Quote:
Originally Posted by J. Abizeid  Manipulation is the name of the game but it has its own limitation.
It’s identified by its short life span before it reverses its own course. Those who lose their patience lose their shirts.
Looking at long term trends with no fundamental changes in market’s economy helps identify traps.
This summer oil prices is a good example.
As far as the US, its weak economy cannot sustain a strong dollar since the dollar is no longer its main export. Its economic outlook suggests it needs to bite the bullet and live with a weak dollar.
The way I look at it, it’s in my best interest to borrow a strong dollar but when time comes for me to pay it back, I want it to be smaller.
The US mushrooming debt is the dollars disease.
As far as Europe, they don’t have elections coming up. They don’t have a gas guzzling war. They are honest and transparent about their economy. And for the time being, they are recharging their batteries with low energy prices and competitive euro/exports that will help them take off within a few months. That is a problem for China which is the main dollar manipulator, and it will be acting accordingly. |
The problem with your argument is that it assumes that things are going very bad in the US while things are rosy in Europe. This is definitely not the case.
Low energy prices? Energy prices are the set worldwide and can only be affected by exchange rate in any given country, and taxes on energy in Europe are higher than the US
Euro exports? we just reached 1.40 yesterday, it needs a few months to have any significant impact on exports and even then 1.40 is still a high level to spark exports in any big way.
China the dollar manipulator? In fact it is the reverse. China's currency was pegged to the dollar for a very long time and it is the US which pressured China to revalue the yuan and it went from 8.23 to 6.85.