If the view of
this crowd on the USD is more akin to Mr. Billâ€™s predicament, then its view on
inflation is more akin to Chicken Little...the sky is falling. Deficit
spending and Fed monetization is inflation in spades. Never mind that
what money has been created is a drop in the bucket of wealth that was
destroyed by the crisis. Nor that banks are more comfortable earning zero
holding reserves t the Fed rather than lending them to businessâ€¦large ones,
much less small ones. And households donâ€™t want any more debt. They
want to pay it down â€“ just look at the huge decline in consumer credit in the
last 7 months. Supply and demand curves for credit have both shifted
inward. Do the Rick Santelliâ€™s of the world think the Fed is
relishing in the fact that it has expanded its balance sheet by a factor of 2
by adding zeros to its balance? Or are Fed officials masters of deception
and really donâ€™t mean it when they say the balance sheet will contract and
liquidity provisions reversed once the private sector is on a sustainable path
(basis for a dollar recovery)? But illogic seems to run thick in the
policy discourseâ€¦gold is up because of inflation expectations are elevated in
one of the least liquid markets and bond yields are low not because inflation
expectations and monetization are an issue but because of manipulation in the
most liquid asset market (FX excluded).
Geithner, Bernanke and any reasonable observer agrees that the current policy
mix is unsustainable and over time and will leave the USD a second rate
(non-reserve status) currency in the long-run unless deficits (long-term
liabilities) and Fed balance sheet expansion are first contained and then
reversed. This is a particularly difficult problem if you believe the
crisis has changed US consumer behavior permanentlyâ€¦with the aging boomers and
among them I think it hasâ€¦growth as a ticket out of accommodative policy
reversal is going to have to come from some other non-governmental source like
exports or a major new technology revolution (energy, digital, medicalâ€¦) not
now foreseen (wealth creation machine). But these are long-run stories
and what matters now is the next 12 months. Positive fat tail outcomes
are no way to plan the long-run and in the medium-run US authorities are going
to have to do what they have been unable to to dateâ€¦convince markets they can
downsize (in either political party).
And oil priced
in euros or yen or yuan? UK Independent report has been denied by every
state mentionedâ€¦no secret meeting, no clandestine effort to end the pricing of
oil in USD unless we count Iran and Venezuela.
China wonâ€™t stand for a weaker dollar we are
told by the Mr. Bills of the capital markets. What BS. China is so into the USD that there is no way
out. For China to say donâ€™t let the USD weaken or else
after amassing $3trln in reserves is laughable. Where is the gun pointed
at China making it buy dollars to peg the yuan
for the last decade? China was free to choose. They could
have bought other currencies or none at all and helped prevent the build-up in
global imbalances that allowed cheap credit to dope markets and regulators into
excessive complacency (stupidity). China holds up half the sky of this gigantic
problem (bad policy here and there). And in another irony the
neo-Austrian set mostly is infatuated with Chinaâ€¦the only other seriously
planned economy since the collapse of the Soviet Unionâ€¦reminds me of the hero
worshipping of Japan in the 1980â€™sâ€¦letâ€™s not confuse mercantilism with free
So raise the
Mr. ($) Bill alarm on the USD loudly and often and the vocal minority can
hijack public discourse and policy to reverse the USD fortune. Malpass
said all Geithner needs to do is say US wants a stronger dollar rather than a
strong dollar and Mr. Bill will live another day. But what about
the fact that the market is pricing the USD (a floating currency) and based on
fundamentals? The USD is back to where it was before the crisisâ€¦weakening
as markets normalize and worldâ€™s investment and trading classes rush from risk
to risk free is no longer part of the mindset. If the RBA is the
spark to a prairie fire of rate hikes across G20 in the next 6 months, I will
eat my didgeridoo. Frankly the RBA will be hard pressed to continue raising
rates alone short of taking its currency to levels that may make China (pegged to USD) look elsewhere for
Aussie minerals. The market has priced 150bps tightening through June
2010. My guess is we will be lucky to see half that and the RBA may end
up like the BOE (in 2007) with hikers remorse.
Lastly, a weak
dollar is what the doctor ordered. If you believe in the vastly liquid
market of US Tsys is a better indicator of inflation expectations than the
rarified air of the gold market, low inflation is on the horizon indefinitely
and Fed inflation credentials are fully intact. Why would any reasonable
central banker or finance minister want to oppose the only escape hatch for
private growth by engineering (assuming it is possible) a USD rally?
Printing money with a low multiplier is not inflationary outside of asset
prices. Ahead the c bankers may have to lean into asset prices some to
prevent new bubbles from forming while keeping traditional and non-traditional
policy accommodative as the real economy crawls back to life. But right
now is not the time to rush to the defense of the USD and I would go with the
IMFâ€™s WEO conclusion on exchange ratesâ€¦the USD is not significantly undervalued
or overvalued. Asia
is where the misalignments are in FX and to a lesser extent Latin Americaâ€¦pre-emerging-market currency crisis
norms should be permitted. Inflation risks are real in Asia much sooner than they are in the US, Europe or Japan and these economies scream out for
I think the
IMF, BIS and G20 need to look at limits on government foreign reserve
accumulation. A sizeable chunk of the worldâ€™s savings is in foreign
reserves held by central banks who actively manage their currencies (mostly
emerging markets and Japan pre-2004). In light of the need for risk
capital in the world to fill massive withdrawal of private risk capital, having
all these global savings (FX reserves) in cash and government paper is hugely
inefficient on top of being distortionary. Maybe it is time for
regulatory reform for the regulators.
Rule of thumb
is be careful of analysts and economists who raise politics to a principle and
then start with economic analysis. No I am not throwing stones in a glass
house. This is kind of like asking a trader long several yards of AUD against
USD to explain what might make the USD recover in the near-term.
Forex Trading News
Daily Forex Market News Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Forex News Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."
Elevate Your Trading With The Amazing Trader!
The Amazing Trader includes:
Actionable trading levels delivered to YOUR charts in real-time.
looking for your first broker or do you need of a new one? There are
more critical things to consider than you might have thought.
We were trading long before there were online brokers. Global-View
has been directly involved with the industry since its infancy. We've
seen everything and are up-to-data with recent regulatory changes.
The Global-View Forex Forum is the hub for currency trading on the web. Founded in 1996, it was the original forex forum and is still the place where forex traders around the globe come 24/7 looking for currency trading ideas, breaking forex news, fx trading rumors, fx flows and more. This is where you can find a full suite of forex trading tools, including a complete fx database, forex chart points, live currency rates, and live fx charts. In addition, there is a forex brokers directory where you can compare forex brokers. There is also a forex brokers hotline where you can ask for help choosing a forex broker that meets your individual fx trading needs. Interact on the same venue to discuss forex trading.
The forex forum is where traders come to discuss the forex market. It is one of the few places where forex traders of all levels of experience, from novice to professionals, interact on the same venue to discuss forex trading. There is also the GVI Forex, which is a private subscription service where professional and experienced currency traders meet in a private forex forum. it is like a virtual forex trading room. This is open to forex traders of all levels of experience to view but only experienced currency tradingprofessionals can post.
Currency trading charts are updated daily using the forex trading ranges posted in the Global-View forex database. You will also find technical indicators on the fx trading charts, e.g. moving averages for currencies such as the EURUSD. This is another forex trading tool provided by Global-View.com.
The forex database can be used to access high, low, close daily forex ranges for key currency pairs, such as the EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD, AUD, NZD and major crosses, including EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF and CHFJPY. Data for these currency trading pairs dating back to January 1, 1999 can be downloaded to an Excel spreadsheet.
Forex chart points are in a currency trading table that includes; latest fx tradinghigh-low-close range, Bollinger Bands, Fibonacci retracement levels, daily forex pivot points support and resistance levels, average daily forex range, MACD for the different currency trading pairs. You can look on the forex forum for updates when one of the fx trading tools is updated.
Global-View also offers a full fx trading chart gallery that includes fx pairs, such as the EURUSD, commodities, stocks and bonds. In a fx trading world where markets are integrated, the chart gallery is a valuable trading tool. Look for updates on the Forex Forum when the chart gallery is updated.
Global-View.com also offers a forex blog, where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at Global-View.com. This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum, there are also Member Forums available for more in depth forex trading discussions.
WARNING: FOREIGN EXCHANGE TRADING AND INVESTMENT IN DERIVATIVES
CAN BE VERY SPECULATIVE AND MAY RESULT IN LOSSES AS WELL AS PROFITS. FOREIGN
EXCHANGE AND DERIVATIVES TRADING IS NOT SUITABLE FOR MANY MEMBERS OF THE
PUBLIC AND ONLY RISK CAPITAL SHOULD BE APPLIED. THE WEBSITE DOES NOT TAKE
INTO ACCOUNT SPECIAL INVESTMENT GOALS, THE FINANCIAL SITUATION OR SPECIFIC
REQUIREMENTS OF INDIVIDUAL USERS. YOU SHOULD CAREFULLY CONSIDER YOUR FINANCIAL
SITUATION AND CONSULT YOUR FINANCIAL ADVISORS AS TO THE SUITABILITY TO YOUR
SITUATION PRIOR TO MAKING ANY INVESTMENT OR ENTERING INTO ANY TRANSACTIONS.