End to Dollar Carry Trade Isn’t Here Yet
CIGA Eric
The disappointing December payroll numbers threw cold water on expectations for a near-term extension of the dollar’s rally.
The report had been billed as a key marker for the greenback: a positive reading would have cemented the dollar’s recent gains, limiting its role as cheap funding currency for bets in riskier assets by raising expectations of U.S. rate hikes.
Myopia appears to be the price staticism over capitalism. We wait with bated breath the release of government reports with a proven history of bias and inconsistency. If that’s not bad enough, a barrage of spin suggests that the deviation between the headline numbers and consensus expectations defines and drives the “economy.”
The long-term cycles, while hardly straight-line trends, exist not because of staticism but rather capitalism.
CRBSPOT to Gold Ratio:
TA Spotlight – U.S. dollar
CIGA Eric
Shrinking volume on the retest of the gap and swing high resistance suggests that upside force is weakening. This is confirmed by a new relative low in the REV. Strong hands build their positions while waiting for time.
Statism vs Capitalism
CIGA Eric
I have long suggested that we have not seen the end of stimulus since 2003 tax rebate. Though, don’t expect it to be called “stimulus” going forward. To propose a second, technically a third stimulus, would imply that the most recent $780B+ stimulus has failed to right the economic ship.
“Targeted” programs looks to be the acceptable spin in 2010.
