Forum - US Dollar Index 14-Year Chart (Topic)

speculator

Posted Anonymously

15 years ago

Jul 2, 2009 7:37

ashraf,

the uk is in a similar position and it has not the benefit of being the world's reserve.

i agree the dollar has been in a bear for many years which means that furter weakness will be limited. the dollar used to be very expensive till 2000.

alive

New Jersey, United States

Posts: 5

15 years ago

Jul 2, 2009 2:09

Speculator, i completely agree that dollar is in a bull market. Europe and other countries are suffering the same exact way US is suffering.

Ashraf Laidi

London, UK

Posts: 0

15 years ago

Jul 2, 2009 0:46

carlco, china has all the reserves and cushion to handle any train wreck. US is already seems in the wreck and as Bill Gross said in his editorial today (see my previous tweet) The current stalling trend will remain for at least one generation.

spec, USD remains in a secular bear market and 2008-09 rebound proved to be just a correction as was the case in 2005. See the historical mutilyear USDX chart in the last chapter of my book. As for the shrinking CA deficit of the US you speak about, yes it shrinks due to shrinking US consumption. But it is MORE THAN offset by that thing called the swelling budget deficit. Take a moment and think what would debt-dependent and consumption-dependent US economy will survive with weak consumption.And citibank raising credit card rates is no good either.

Ashraf

speculator

Posted Anonymously

15 years ago

Jul 1, 2009 23:48

may i add that we need to look at ALL fundamentals within the usa and other countries if we try to establish longer term trends. the fact that countries are monetizing their debt other positive fundamentals may more than offset the bad that they do. so lets not look at anything in isolation and get carried away.

feel free to challenge me with particular emphasis on the dollar as i strongly believe we are in for a multi year dollar bull.

speculator

Posted Anonymously

15 years ago

Jul 1, 2009 23:44

if the US maintain a low level of consumption for a prolonged period, their current account deficit would probably narrow and help support the dollar index as less dollars need be sold off for imports. this is obviously text book economics but it could still play a role.

Steven Blyth

London, UK

Posts: 148

15 years ago

Jul 1, 2009 22:00

I think China will be stimulating its economy in many ways. One which is obvious is where the government spends to develop and modernize its infrastructure. This is the first step but its a first stage ignition. The other way is that it needs to stimulate a more vibrant economy within and as the Chinese are traditionally big savers. That is a problem. So in order to become less dependent on the rest of the world for the exports they want the economy to be vibrant enough internally to support the industries. I.e Chinese taking a bigger slice then they have of supporting the economy. This will mean getting them to spend more of their savings as well as getting comfortable with things like manageable debt. Not a bad thing if like you say it doesn't get out of control.

Steven Blyth

London, UK

Posts: 148

15 years ago

Jul 1, 2009 21:59

I think China will be stimulating its economy in many ways. One which is obvious is the where the government spends to develop and modernize its infrastructure. This is the first step but its there are a first stage ignition. The other way is that it needs to stimulate a more vibrant economy within and as the Chinese are traditionally big savers. That is a problem. So in order to become less dependent on the rest of the world for the exports they want the economy to be vibrant enough internally to support the industries. I.e Chinese taking a bigger slice then they have of supporting the economy. This will mean getting them to spend more of their savings as well as getting comfortable with things like manageable debt. Not a bad thing if like you say it doesn't get out of control.

Carlco

bristol, UK

Posts: 151

15 years ago

Jul 1, 2009 20:55

I wonder if China have read this thread, G8 demands hey? so much for global collective togetherness on tackling the worst financial crisis since the great depression, i thought the great depression was exaggerated by protectionism. I thought US was China's trading partner. (more like IMPORTING partner) China have started to follow this unsustainable model of loans to stimulate a domestic consumer debt driven growth,(have they not been watching the news on the financial crisis?) it's a train wreck waiting to happen!! how far does $2trillion go in China? they haven't got the commercial infrastructure to do adopt this policy, even it did we could be in a sideways market for years. However bitter a pill it is to swallow, helping the developed world out of recession is a quicker way out of this mess. Im no economist you can probably tell, but there's something ominous about current attitudes across the globe, nerves are starting to fray.

Ashraf Laidi

London, UK

Posts: 0

15 years ago

Jun 28, 2009 15:55

carlco, the US hand that fed china was not by choice but by obligation. china CAN AFFORD TO criticize the US and all the US can do is watch and listen. i.e. CHina is NOT RISKING anything by lecturing, while all the US has to do is pray and maintain the status quo, while china is gradually working at removing that, by getting its trading partners to pay in yuan. this is taking time, but it is taking place.

spec, w're due for a range-bound market for a long time. i doubt we could break above 1,000 S&P anytime this year. seems more we'll break below 800 towards 750s. not sure about 660 yet.

Ashraf

speculator

Posted Anonymously

15 years ago

Jun 28, 2009 11:46

whilst speculation against the dollar is with us, we can't discount the fact that US stock markets are trading in a strongly overvalued state based on historical PE. Therefore it is my belief that a downards correction in S&P etc will take place this year however it is not likely to be sharp but more gradual downtrend as demand dampens and panic selling will not occur.

but the issues is where does all the sidelined cash go? well if US treasury yields/bonds are favourable and stocks seem on a gruadual decline this year, the dollar will certainly be the most attractive short term choice due to satefy heaven and the usual inflows into the dollar when stocks decline.

as it is likely to be gradual, the dollar may not rise as quickly as it did in its last uptrend that started last year.

if you look at the dollar index it has been falling for a long time now. so we are not at a point where the dollar will keep falling but may rise slightly or trend sideways.