Get Out Of $dollars$ Now!

[Vespa]

From what I saw going on in the currency market on Friday, I'm not that surprised at what I see as I turn on the screens today. The dollar has really moved higher, on the news of the Middle East fighting. Traders have forgotten about the awful data that came out on Friday... They have forgotten about the Fed's words of how the next rate move would be data dependent... They are focusing on the heated Tensions and fighting in the Middle East.

On Friday, Retail Sales printed an unexpected decline of .1%... It was forecast to increase .4%... June sales were held back by slower sales of motor vehicles and parts, department store merchandise, building/garden equipment and electronics. Increased purchases at gasoline service stations and at furniture and food stores limited the June decline. The thing that caught my eye, as I reviewed the report is how much 2nd QTR Retail Sales fell from the 1st QTR... The 1st QTR Retail Sales grew at a mighty 13.3% annualized pace... While the 2nd QTR grew at only 3.6% annual pace

The other piece of data last Friday that should have knocked the stuffing out of the dollar was the U. of Michigan Consumer Confidence for the first part of this month... While this data was expected to increase... It too fell to an 83 reading from 84.9 the previous month. So... Just to get my data scorecard up to date so I can keep track of what the Fed's watching... Last week, we saw Consumer Credit soar, The Trade Deficit widen by almost 1%, Initial Jobless Claims pushing higher, Retail Sales falling, along with Consumer Confidence... Hmmm... I wonder what Big Ben thinks about all this?

Today, we'll see that dumb Empire Manufacturing report that's all over the board each month, Industrial Production and Capacity Utilization for June. Later this week, we'll see CPI inflation data for June, and that's the Big Kahuna for the week... Right now, the "experts" have forecast Jun CPI to be weaker than May's.... I'll believe that one when I see it... No wait, I don't believe anything that CPI has to offer, so I have no idea why I said that! But seriously... CPI is expected to weaken... Somehow!

Not trying to bore you with data... But, since the dollar is soaring because of Middle East tensions... I thought it to be important to show why it shouldn't be! Oh, and there's one more thing... Big Ben Bernanke is going to give us a report on the Economy and Fed Policy on Wednesday... That ought to be interesting!

As one might expect, Gold has been well bid during the Middle East fighting, and Swiss francs has retained more of their value than other currencies... (that's currency parlance for it hasn't lost as much ground as other currencies!)

Japanese yen has really taken some huge losses since the Bank of Japan removed the zero interest rate policy. Chris told you on Friday that there is a clear distinction between a currency's knee jerk reaction and the long term consequences for the currency... Yen is going to be the currency that is now shown whenever, someone looks up that thought! I really think that yen is cheap, cheap, fun, fun.

Is your net worth that low ?

[Soju]

This thread seems to be coming true.

From its start in July, we are now half way to Christmas, and what are we seeing?

Dollar slipped 10% relative to the pound and baht (which are my income and expenditure currencies), US housing market stalled, corn futures up 30% and wheat futures up 40%.

Presumably, next comes a lot of Americans realising they are in negative equity on their houses, and higher food prices pushing up the true inflation rate.

What will the reactions be?

I am staying to watch the second half of this performance, and meanwhile buying all the gold that I can afford whilst it is so cheap.

Looks like we are in for bumper rice and sugarcane harvests here.

Bangkok floods, but our crops thrive, and we have been getting fish for free just by picking them up from where the overflow from the storm drain comes along the side of the soi.

Corn and wheat going up should help to raise the demand for rice and its price. But I have no faith in the sugar price holding up if times turn hard, as 60% of it goes into fizzy drinks and people can cut those out of their purchasing very easily.

I certainly wouldn't go so far as to say this thread is coming true. The OP predicted a total collapse of the USD by October or November, and it is now already October...

a dollar worth a penny and a loaf of bread cost $100.dollars

A 10% drop is certainly nowhere near a 99% drop as predicted by the OP.

[lannarebirth]

This thread seems to be coming true.

From its start in July, we are now half way to Christmas, and what are we seeing?

Dollar slipped 10% relative to the pound and baht (which are my income and expenditure currencies), US housing market stalled, corn futures up 30% and wheat futures up 40%.

Presumably, next comes a lot of Americans realising they are in negative equity on their houses, and higher food prices pushing up the true inflation rate.

What will the reactions be?

I am staying to watch the second half of this performance, and meanwhile buying all the gold that I can afford whilst it is so cheap.

Looks like we are in for bumper rice and sugarcane harvests here.

Bangkok floods, but our crops thrive, and we have been getting fish for free just by picking them up from where the overflow from the storm drain comes along the side of the soi.

Corn and wheat going up should help to raise the demand for rice and its price. But I have no faith in the sugar price holding up if times turn hard, as 60% of it goes into fizzy drinks and people can cut those out of their purchasing very easily.

The thing about the Pound is, it's got those 2 weekly gaps (circled) in it's chart. It's never not filled a gap in it's chart, at least for the 30 years of data I have. If it does, or how, is the question. Good luck.

http://stockcharts.com/h-sc/ui?s=$xbp...&listNum=10

[kdvsn]

This thread seems to be coming true.

From its start in July, we are now half way to Christmas, and what are we seeing?

Dollar slipped 10% relative to the pound and baht (which are my income and expenditure currencies), US housing market stalled, corn futures up 30% and wheat futures up 40%.

Presumably, next comes a lot of Americans realising they are in negative equity on their houses, and higher food prices pushing up the true inflation rate.

What will the reactions be?

I am staying to watch the second half of this performance, and meanwhile buying all the gold that I can afford whilst it is so cheap.

Looks like we are in for bumper rice and sugarcane harvests here.

Bangkok floods, but our crops thrive, and we have been getting fish for free just by picking them up from where the overflow from the storm drain comes along the side of the soi.

Corn and wheat going up should help to raise the demand for rice and its price. But I have no faith in the sugar price holding up if times turn hard, as 60% of it goes into fizzy drinks and people can cut those out of their purchasing very easily.

How do you figure that this thread has been coming true? The dollar has not slipped 10% versus the pound nor other major currencies since the start of this thread, in fact it has been flat against the pound and has strenghened slighthly against the Yen, Euro, and gold. The thread was started on July 9 when one dollar would buy you 114 Yen, 0.78 Euros, or 0.54 Pounds and an ounce of gold costs $629. Today one dollar will buy you 119 Yen, 0.80 Euros, or 0.54 Pounds and an ounce of gold costs $576.

Edited October 12, 2006 by kdvsn

[lannarebirth]

This thread seems to be coming true.

From its start in July, we are now half way to Christmas, and what are we seeing?

Dollar slipped 10% relative to the pound and baht (which are my income and expenditure currencies), US housing market stalled, corn futures up 30% and wheat futures up 40%.

Presumably, next comes a lot of Americans realising they are in negative equity on their houses, and higher food prices pushing up the true inflation rate.

What will the reactions be?

I am staying to watch the second half of this performance, and meanwhile buying all the gold that I can afford whilst it is so cheap.

Looks like we are in for bumper rice and sugarcane harvests here.

Bangkok floods, but our crops thrive, and we have been getting fish for free just by picking them up from where the overflow from the storm drain comes along the side of the soi.

Corn and wheat going up should help to raise the demand for rice and its price. But I have no faith in the sugar price holding up if times turn hard, as 60% of it goes into fizzy drinks and people can cut those out of their purchasing very easily.

How do you figure that this thread has been coming true? The dollar has not slipped 10% versus the pound nor other major currencies since the start of this thread, in fact it has been flat against the pound and has strenghened slighthly against the Yen, Euro, and gold. The thread was started on July 9 when one dollar would buy you 114 Yen, 0.78 Euros, or 0.54 Pounds and an ounce of gold costs $629. Today one dollar will buy you 119 Yen, 0.80 Euros, or 0.54 Pounds and an ounce of gold costs $576.

With perhaps, better days ahead. TWT:

http://stockcharts.com/h-sc/ui?s=$USD...2&listNum=1

[Gary A]

The US stock market is robust and here is why;

WASHINGTON (Reuters) -- The budget deficit narrowed to $248 billion in the fiscal year just ended from $319 billion in 2005 in spite of record spending, as revenues were the highest ever, the Treasury Department said Wednesday.

It was the smallest budget deficit since a gap of $157.8 billion in 2002.

The 2006 figure compares to an estimate of $250 billion issued by the nonpartisan Congressional Budget Office on Friday. In its last budget forecast in July, the Bush administration had said it expected the 2006 deficit to come in at $296 billion.

EDIT _ More;

Revenues were $2.407 trillion, and outlays were $2.654 trillion, the Treasury said. The government's fiscal year ended Sept. 30.

President Bush in February 2004 set a goal of cutting the deficit in half from a projected peak in fiscal 2004 of $521 billion, or 4.5 percent of gross domestic product, although the actual deficit for that year was $412.7 billion, or 3.6 percent of GDP.

I think I'll keep my dollars. I really don't see the dollar collapsing.

Edited October 13, 2006 by Gary A

[lannarebirth]

The US stock market is robust and here is why;

WASHINGTON (Reuters) -- The budget deficit narrowed to $248 billion in the fiscal year just ended from $319 billion in 2005 in spite of record spending, as revenues were the highest ever, the Treasury Department said Wednesday.

It was the smallest budget deficit since a gap of $157.8 billion in 2002.

The 2006 figure compares to an estimate of $250 billion issued by the nonpartisan Congressional Budget Office on Friday. In its last budget forecast in July, the Bush administration had said it expected the 2006 deficit to come in at $296 billion.

EDIT _ More;

Revenues were $2.407 trillion, and outlays were $2.654 trillion, the Treasury said. The government's fiscal year ended Sept. 30.

President Bush in February 2004 set a goal of cutting the deficit in half from a projected peak in fiscal 2004 of $521 billion, or 4.5 percent of gross domestic product, although the actual deficit for that year was $412.7 billion, or 3.6 percent of GDP.

I think I'll keep my dollars. I really don't see the dollar collapsing.

Bounce or bust time in Japan:

http://stockcharts.com/h-sc/ui?s=$XJY...&listNum=10

[NovaBlue05]

purchasing very easily.

How do you figure that this thread has been coming true? The dollar has not slipped 10% versus the pound nor other major currencies since the start of this thread, in fact it has been flat against the pound and has strenghened slighthly against the Yen, Euro, and gold. The thread was started on July 9 when one dollar would buy you 114 Yen, 0.78 Euros, or 0.54 Pounds and an ounce of gold costs $629. Today one dollar will buy you 119 Yen, 0.80 Euros, or 0.54 Pounds and an ounce of gold costs $576.

I was wondering the same as you but, since I am not a financial genius like some on this forum, I figured I was just reading the charts wrong...or upside down...or something.........

[ding]

lannarebirth, I don't see where your source cited the fact that oil cartels set the price on oil. He asserts that oil prices are viewed as mystical leads, and that equities lag.

In fact, Chavez is busily lining up a furtherance of the oil cartel paradigm with Iran and Russia.

USA will crash if 2 things happen, I think;

1) China, the holder of US debt, gets pissed for any reason with the whiskey throttle idiots in power in the US now.

2) China asseses that the US market is tapped out and can no longer buy more goods from China than China can get by selling off the US debt in the overnight.

Expect the Bush2 fiasco to cause an oil rich Islamic state in Iraq, and throw nukes into the mix -Pakistan and Iran.

The USA is an economic house of cards that will bring many western economies to its knees. These are historic times. Can't control it, but can duck and cover in a good faith effort.

my .02

Free and worth every satang.

Edited October 14, 2006 by ding

[lannarebirth]

lannarebirth, I don't see where your source cited the fact that oil cartels set the price on oil. He asserts that oil prices are viewed as mystical leads, and that equities lag.

In fact, Chavez is busily lining up a furtherance of the oil cartel paradigm with Iran and Russia.

I'm not sure to which post you're referring ding. As far as I know Goldman Sachs sets oil prices. The day they were claiming that oil was going to $105/bbl was the day they took one of the largest short positions in history. I guess when they cover that position oil prices will rise again.

[backflip]

"As far as I know Goldman Sachs sets oil prices. "

I have no idea where you get this stuff, but Goldman Sachs does not set oil prices.

[lannarebirth]

"As far as I know Goldman Sachs sets oil prices. "

I have no idea where you get this stuff, but Goldman Sachs does not set oil prices.

Yes, I know that. I guess the irony in my post went over your head. Traders set oil prices. Goldman Sachs are traders. When oil was at it's highs they suggested it would go much higher, while at the same time selling out their long position and going short in a really big way. Let me put it another way. Gamblers and liars set the price of oil.

Edited October 14, 2006 by lannarebirth

[cclub75]

I have no idea where you get this stuff, but Goldman Sachs does not set oil prices.

No of course.

But... they could influence... the price...

Markets now are all derivatives... Electronic/virtual money, with astonishing figures.

And he's right to speak about Goldman Sachs.

http://www.economist.com/opinion/displayst...tory_id=6855910

They have a total exposure of... more than 1 trillions USD.

[Thumchok]

Well , I don't know too much about economics etc. But I have worked in the oil industry for around 18 years . I always thought that OPEC set the oil prices by means of supply and demand . The prices were set higher as there are concerns of a world shortage , so more money was needed for exploration . The future will hold steady for at least another three years as I see it at this point . There is more work around than I have ever seen before , there are many rigs being built at present and there are not enough quallified personnell to man them .

That is all I know ,

But like I said I am not an economist .

Cheers ,

[lannarebirth]

Well , I don't know too much about economics etc. But I have worked in the oil industry for around 18 years . I always thought that OPEC set the oil prices by means of supply and demand . The prices were set higher as there are concerns of a world shortage , so more money was needed for exploration . The future will hold steady for at least another three years as I see it at this point . There is more work around than I have ever seen before , there are many rigs being built at present and there are not enough quallified personnell to man them .

That is all I know ,

But like I said I am not an economist .

Cheers ,

OPEC sets production levels not price. They seldom keep to the level of production they set, and there are other oi producing nations that are not members of OPEC.

[Thumchok]

Well , I don't know too much about economics etc. But I have worked in the oil industry for around 18 years . I always thought that OPEC set the oil prices by means of supply and demand . The prices were set higher as there are concerns of a world shortage , so more money was needed for exploration . The future will hold steady for at least another three years as I see it at this point . There is more work around than I have ever seen before , there are many rigs being built at present and there are not enough quallified personnell to man them .

That is all I know ,

But like I said I am not an economist .

Cheers ,

OPEC sets production levels not price. They seldom keep to the level of production they set, and there are other oi producing nations that are not members of OPEC.

Is it true that Russia joined OPEC a couple of years ago ? What other countries that are major suppliers are left ?

[lannarebirth]

Well , I don't know too much about economics etc. But I have worked in the oil industry for around 18 years . I always thought that OPEC set the oil prices by means of supply and demand . The prices were set higher as there are concerns of a world shortage , so more money was needed for exploration . The future will hold steady for at least another three years as I see it at this point . There is more work around than I have ever seen before , there are many rigs being built at present and there are not enough quallified personnell to man them .

That is all I know ,

But like I said I am not an economist .

Cheers ,

OPEC sets production levels not price. They seldom keep to the level of production they set, and there are other oi producing nations that are not members of OPEC.

Is it true that Russia joined OPEC a couple of years ago ? What other countries that are major suppliers are left ?

No, I don't think Russia has joined OPEC, nor Mexico nor Azerbaijan, nor Kazakstan, nor Oman, nor USA, nor Great Britain nor Scandinavian producers.

http://en.wikipedia.org/wiki/Opec#Membership

[Thumchok]

OPEC sets production levels not price. They seldom keep to the level of production they set, and there are other oi producing nations that are not members of OPEC.

Is it true that Russia joined OPEC a couple of years ago ? What other countries that are major suppliers are left ?

No, I don't think Russia has joined OPEC, nor Mexico nor Azerbaijan, nor Kazakstan, nor Oman, nor USA, nor Great Britain nor Scandinavian producers.

http://en.wikipedia.org/wiki/Opec#Membership

My apologies , Next time I'll do the research before thinking out loud .

[lannarebirth]

OPEC sets production levels not price. They seldom keep to the level of production they set, and there are other oi producing nations that are not members of OPEC.

Is it true that Russia joined OPEC a couple of years ago ? What other countries that are major suppliers are left ?

No, I don't think Russia has joined OPEC, nor Mexico nor Azerbaijan, nor Kazakstan, nor Oman, nor USA, nor Great Britain nor Scandinavian producers.

http://en.wikipedia.org/wiki/Opec#Membership

My apologies , Next time I'll do the research before thinking out loud .

No need. hel_l, I didn't know myself till you mentioned it and caused me to look it up.

[Thumchok]

Lanarebirth .

Here is a couple of other interesting sites on the subject .

One supports mine , and the other yours

http://www.opec.org/library/FAQs/aboutOPEC/q14.htm

http://www.opec.org/library/FAQs/aboutOPEC/q20.htm

and the last one to show why Russia is so important .

http://www.iags.org/n0929033.htm

Cheers , and good to see your studying .

[kdvsn]

lannarebirth, I don't see where your source cited the fact that oil cartels set the price on oil. He asserts that oil prices are viewed as mystical leads, and that equities lag.

In fact, Chavez is busily lining up a furtherance of the oil cartel paradigm with Iran and Russia.

USA will crash if 2 things happen, I think;

1) China, the holder of US debt, gets pissed for any reason with the whiskey throttle idiots in power in the US now.

2) China asseses that the US market is tapped out and can no longer buy more goods from China than China can get by selling off the US debt in the overnight.

Expect the Bush2 fiasco to cause an oil rich Islamic state in Iraq, and throw nukes into the mix -Pakistan and Iran.

The USA is an economic house of cards that will bring many western economies to its knees. These are historic times. Can't control it, but can duck and cover in a good faith effort.

my .02

Free and worth every satang.

The problem with predictions like these is nailing down the time frame and how to profit or at least protect oneself from it. Based upon prevailing public opinion (at least outside the US) of what is good, right and logical, by now the US should be mired in a state of desperate economic ruin. I mean, after 6 years under a wildly illiberal president, a major terrorist attack on the financial hub New York City, two wars, oil tripling in price, gold spiking to Carter era levels, and the world opinion being aligned against the US on almost every issue, it's wholly illogical that the US economy would be healthy enough that anyone could even argue that the economy was in decent shape.

The problem is that there is a large dose of rationalization in these prognostications. Though the reasons cited have evolved, there have been people predicting the imminent collapse of the US ever since its founding and much of the type there has been impeccable sounding logic behind the predictions. But take the current litany of reasons; most of the list is the same as what we heard at the end in the early to mid 80's. So now maybe all these factors that have been accumulating will finally come to roost. Maybe, but compared to investing along with America instead of against them, how would have you done if you had taken the same action to in the early 1980's when cognoscenti were scoffing at Ronald Reagan's unsophisticated policies and inferior intellect? It seems that even if the "end is near" that could mean that it all hits the fan in 2008, or 2015, or 2035, or not in our lifetime. No doubt the US will have an economic depression at some point, we know that such things go in cycles and if it happened before, as in the 1930's, something on a similar scale will happen again. But when and how do you protect yourself against it? And how do you know that the place that you move your money to will not be hurt by America's collapse as much as America is? I understand the tempatation to put all one's money in gold and wait it out, but I understood it in 1980 too.

[cclub75]

http://www.safehaven.com/article-6089.htm

A very good paper about financial markets with options.

Allow to understand that financial markets are no more driven by "demand" or "real" economic laws.

It's a game : a 3 dimensions game, with amazing leverage effect.

At that point, it makes sense to connect this game (that is neither good or bad, but just technical) with political motivations, therefore manipulations.

[unforgiven]

the yen carry trade,america's historic debtload,iran oil bourse in euros,russia oil for rubles,central

banks switching reserves out of dollars,america's real estate and stock market bubbles,etc.

one night this fall while america is sleeping,the rest of the world will be doing business and some central bank/country will dump their dollars causing others to which starts a panic stampede to get out of dollars before the next guy.last ones out will lose and since money is now electronically moved in seconds with a push of a button,america will wake up one morning this october or november and find out that trillions of dollars have come home to roost in an economy with trillions in debt making a dollar worth a penny and a loaf of bread cost $100.dollars will be become like latin american money used to be and america will have thousands of percent inflation like latin america used to have.the us gov will naturally close down us banks and seal safety deposit boxes in the national interest,there will be rioting and looting which will have the cities turned into warzones,

paris hilton and jessica simpson will be fashionably starving in their pradas,americans will be fleeing across the border into mexico,and america will disintegrate into self-governing territories and regions.

convert your assets into gold and swiss francs and euros now and preserve your wealth or even profit from the collapse.

that is all.

you must be smokin some good shit

[backflip]

"OPEC sets production levels not price."

That's because, according to an irony-free earlier post, Goldman Sachs sets oil prices!

Actually, the price is set by the old supply and demand curve. Boring, but true.

[Naam]

"OPEC sets production levels not price."

That's because, according to an irony-free earlier post, Goldman Sachs sets oil prices!

Actually, the price is set by the old supply and demand curve. Boring, but true.

and that's why i consider to cancel my "Bangkok Post" subscription. some of the postings in this thread yield more amusement than the daily cartoons.

[Naam]

"america will wake up one morning this october or november and find out that trillions of dollars have come home"

= aiming for next year's Nobel Prize in Economics!

[Bizz]

While the United States is running a record trade deficit of almost 7% of GDP, China is running a trade surplus of a similar size: as a result, China now has one of the largest stock of international reserves in the world. The key future development for 2007 and beyond is whether these imbalances unfold evenly or unevenly.

Indeed, China's recent decision to link the yuan to a basket of currencies, rather than having a fixed peg with the US dollar, is seen as a response to increasing international pressure. What is more important, however, are the political and economic implications of the decision toward greater exchange rate flexibility which in turn should affect the competitiveness of the Chinese exports and hopefully reduce the current account imbalances with the rest of the world -- and especially with the United States.

There are dark clouds on the horizon, including a likely downturn in the US housing market and the possibility that rising inflation would lead central banks to push interest rates up.

[lannarebirth]

"OPEC sets production levels not price."

That's because, according to an irony-free earlier post, Goldman Sachs sets oil prices!

Actually, the price is set by the old supply and demand curve. Boring, but true.

Both theories on price are incorrect, but I was joking. You, on the other hand appear to be serious.

[PeaceBlondie]

I like post #111 by kdvsn. There appears to be no totally rational explanation as to how the USA economy can suspend a house of cards in thin air, yet there they hang, defying gravity. Everything I have - US pensions, mutual fund, cash deposits - are denominated in US dollars. Was I supposed to move to Kazakhstan or Siberia at age 22, and earn my pensions in rubles or kzxstglies? Was Alan Greenspan the most powerful man in the world, or the ugliest, fattest, naked emperor?

Politically, I suspect that this Bush administration has made too many enemies overseas for other nations to jump in and support the greenback if it falls. Two proverbs come to mind: "pride goes before destruction" and 'great was the fall of it."

[cclub75]

I like post #111 by kdvsn. There appears to be no totally rational explanation as to how the USA economy can suspend a house of cards in thin air, yet there they hang, defying gravity. Everything I have - US pensions, mutual fund, cash deposits - are denominated in US dollars. Was I supposed to move to Kazakhstan or Siberia at age 22, and earn my pensions in rubles or kzxstglies? Was Alan Greenspan the most powerful man in the world, or the ugliest, fattest, naked emperor?

Politically, I suspect that this Bush administration has made too many enemies overseas for other nations to jump in and support the greenback if it falls. Two proverbs come to mind: "pride goes before destruction" and 'great was the fall of it."

Zimbabwe would have been a good choice too.

As for the "enemies", I guess it could be slightly more complicated.

China now has 1 000 billions USD in reserves (due to huge trade surplus).

So would it be in their interest to let the USD free falling ?

At one point, I imagine that it could be a master plan from the US : their debt is so monstruous that... actually no one would have any interest to let the currency goes down : they are stucked with mountains of USD. So they keep climbing... And the system continues.