I can not fully rationalize why I see this coming...certainly there is no evidence of a strengthening US economy on the surface. We are a bit of the red-hed stepchild in today's world. I am currently holding large positions (at least large to me) which are bullish the USD bearish Gold. I am primarily a currency trader although I do dabble in bonds time to time.
I believe we are on the cusp of a change in the long term secular down trend of the USD. I see excellent value in the dollar against CAD JPY GBP. I know the road will not be easy but there is something out there that is going to cause it to happen. The moves are apparent (to me) in long term price distribution studies. I don't think there are many out there that would give the dollar much of a chance but I disagree. I am projecting the USDollar Index to move to the 106 area then onto 123 in the not so distance future. Ultimately I think we will see levels unheard of since times long ago. Maybe 150 before your estate planning kicks in. We will return to parity in the EURUSD then somewhere down around 87 or so will happen. Crazy huh? Well I guess today everyone would call me an idiot for saying these things I certainly can not blame anyone.
Now I am certainly not an economist. Although I did minor in economics in college for some reason. Let's throw all the fancy GDP talk percentage this percentages that off the table. Mainly because I have no clue what most of this means to me as a trader. So I ask myself what in the world would cause such dominance the US economy?
Number 1 2 China India have a tough row to hoe. Anyone who thinks they will magically emerge victorious without an lot of intrinsic issues is just plain awash in Chinese fortune cookies curry sauce as far as I am concerned. I'll keep my dollars at home thank you.
Number 3 4 the Europeans the Japanese. Talk about secular downtrends. I do not need to say anymore. Boy that data out of these two hotspots is lighting it up ain't it. Jeezy peasy people have such blinders on. 2 hour lunches all.
Numbers 5 to Infinity - The much hyped world threat of terrorism mid-East this that will go away. Not easily. But it will end. Saddam started the ball rolling today. Like all games it will not be any fun anymore after awhile. People are all good inside at some point they begin to realize it.
So numbers 1-5 on to infinity are not in the equation.
So here's what I figure will play at least some roll in the dramatic shift back to empirical dollar power. Yes silly there is a massive revolution that really everyone has forgotten about. Remember when technology was all the rage. What happened? Dang bubbles got ahead of themselves a little everyone is just plain scared to say it.
You know I remember working in corporate America during the golden technology age. In fact I worked for a Fortune 50 company that was ( still is) one of the biggest technology companies in the world. Now you know what I noticed.....we had all this great technology incredible stuff in the R&D department we were implementing this implementing that restructuring this outsourcing that...the problem was that we got so far ahead of ourselves that we never helped the bottom line very much. In fact I think it cost more to develop implement than the net return on the technology. We hired a small country of people things were rolling. Then the dreaded bubble burst! Pow. You know the rest of that story.
Now a few years passed at the "M" company. Wow. Pressure was off we began to really put our technology to work. Systems worked better we were all more productive guess what we did it with fewer fewer worker bees (this is an extremely important point). For me there was no comparison to the technology bubble years. We were now finally putting the technology to work the results were incredible.
So what's the point? Everyone is missing it. The "Technology Revolution" I mean. Do you realize what's happening out there? Jobs report what a bunch of rubbish. When will folks come to grips with what is happening in the greatest country on Earth. Talk about productivity. I left corporate America to realize my dream as a trader. To the best of my knowledge my company did not replace me. No increase in hiring at this company but they are soaring past the productivity baseline level that was there when I left. Now I have a trading office built behind my house I work alone for the most part have practically no expenses I pay 10 times more taxes on my productivity today than I did when I got my paycheck the "M" company. I could go on on but this has to be it. Hmmm? Have you taken a look at tax revenues lately. I think they are increasing a little here there. How can this be? We are crumbling how can we taking in more tax revenue. Oh yeah the experts say that this can not go on. I forgot they said that.
It's kind of like the steam engine cotton gin thing.Truth is I believe we are really just getting our hs on the technology that we have been able to develop. At the "M" company we had new products services that were so advanced we could not bring them to market. They were too unbelievable let alone affordable or profitable.
Anyway keep sending money to the Chinese Indians Europeans the Japanese because they will one day be at this same place in history that we are now. The neat thing is that this time in your life as an investor American will be written about in the history e-books that your children grchildren study. Maybe you will be the wealthy philanthropist that they study in Chapter 1.
Should be a fun ride. Gotta go need to sell some more Gold buy some more dollars etc. etc.
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