USD$: February 10, 2010
The entire financial world hinges on the U.S. dollar. What happens in the equity and bond markets, and indeed, all over the investment universe, from Shanghai to Dubai, is dependent entirely on a dollar down too far, too long, a dollar that bottomed out in late November 2009 at 74.5.
There are those in the investment advisory business who will claim that the phenomenon of a strong dollar won’t last forever, that the dollar is essentially better employed as wallpaper or commode tissue, and that at the hands of the Federal Reserve the greenback has been forever destroyed.
And they may be right. For as we know nothing lasts forever. But when you look at the only meaningful place to look, the chart, you see a dollar that’s winning, and dollar shorts who are running scared. And you will also see a trend being established. It is not important what the market gurus say, one must only be as happy to make money on a rising dollar as he is on a sinking one.
And why is the dollar rising? Because the rest of the world has not recovered from last year’s global recession with the same vigor or speed as America. In fact, in both Euroland and Japan the bleeding continues.
