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Permalink Reply by princess Todd on February 27, 2009 at 1:08pm

Keep an eye out for the Kiwi and Aussie as the tides start turning on the Dollar

Monday saw US stocks fall the their lowest level in nearly 11 years after early indications showed that the markets would respond well to the US’s purchase of close to 40% of Citigroup. Monday also saw the Dollar losing steam against many currencies as the brokers trading the USD decided to take their chances somewhere else. President Obama has the economic world puzzled, on one hand he is spending like there is no tomorrow (by telling his citizens that if he does not spend like this there will be no tomorrow) and on the other hand he is promising to cut the deficit in half within two years.

This is one reason I always stress to people to not only listen to what someone is saying, but hear it too – President Obama’s actual words when announcing this yesterday was “I will work to reduce the deficit I inherited by half…” – the key part of that sentence is “I inherited”. While the US runs up a three Trillion Dollar debt in Obama’s first month, he is talking about lowering the debt he came into office with, which was 1 Trillion Dollars. So if you put the numbers together, he is looking to shave 500 Billion off of a 4 Trillion Dollar debt – which leaves 3.5 Trillion Dollars left owed to whoever buys up the bonds and treasury bills. 3.5 Trillion is larger than the entire fiscal budget for the whole of South America to put this number into perspective. It is enormous and it is this ultimate number that has many people scared.

The US Secretary of State was in China last week practically begging China to continue buying their debt – ironic that the capitalistic US is asking the communist China to basically fund all the activity that the communists have been preaching against since Lennon. I think we can begin to watch the Forex Online traders and investors’ shying away from the Greenback in the near future – as big spending and higher taxes to offset the big spending does not work well and from all indications, this is what Obama will be doing.

As for Europe, they are in for a rough ride. The Brokers trading the Euro woke up yesterday to news that Fitch (another feared rating company) is warning that Austria’s ‘AAA’ rating is in jeopardy – now even I know that this is not good – Austria was typically a well-to-do nation. Also, there is speculation that some of Spain’s largest banks might be insolvent – and the financial misery in Europe is worse than a Norwegian Winter. Forex Online traders were not too happy that the EU leaders met in Germany to talk about a game plan for the April G20 meeting – and not the pending doom that is facing Europe or a possible solution.

I still believe there is money to made down under – keep an eye out for the Kiwi and Aussie as the tides start turning on the Dollar.

Permalink Reply by princess Todd on March 9, 2009 at 1:13pm

Daily FX Updates: Dollar Strong and England in Bad Phase

As the stock market falls, the dollar seems to be getting stronger. This fact defies logic as the US is spending money now that they don’t even have – it has not been printed yet – no one has even earned it yet. The printing presses are on 24/7 at the US treasury as they pump trillions of dollars into the economy – money that is not backed by anything yet – money that is not secured by some debt instrument like a bond or T-bill – money that does not yet exist. And with all this, common sense would say that the Dollar’s value is being diluted – but the dollar is strong, go figure. Forex Brokers and Online Forex traders are helping pump the dollar up for several reasons.

Part of this reason for this is that the rest of the world is in far worse shape and is seen as not doing enough to stave off the inevitable collapse of many businesses such as banks and investment companies – let alone auto factories, chicken coops or even farms for that matter. Japan, historically the US’s counterpart in “safe-haven” status is spiraling out of control. Several months back they tried to stem the Yen’s growth in order to keep their exports from suffering – now the Yen is in a tailspin falling flat.

The EU has the PIGS problem (Portugal, Italy, Greece and Spain) which is challenging the very existence of the EU’s “no bailout” policy. Some say that if the PIGS do not receive cash soon, like today (March 1), they will be as good as Ireland, or worse, Iceland. Germany is in trouble and the riots have already begun in their factories as Unionists who thrived under capitalism are now not interested in sharing the pain that sometimes comes with Free market societies.

And good old England – well, good old England is not as good as the old one was. Their banks are being nationalized, their stock markets are in flux, their citizenry is protesting in the street over everything – and they don’t have the colonies anymore to supplement the loss of production in their own country anymore. This is how it all began in the first place – colonialism that is.

The “depression” in the late 1800’s forced the big countries, like England and France to explore other nations (by explore I mean conquer) and colonize them to extract their resources and help bring about the end of the bad economic times. Perhaps some country will try this method again if things get too bad – if it gets to that you know the world will never be the same again.

Anyway, this is why the Dollar is strong – because anything else out there is not – and Forex brokers and traders know this. I still think there is money to be made in the Kiwi and Aussie. They have a limited downside and their yields are higher as a result of their low prices. So for now, call me Mate – and watch the market this week, it’s going to a bumpy one for the Euro as the PIGS come out to feed and if the EU won’t give them the grain then we could see a total collapse.