Dollar Strengthening..lol wtf??

[socialize_me]

Asian markets are up, European futures are down, and the DOW futures are up about ~60. The Dollar is strengthening relative to most currencies which kinda blows my mind..

IBM apparently reported better-than-expected earnings..the stock is up about 6% in after hours, and people are expecting that should boost the NASDAQ tech stocks..predicting this market in the short term is getting ridiculous. Completely illogical...oil is dropping when the Dollar is weakening and demand doesn't seem to have dropped off much at all--not to mention gasoline is still well over $3/gallon nationwide after oil has dropped over $60 from its high in mid-July. Why in the hell is gasoline STILL so damn expensive if oil has lost that much ground?? boggles my mind..

[paulitics]

I think the dollar is strengthening "relative" to other currencies because other central banks are just now inflating their currency. We just got a head start a few years ago. Most of the high oil prices of the last few years is linked primarily to dollar devaluation. Price at the pump has to do with alot of other factors besides the price of crude.

[fr33domfightr]

Asian markets are up, European futures are down, and the DOW futures are up about ~60. The Dollar is strengthening relative to most currencies which kinda blows my mind..

IBM apparently reported better-than-expected earnings..the stock is up about 6% in after hours, and people are expecting that should boost the NASDAQ tech stocks..predicting this market in the short term is getting ridiculous. Completely illogical...oil is dropping when the Dollar is weakening and demand doesn't seem to have dropped off much at all--not to mention gasoline is still well over $3/gallon nationwide after oil has dropped over $60 from its high in mid-July. Why in the hell is gasoline STILL so damn expensive if oil has lost that much ground?? boggles my mind..


Regarding the strengthening dollar. I looked up the exchange rate of the Euro vs. Dollar and I couldn't believe it either. Then, this evening on the nightly news I see that many (all?) world countries central banks lowered their lending rates TODAY (ie. injected more money into their economies). Could this be the factor that changed the value of foreign currencies (and the Euro to the Dollar)?


FF

[Gigaplex]

I saw gasoline at under $3 today, no kidding. This is in Iowa.

Don't forget that there is an incredible amount of deflationary pressure. Parts of the market are inflating, parts are deflating and all this pressure from both sides makes things very volatile. So in the very short term it is really hard to say.

I wouldn't completely rule out deflation like everyone seems to do. Maybe $700 billion isn't enough to stop the market from correcting itself. It is an unbelievable amount of deflationary pressure and each time they do this, the deflationary pressure builds. One false move and the market could get it's chance to correct itself.

[The Good Doctor]

Yes and it will be temporary. The more the Fed Reserve prints the more it will go down.

I mean oil going down, gold going up, and the dollar going up slightly? Something is going on because gold and oil usually increase based on the dollar falling.


I think the dollar is strengthening "relative" to other currencies because other central banks are just now inflating their currency. We just got a head start a few years ago. Most of the high oil prices of the last few years is linked primarily to dollar devaluation. Price at the pump has to do with alot of other factors besides the price of crude.

[Razmear]

The dollar has fallen to 99 Yen, so it's not strengthening everywhere.

[Gigaplex]

I am almost certain that gold and silver are manipulated. My roommate has done extensive research in this area. The markets don't have the silver they say they do. It's just a bunch of paper with no silver behind the scenes! Well not all paper, but the point is there is more paper than silver.

[dwdollar]

You can't accurately judge inflation relative to other currencies right now. Central banks are printing everywhere.

It's going to hit Mainstreet with soaring consumer prices.

[Conza88]

http://www.x-rates.com/d/USD/AUD/graph120.html

Jesus Christ! Last month 1 Aussie dollar would buy practically 94 US cents...

Now it's crashed to 67 cents!!!

This is sooo fken irrational I don't know wtf is going on... it's all upside down.

*sigh*

Our economy ain't as bad as the US's technically... we aren't as exposed at all with our companies... and we've got epic resources to sell.... and we've not printing like insane amounts of money.. :eek:

Whyzzz :( I planned to come to the US next year... 65 cents aussie for 1 US dollar? You've got to be kidding me... the central bankers are rapists.

[RSLudlum]

You can't accurately judge inflation relative to other currencies right now. Central banks are printing everywhere.

It's going to hit Mainstreet with soaring consumer prices.

Maybe later on, but from what I'm hearing there might be some crazy Christmas sale battles among the retailers, but we never know just how the election will affect the market mentality. Don't ever forget just how much psychology plays in the market and mainstreet.

[RSLudlum]

Our economy ain't as bad as the US's technically... we aren't as exposed at all with our companies... and we've got epic resources to sell.... and we've not printing like insane amounts of money.. :eek:


Yeah, ya'll got a crap load of uranium over there!

Is the Australian sale of uranium to Russia still being halted?

[The Good Doctor]

Don't forget the panic selling and the tax selling at the end of the year.


Maybe later on, but from what I'm hearing there might be some crazy Christmas sale battles among the retailers, but we never know just how the election will affect the market mentality. Don't ever forget just how much psychology plays in the market and mainstreet.

[nbruno322]

Don't forget that markets are irrational in the short run and it doesn't help that the MSM has conditioned people to follow the market in the short term. Short run there may be some deflation, but in the long run, markets will act more rationally and the dollar will plummet.

For just the first two weeks in September, the Fed increased the TOTAL money supply by 8%. This is unprecedented. This stat comes from Casey Research, great guys who love gold and limited govt. Check them out.

[Conza88]

Yeah, ya'll got a crap load of uranium over there!

Is the Australian sale of uranium to Russia still being halted?

Good question. I'm not entirely sure. My Aussie politics gets sacrified a lil bit for the US side of things... arguably I am more affected by the US fed than by my own...

All rather retarded... the US really is the centre point of the world.... if Ron Paul got elected and a REAL person got into power... and started fixing shit up...

For every single other leader in the world it'd be so easy... "well, the US has done it.." - freedom, real true liberty... would spread like wild fire.

Rp could get in touch with all the 3rd world... practically advice their leaders wtf they should be doing.... Give them his PILLARS OF PROSPERITY book, lmao... implement true free trade with them....

Geezus christ, this is exactly why bullshit like addendum is put out to suppress the drive to get him elected in anyway shape or form.. even talked about...

He'd change the world in a heart beat.

Edit.... Hahaha man, I digressed something fierce then... :D

[ronpaulforprez2008]

'Gloom Boom & Doom' publisher Disses Bailout; Likes Dollar http://www.nakedcapitalism.com/2008/10/marc-faber-disses-bailout-plan-likes.html


"A stock rally in the event that a package is approved will be temporary and should be used as 'an opportunity' to sell"

[m72mc]

heh yeah dollar is up

here in sweden the pundits love it...cause the dollar is still weak and since it is up some now... at least you americans can afford something now....
it is very hard to export to you...when the dollar is worthless....

I think they are propping it up...

compared to the SEK the dollar has gone from 6sek:1$ to 7:1 the last month

but still around 2000 it was worth 14 sek : 1 $ so its still half of what it used to be...

Our export c always complain when the dollar is weak...

[The Good Doctor]

Got a link for that man? That is incredible!


Don't forget that markets are irrational in the short run and it doesn't help that the MSM has conditioned people to follow the market in the short term. Short run there may be some deflation, but in the long run, markets will act more rationally and the dollar will plummet.

For just the first two weeks in September, the Fed increased the TOTAL money supply by 8%. This is unprecedented. This stat comes from Casey Research, great guys who love gold and limited govt. Check them out.

[Xenophage]

You can't predict long-term trends by taking short-term samples. If you want to look at the real long-term trend, you have to include data over a long-term time frame, e.g. the last year or more. If you look at the data like that, absolutely the dollar is inflating.

Don't get in a hissy and start declaring broad economic principles over what the DOW does in the course of a single day.

[leonster]

Being in Korea and earning won, over the past six months I've seen the won go from about 900 won to the dollar, to now over 1400 won to the dollar--which blows for me, as I've lost about 35% of my paycheck in dollar terms, temporarily.

Here's what's happening, at least in Korea. Korean citizens and companies have had experience with the won fluctuating, especially in the 1997 IMF crisis, and they don't fully trust it as a store of value. In the past, Koreans always saw the US dollar as pretty rock-solid, so billions of dollars worth of currency have been traded over the past week or two, as people sell their won and buy dollars in an attempt to hold on to their money or profit. (If I had sold a ton of won for dollars several months ago, I could now buy the won back and have profited 35+%... but hindsight and all that.)

Eventually the won will hit rock bottom (in 1997 it hit 2000 won to one dollar briefly), then recoup its value as people and companies start to realize the massive reduction in the purchasing power of a dollar with the Fed's printing.

It could be three months or it could be three years, but the dollar WILL go back down. What's happening now is mostly people being afraid of their own currency's volatility, and wanting the "safety" (so they think) of holding dollars.



Edit: Like nbruno said... markets are irrational in the short term, as people are acting based on past history and not taking into account the reality of the US economy and dollar today. In the long term, the dollar will go down vs. other currencies (unless those currencies are inflated even MORE by their respective central banks.)

[MikeStanart]

I agree with a few of the posters above.

There will be hyper-inflation in the long-run. It just hasn't hit yet.

[acptulsa]

It will be everything they can do to keep this thing propped up until after the election. Doesn't look to me like they'll succeed. Either way, I've seen many elections and know what they're thinking when election days are nigh. Their idea of long-term thinking right at this moment is November Fifth, 2008.

[jrskblx125]

i think oil/gas prices are going down because they dont want the stockpiles to keep building up so they gotta sell some off since theres less demand...? run on sentence anyone?

[wizardwatson]

The article (par V specifically) gives a good explanation of why the dollar is strengthening.

Follow the Money (http://ftalphaville.ft.com/blog/2008/10/09/16850/follow-the-money-v/)

From the article:


This brings us to the last part of the puzzle: the behaviour of the exchange rate and international capital flows. The current crisis is remarkable because the currency of the country at the centre of the crisis (the US dollar) has strengthened substantially against the currencies of almost all its major trading partners. The dollar’s strengthening is counter-intuitive. It is as if the inhabitants of the building were running towards the seat of the fire rather than away from it after the fire alarm sounded.


Goes on to explain the 'why'

I also posted this over on this thread:

Bond Market Dislocation - The Detonator (http://www.ronpaulforums.com/showthread.php?t=162026)

[Johnnybags]

phenomenon. Emerging markets bets in the states are being repatriated causing a demand for dollars. Once this panic is over it probably drops again. If not the inflation rate in emerging countries is going to cause chaos.