks the Russians are up to something more sinister than the mere taming of Georgia.
It is clear by now that Putin's goal is to destroy U.S..
And they’ve learned from their own experience- you can destroy a nation without firing a shot. Reagan proved it.
He is following a play book written by Kruschev and refined by Gorbychev. I still remember Mr. K's appearance at the UN where he beat on the table with his shoe. He said simply, 'We will bury you.' A very sinister message delivered symbolically and verbally.
Putin is a masterful chess player. Condi Rice better review her classical Russkie literature. With an emphasis on the convoluted double cross, triple dealing and backstabbing.
The mainstream media are going frantic worrying about how Obama can win this election. Look for another visit by terrorists in the coming days. Just before the election as those corrupt little shiekhs (Arabic: شيخ) follow Moscow's biding. Oil is being used as a terror weapon. We need to wake up.
The Georgian war formed part of an unscrupulous play on the stock market? Allowing rich Russians to get richer at the expense of their countrymen?
I find that very easy to believe.
No more of this "The Georgians started it" nonsense
Forgive Russia, ignore Germany, and punish France.
It was coined by Condi.
So he shares the same goal as Pelosi and the rest of the rats.
Putin must believe he can destroy U.S. via sinister KGB-style subterfuge. On the other hand, he is not keen on creating efficient and (uncorrupt) system of military and government. Nor on setting up modern industrial infrastructure.
The guy is a spook and all of his associates are, too. His kind only thrive in shady system. That is his limit and also current Russia's.
I have read that the Russian expression “we will bury you” is not as sinister as “we will kill you” but rather merely means “we will outlive you (and therefore conduct your funeral).” That said, Putin is a cunning and ambitious guy.
True, but I would rather the dollar rallied through its own efforts than because of the faults in the rest of the Worlds economies.
Speaking of Putin’s spy days,
I was reading W.E.B. Griffin’s Presidential Agent series and it goes into a lot of this. I picked it up on a whim, so I don’t know how much truth he puts into his books. But, when all of this started, it reminded me of the books immediately.
Several months ago, I read here on Free Republic that is was behind the scenes U.S. policy to artificially lower the price of oil during the cold war to bankrupt the USSR.
Now that we have had high oil prices for several years, Russia is flexing their muscles again.
I wonder if this is a bigger reason to DRILL HERE, DRILL NOW, so we can bankrupt them again.
Next year millions will realize how badly they were cheated by crooked realtors, mortgage lenders and Wall Street. This situation will continue to deterorate for the next five years:
One Third of New Owners Owe More Than House Is Worth !
Most of this massive real estate fraud took place in California. Read the report, It speaks for itself. I was right. The real estate shills were wrong. Blame them for your financial mistakes. I tried to warn you.
One freeper told me I saved their family over $ 250,000. All you shills and hype artists ought to take a bow. You ripped off millions of people for major money. I hope you are sued by all your victims for punitive damages.
I’ve been puzzling over what the heck was going on and your explanation answers my questions. Thank you.
Putin can’t destroy the USA. Our domestic communists like Pelosi, Read, Waters, Waxman, Dellums, assisted by their willing socialist liberal supporters. When the USA falls, it will fall from within. Guaranteed.
Fixed it for you.
Maybe they should sue? Maybe you could help?
I hope you are sued by all your victims for punitive damages.
You're always good for a laugh. LOL!
Guess who says he’s selling magic gas mileage gadgets?
LOL
LOL!
Over $500 billion in Treasuries trade every day.
Trillions in currencies trade every day. You think a turnaround would be caused by $50 billion? LOL!
I think you've got it.
“One Third of New Owners Owe More Than House Is Worth !”
THAT’S 8 MILLION HOMES WITH AN AVERAGE PRICE OF 220K!!
And we are just getting started
I don't know what Russia had to do with it but 50 billion might be oh, say 25% of Lehman Brothers' daily repo book? No way is that going to move any currency market. The currency markets are in the trillions daily.
How did I miss his diversification? I thought for sure he was still "swooping" down on foreclosed properties, making a mint, and planning for his "retirement" on the Italian (or was it the French?) Riviera.
Oh, well.....everyone needs a dream.
Do you have a source for this theory?
The economy is just wonderful, right?
Some of the posters on this thread are questioning the large foreign purchases of U.S. debt that led to the spike in the U.S. $. The news to back up my statement is out there, but it’s certainly hard to find. Here’s a statement by a financial news service, it’s copyrighted and subscription only and cannot be linked to:
“The Fed has reported that in the week ending August 6, foreign institutions made the largest net purchases of U.S. debt ever recorded. The foreign banks buying U.S. Treasurys caused a sudden shortage of U.S. Dollars, as a result the dollar leapt up 3% in 48 hours.”
Like I said in my original post, there’s no smoking gun linking this to Russian money, but there is adequate circumstantial evidence that points in that direction. I’d guess Russian well connected oligarchs are savvy enough to not leave their footprints all over the transactions.
I tried looking on the Federal Reserve site for the info alluded to above, but there’s so damn much data, I’m not familiar with their website and how to find what I’m looking for........and I’m out of time to do so.....looks like Tropical Storm Fay, soon to be Hurricane Fay, is going to be paying us a visit in the Florida Keys on Monday afternoon and I’ve got preparations to take care of.
IOW, you can't produce anything to back up your assertion. Fine. I think what was being argued are the amounts you mentioned. They aren't enough to cause a major reversal in the dollar trend.
Something is definitely causing the dollar to rally. Most likely the possibility of an economic slowdown is other countries.
That depends, how many "improve your gas mileage units" has ex-Texan sold?
Today's parting words from gold market analyst Ned Schmidt. He tenders an explanation for the dollar's rally that may not make the conventional headlines, but it is one you might want to take note of. "As is readily evident, the U.S. dollar has staged an incredible rally. That rally is one of the strongest to occur without some underlying causal event. In short, nothing readily apparent is happening around the world to cause such a move. Now, consider the weekly purchases of U.S. debt by official institutions, essentially central banks around the world. These numbers are reported weekly by the Federal Reserve, the depository for these bond holdings. In the week ending Wednesday, official institutions made the largest net purchase of U.S. debt ever recorded. They bought the annualized equivalent of $1.457 trillion. Those purchases created a shortage of dollars which created a massive short covering rally in the dollar. That buying pushed the dollar up almost 3% in the past week, or at a 320% annual rate."
Interesting (silly) theory that a purchase of $50 billion in Treasuries (with dollars they already held) would cause a shortage of dollars, but when gold is tanking, I guess a guy who sells gold needs to explain why it's not his fault (it's the foreigners).
Good luck with the storm.
First, a shortage of dollars was created which caused value of dollar to spike upward. Second, as payments for those bonds were made, a massive amount of liquidity flowed into the Street. That excessive liquidity quickly flowed into financial markets, causing a 300+ point DJIA rally.
Wow, the dollar shortage added massive liquidity (that'd be dollars) to the Street.
LOL!
This guy is a CFA? That's funny!
I found the article you're referencing. The guy even looks like a used car salesman. The internet seems to be full of these gold peddlers. Where were they when gold was at $400?
It's gold Jerry, gold!
“””IOW, you can’t produce anything to back up your assertion”””
The news bit I posted there came off Dow Jones Newswire, which I pay a monthly fee for and it comes across my stock trading platform as streaming news. I can’t cut and paste it and I can’t link to it, however if you have access to DJ Newswire you can find the bit on August 7, streaming news, at around 2:20 pm EST.
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