As Jim Rogers would said, “when everyone is on one side of the boat…”
By Daniel at 17 December, 2009, 10:52 pm
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At least for now, the U.S. dollar IS THE GLOBAL RESERVE CURRENCY. While there has been some shift away from its use by some trading partners, most of the world still needs it to buy commodities, etc.
From the recent price action, it is evident that it is also THE “safe haven” currency. When there is fear in the markets the dollar is still where people put their money.
Now, don’t get me wrong, I’m convinved as any of you that the dollar is a SEVERLY FLAWED CURRENCY, but until price action indicates it as such one has to trade (stocks, FX, commodities) as it is currently viewed.
One last thing. WE ARE IN A DEFLATIONARY environment. When that is the case, the dollar goes up and pretty much everything else goes down. Oil hung tough today. Gold didn’t do as well, but gold is a complex commodity and not always correlated to the dollar. That said, obviously it didn’t like the dollar movement today or the deflationary undertones (FedEx) in the market.
Good luck!
- JRK
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