Carrying The Dollar

94
Fri, Jan 13, 2012 - 10:25am

Lots of stuff going on but not a lot of time today so I have to keep this relatively brief.

As you look at the charts below, I want you to consider something. Much has been made of the idea that you do not want your currency to be the funding vehicle of the "carry trade". The idea is that a world looking for growth will short the crap out of your currency and use the proceeds to fund "risk" trades. Recently, we've all witnessed what seems to be a direct correlation between dollar strength/risk off and dollar weakness/risk on. Is this not some evidence that the dollar is now the carry trade funding vehicle? I'm not saying that it is...certainly folks a lot smarter than I would be talking about it if it were...but, it's certainly worth considering.

So what about that reversal in The Pig overnight? Apparently, it has to do with this:

https://www.zerohedge.com/news/here-it-comes-eurozone-sources-say-several-countries-may-face-imminent-downgrade-sp

Look, this downgrade of France and perhaps some others has been whispered about all week. It's likely to happen. I wouldn't be surprised if S&P announces it late this afternoon, similar to the way they released the downgrade of the U.S. back in August, What kills me is the trading rationale today.

  • France et al will be downgraded to AA+ or even AA
  • Relatively speaking, this makes the dollar look better
  • Buy the dollar
  • Sell gold, silver, crude, stocks....

Is that not just incredibly freaking stupid? No matter that the U.S. has a debt:GDP of over 100%. No matter that O'bottom is requesting another $1.2T of debt because we burned through the last extension at the rate of $200B/month. No matter that the real news is that all major nations could/should have their debt ratings downgraded. NO!!! All that matters is that euro weakness makes the dollar look better. It's nothing but brainless, mindless, nonsensical bullshit.

I posted back on Wednesday that "the next 24-48 hours would tell the tale". That certainly seems to be true. It looked like we had ourselves a breakout yesterday at this time but TPTB thought otherwise. Gold has been consistently beaten back, showing us that The Cartel is not quite ready to let it restart its ascent. Check out this chart I posted in the comments of the last thread:

So, anyway, whaddayagonnado? Well, I know what I'm going to do. I'm going to keep watching this crap and telling you what I think. I guess it's up to you to decide if you want to keep reading it.

Here are your updated charts. As mentioned yesterday, today is an important day. I had hoped that gold would close above 1650 and silver would close above 30.20, at a minimum. Of course, there's still time for that to happen but, for now, let's just hope they stay above the lines I've drawn on these charts. If we can hang in there, there will still be hope for a breakout next week. If not, next week probably won't be any fun at all.

Lastly, crude has sold off some on the hope that Una Paloma Blanca was soaring over the Persian Gulf.

George Baker Selection - Una paloma blanca

Well, as Lee Corso would say, not so fast, my friend:

https://www.gata.org/node/10878

https://www.debka.com/article/21648/

That's all for now. Before I sign off, I'd like to pass along a special thank you to all the folks who sent along encouragement during my struggles yesterday. We will continue to run this site in a manner deemed positive for most. Can't please everyone, that's for sure. To that end, I'd like to thank again all of the mods who do an absolutely tremendous job of keeping this place civil. Without them, this site would die a nasty death.

Have a great Friday! TF

p.s. Santa visited with Eric King yesterday. You should probably give it a listen.

https://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2012/1/13_Jim_Sinclair.html

About the Author

Founder
turd [at] tfmetalsreport [dot] com ()

  94 Comments

NZ SilverSurfer
Jan 13, 2012 - 10:28am
H - original
Jan 13, 2012 - 10:32am
BASEBALL 13
Jan 13, 2012 - 10:32am

First? Second? Turd?

Enjoy the weekend!

BB13

Jan 13, 2012 - 10:34am

French Downgrade Imminent?

The action in gold reminds me of early morning, Sept 6, when gold was crushed by direct central bank intervention in the minutes before the SNB devalued the franc by 10%.

Don't be sore, buy more.

SRSrocco
Jan 13, 2012 - 10:34am
Perfidious Albion
Jan 13, 2012 - 10:35am

Food for thought

But how does one maintain integrity in this twisted world.

This article is about integrity as a theoretical and ethical concept. For other uses, see Integrity (disambiguation).

Integrity is a concept of consistency of actions, values, methods, measures, principles, expectations, and outcomes. In ethics, integrity is regarded as the honesty and truthfulness oraccuracy of one's actions. Integrity can be regarded as the opposite of hypocrisy,[1] in that it regards internal consistency as a virtue, and suggests that parties holding apparently conflicting values should account for the discrepancy or alter their beliefs

.https://en.wikipedia.org/wiki/Integrity

Value judgements strike again

A value system is a set of consistent ethic values (more specifically the personal and cultural values) and measures[clarification needed] used for the purpose of ethical or ideologicalintegrity. A well defined value system is a moral code.

https://en.wikipedia.org/wiki/Value_system

Oh oh moral codes its getting deep and meaningful

A moral code is a system of morality (for example, according to a particular philosophy, religion, culture, etc.)

https://en.wikipedia.org/wiki/Moral_code

Its tricky very tricky and I dont have the answers but Viva the mods, Viva Turdicus Viva Turdites

Gramp
Jan 13, 2012 - 10:38am

Thanks for the write up

Thanks for the write up TF!

Feels like we are post "half time" w/ the Euro debt drama... pace seems faster. but WTFDIK!

balz
Jan 13, 2012 - 10:38am

Thanks Turd for another great

Thanks Turd for another great post.

BASEBALL 13
Jan 13, 2012 - 10:41am
Jan 13, 2012 - 10:42am
Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
10/17 8:30 ET Housing Starts and Bldg Perms
10/17 8:30 ET Philly Fed MI
10/17 9:15 ET Cap Ute and Ind Prod
10/18 10:00 ET LEIII
10/18 Speeches from Goons Kaplan, George and Chlamydia

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Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
10/17 8:30 ET Housing Starts and Bldg Perms
10/17 8:30 ET Philly Fed MI
10/17 9:15 ET Cap Ute and Ind Prod
10/18 10:00 ET LEIII
10/18 Speeches from Goons Kaplan, George and Chlamydia

Key Economic Events Week of 10/7

10/8 8:30 ET Producer Price Index
10/9 10:00 ET Job Openings
10/9 10:00 ET Wholesale Inventories
10/9 2:00 ET September FOMC minutes
10/10 8:30 ET Consumer Price Index
10/11 10:00 ET Consumer Sentiment

Key Economic Events Week of 9/30

9/30 9:45 ET Chicago PMI
10/1 9:45 ET Markit Manu PMI
10/1 10:00 ET ISM Manu PMI
10/1 10:00 ET Construction Spending
10/2 China Golden Week Begins
10/2 8:15 ET ADP jobs report
10/3 9:45 ET Markit Service PMI
10/3 10:00 ET ISM Service PMI
10/3 10:00 ET Factory Orders
10/4 8:30 ET BLSBS
10/4 8:30 ET US Trade Deficit

Key Economic Events Week of 9/23

9/23 9:45 ET Markit flash PMIs
9/24 10:00 ET Consumer Confidence
9/26 8:30 ET Q2 GDP third guess
9/27 8:30 ET Durable Goods
9/27 8:30 ET Pers Inc and Cons Spend
9/27 8:30 ET Core Inflation

Key Economic Events Week of 9/16

9/17 9:15 ET Cap Ute & Ind Prod
9/18 8:30 ET Housing Starts & Bldg Perm.
9/18 2:00 ET Fedlines
9/18 2:30 ET CGP presser
9/19 8:30 ET Philly Fed
9/19 10:00 ET Existing Home Sales

Key Economic Events Week of 9/9

9/10 10:00 ET Job openings
9/11 8:30 ET PPI
9/11 10:00 ET Wholesale Inv.
9/12 8:30 ET CPI
9/13 8:30 ET Retail Sales
9/13 10:00 ET Consumer Sentiment
9/13 10:00 ET Business Inv.

Key Economic Events Week of 9/3

9/3 9:45 ET Markit Manu PMI
9/3 10:00 ET ISM Manu PMI
9/3 10:00 ET Construction Spending
9/4 8:30 ET Foreign Trade Deficit
9/5 9:45 ET Markit Svc PMI
9/5 10:00 ET ISM Svc PMI
9/5 10:00 ET Factory Orders
9/6 8:30 ET BLSBS

Key Economic Events Week of 8/26

8/26 8:30 ET Durable Goods
8/27 9:00 ET Case-Shiller Home Price Idx
8/27 10:00 ET Consumer Confidence
8/29 8:30 ET Q2 GDP 2nd guess
8/29 8:30 ET Advance Trade in Goods
8/30 8:30 ET Pers. Inc. and Cons. Spend.
8/30 8:30 ET Core Inflation
8/30 9:45 ET Chicago PMI

Key Economic Events Week of 8/19

8/21 10:00 ET Existing home sales
8/21 2:00 ET July FOMC minutes
8/22 9:45 ET Markit Manu and Svc PMIs
8/22 Jackson Holedown begins
8/23 10:00 ET Chief Goon Powell speaks

Key Economic Events Week of 8/12

8/13 8:30 ET Consumer Price Index
8/14 8:30 ET Retail Sales
8/14 8:30 ET Productivity & Labor Costs
8/14 8:30 ET Philly Fed
8/14 9:15 ET Ind Prod and Cap Ute
8/14 10:00 ET Business Inventories
8/15 8:30 ET Housing Starts & Bldg Permits

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