Red Pill/Rico:
The detachment doesn't happen until in your face, not stealth, QE is happening.
I've been chewing on a thesis about this while I wasn't trading. Isn't researched or fully legged yet, but...
Par Eur/USD CAN NOT happen. It would stifle too much activity around the world as the reserve currency would squash all others and light too many fires under commods. Other countries would retaliate via their own debasement or some evolution of a trade war. I've been saying 1.25ish is the place where things get triggered. Nothing to support it, just my own observations based upon where the dollar could be in that situation. If Big Ben sees an ultra strong dollar he will use that as cover tied in with support of labor and .... housing. The next QE will be an all out assualt on MBS's to both "save" the banks and "stimulate" the economy. The real motive will be to lower the dollar even though that can not be stated directly. The path to it can however, which is an announcement of QE3 wrapped in the political cover of housing. He can use that cover to go big...very very big, to "save" mom and pop homeowner's real estate values. That is the only politically palpable outcry, which will of course be backed by Obummer, even though everyone hates the banks. This time the message will be very controlled and masterfully crafted to make the masses feel as if this is for them, NOT the banks. The argument will be that if we help the bank's books re real estate the prices will not continue to fall since the banks will not have to dump the mountain of foreclosures they have, they can slowly do it, or create some sort of vehicle that allows renting from the banks. I think I read something about that a few months ago.
The timing is tricky. They can't do it too early since the election is coming they want the best bang for it. Too late and the USD runs away from them. My guess is someone is very carefully trying to glidepath the Euro so that it doesn't come apart yet. This is why we are supporting via swap lines etc. Anything that can be done to slow the glidepath for a few months will be done, short of all out in your face QE3.
QE3 is coming. My guess is right around the time the repub nominee starts really taking shots at Obummer and he feels it. Once that happens it's game on.
This is just my opinion, nothing to support it yet, and it is NOT tradeable right now. Only posted since it's slow and the topic is here already. Poke some holes in it guys. Interested in the discourse...maybe a good weekend topic for us to debate like the bull v bear a few weeks back???
Comments for "Pailin's Trading Corner"
Thanks for posting that. Late last year I mentioned gold to my father (a traditional equities-forever guy) and he responded - too risky, it's all BS, gold has done nothing in 30 years. Instead he recommended silver, platinum and palladium because the industrial use would cushion price falls.
I've sent him this chart :)
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I never buy at the bottom and I always sell too soon. -Baron Rothschild
Man is a credulous animal, and must believe something; in the absence of good grounds for belief, he will be satisfied with bad ones. -Bertrand Russell