Thursday, November 26, 2009
DOLLAR COLLAPSE/ BEARISH FOR THE MARKET????
I don't know at all that it will start to decline real fast from here..just thinking it could happen. If it starts to crater that will cause instability and fear. Markets can handle a slow decline and acutally like it...but fast gets people real concerned. Gold will soar even more as a safe haven in that event and world banks will try even harder and faster to diversify their foreign reserves which will mean more of a move away from the dollar into stronger foreign currencies and gold which may start to feed on itself. Some of the foreign central banks that have propped up the dollar seem to be getting cold feet. Instead of buying just dollars for their foreign-exchange reserves, they're diversifying into other currencies. The countries that reveal the composition of their reserve holdings put 63% of their new reserves into euros and yen according to an analysis by Barclays Capital (BCS). "Their incentive is to try to do stealth diversification". If we get a crash now they may be thinking get me out of here at any price. A dollar crash will further hurt us and other countries for many resons...hurts foreign economies..could cause trade wars..etc...A much lower dollar hurts our banks etc. My thinking is anytime you create a situation of fear and surprise that is not good for the markets in general. We will see if it happens and if I am right. One thing that is happening also is that short term rates have plummeted even more and that is hard to believe..but that is hurting the dollar...fear is still there in the market imo. What is your take?
Subscribe to:
Post Comments (Atom)

No comments:
Post a Comment