u.s. dollar
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Started by bear - Nov. 6, 2020, 12:07 p.m.


the moving averages came together,  and the dollar is not trying to move decisively lower. 

metals are moving opposite the buck now.  

the buck should hit its yearly low, then bounce.  

Re: u.s. dollar
By metmike - Nov. 6, 2020, 2:58 p.m.
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Thanks bear!

Re: u.s. dollar
By 7475 - Nov. 6, 2020, 9:05 p.m.
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There has been no rhyme or reason worthy of a predictor that I have seen for quite some while.

 3-4 days of election elation,relief and cornfusion results in down down down.

Time for a bounce I suppose-why not.

You bet I'll be watching but playing safe.

Thanks bear

Re: u.s. dollar
By wglassfo - Nov. 7, 2020, 1:38 a.m.
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A person might be tempted to think all major currencies will devalue, but if all currencies remain some what equal to each other, what is the problem?? If everybody is printing then the thinking goes as follows. How can our dollar, your dollar go down any more than some other currency. Everybody is printing, everybody is the same, everybody spends more than tax revenue, but everybody is sort of equal.. Yes we get some up and down, for various currencies but by and large everybody stays relatively the same

Once in a while you will see major re-adjustment as several yrs ago the BP lost a great deal of value. I don't think 3rd world countries with debt out the wazzo, and then try to print their way out of trouble qualify as serious currencies

So will the status quo remain

Some say all currencies will suffer a loss of confidence. I am in the camp who believes a loss of confidence will happen, I just don't know when. The Fed is seriously thinking about digital currency in your bank account. There is enough thoughts about the future of currencies, debt, deficits etc. you can take your pick from almost a dozen or more different thoughts

My thought is this:

I don't see how the major currencies can keep being printed in ever larger amounts, all of which is debt that nobody with any logic believes will ever be re-paid. That means old bonds at re-demption time need to find new buyers to "roll the debt" Plus gov't will spend money, a lot more than tax revenues and lately I think every major currency is being printed in larger amounts than the country has GDP. So what is the collateral. A promise to pay an I.O.U. If your biz does not generate enough profit to pay the mortgage, , your pay check does not allow enough to pay the car loan, would your banker extend more credit and let you re-fi [roll your debt] when your earnings don't support the payment. Not likely but gov't have been re-fi their debt for ages and today when we talk trillions. that is serious money, with no hope of generating enough income to pay the mortgage

Eventually some country will have a problem trying to find investors to buy their debt. Then that country tries to print their way out  of trouble, But then another country has a problem and before you know it, bonds are on sale for a small % of face value. Then the dominos fall, as nobody wants to hold cash/bonds, mortgages etc and the system fails, perhaps faster than you could ever imagine. A false de-valuation then bonds re-gain value but eventually, the bonds are virtually worthless, for the simple reason that every country wants to sell bonds but the buyers want no part of a worthless I.O.U. Would you trade oil for a worthless I.O.U??? Paper script, fiat with rapid devaluation, because the world is flooded with trillions of paper script and more script being printed. When does somebody ask for the collateral behind this script??/bonds/fiat call it what you want. It's really just an empty promise for the simple reason nobody will re-pay the debt, just like your car loan that you have no intention of paying

That is why an investor should think of assets that will hold or even increase in value as the currency buys less and less, such as precious metals

At least that is my long term thoughts about currencies and why I think this way

Countries can print currency but nobody can print PM

Re: u.s. dollar
By bear - Nov. 7, 2020, 3:36 p.m.
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that should have said... the dollar is now moving lower. 

instead of saying the dollar is not moving lower. 

as bidens lead grew, the dollar declined.  we'll see if that trend continues.

Re: u.s. dollar
By wglassfo - Nov. 8, 2020, 11:46 a.m.
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Tks Bear

I hesitate to question your posts as I am obviously not educated in economics

But once in a while I will post a different  opinion to your post

None the less your economic thinking is a great asset to the forum, and I take the logic of your posts seriously

Re: u.s. dollar
By wglassfo - Nov. 9, 2020, 5:03 p.m.
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Today the treasury put some 54 billion of 3 yr treasury notes up for auction

The interesting part that caught my attention was the amount and lack of foreign investment demand

Instead of a normal 55 % [approx] demand on average, today the demand was only 39 % [approx] for 3 yr bills

In other words the gov't is rolling debt and in larger amounts. This forced dealers to come in and make the market. I won't get into future int rate guesses, as nobody knows much of anything. But the trade is assuming with a great deal of confidence another stimulus bill. The unknown is what amount will the stimulus be and also the majority in the senate will have a big influence on the stimulus. Also  if before Jan or after, plus the Biden win is not carved in stone, although the media would have you believe Biden is the president elect. A ton of unknowns

All of which might mean we have seen the 1st green shoots of inflation "or" a loss of confidence in the USD

Todays auction is not confirmation of any thing. Just interesting if you follow this sort of thing