2011, we have seen several arab countries fall, and unrest increase in oil producers such as Iran and Saudi Arabia. Japan has been severely injured, calling into question their future GDP as a percent of global GDP, changing the economic landscape.
Japan has significant US Treasury holdings, and I am concerned as part of the rebuild in the years to come, they will accelerate their US Bond selling.
Today, the USD is at a crossroads, if it breaks down further, there is no chart resistance (historical level of valuation) except at the all time low set a couple years back at 74.
Once we break through 74, in my mind, the USD is NOT a good storage of wealth. I do have hope that the USD will break 74 and make a huge comeback. But as a friend once told me, best not put yourself in an investment position "hoping for a comeback".
Recently all commodity prices have come down. Gold did, but just barely, it is already firming up chart wise.
Here is the chart of USD valuation against a basket of other fiat currencies.
Notice, a breakdown from here will likely accelerate down to 74 quite quickly (chart wise). If we reach there, thats when I'll be panicking about USD, and holding tight my resource positions.
From WebSufinMurfs FinancialBlog2 |
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