Thanks for this article. I think teh auther has missed two largest potential bubbles, which are US Dollar and US Treasuries.
He said: The trick, of course, is spotting them. By definition, most people don't spot a bubble before they form and burst.
I hope he will revise his list really soon.
The following article told us the detail of what has been going on in the US financial system. The worst has yet to come. Wish we all survive this disaster. Take care.
This site is probably the best for studying gold and currency directions: http://jsmineset.com
The Non Safe Haven US Dollar Posted: Oct 04 2009 By: Jim Sinclair Post Edited: October 4, 2009 at 11:46 pm
Dear CIGAs,
The US dollar is NOT a safe haven. It is actually one of the most dangerous places to be.
Let’s stop and think about this scenario:
There are mechanics to all things including consideration of the US dollar as a safe haven. Right now that consideration is a knee jerk reaction of glib provincial talking heads who have not considered the process inherent in that definition.
1. US Equities are sold and risk positions closed by US entities. US investors, traders and rank speculators put their funds in short term US Treasuries as they close their positions. What is the net effect on the US dollar? Absolutely nothing at all as no dollars are being sold into the international dollar market. No dollars are being purchased in the international dollar market either. Short rates will move lower on that demand. Nothing in that equation exists to bolster the US dollar.
2. International investors including US traders (in non dollar items) and rank speculators close US and international positions, putting their funds into dollar US Treasury instruments. In that case dollar instruments would be purchased. On balance dollars would be acquired with an upward influence on the US dollar.
However things have changed in the last year:
1. The Carry Trade has targeted the US dollar as the Carry Currency of choice because of the historic low Libor rate and the recognition that, at all costs, increasing rates on the dollar will be leaned against. US rates MUST STAY LOW because of the signs indicating a failure of the US economic recovery. The Carry Trade is no joke. the Carry Trade for the currency of choice is a serious value case of Swine Flu and is very long term.
2. The IMF, the World Bank, the United Nations, China and Russia, as well as many others have all panned the dollar. What makes you think that US Treasury instruments are the only short term treasury instrument investors can buy? Thoughts like that and statements of dollar safe havens from any source, no matter who they are, reflect a PROVINCIALISM all Americans have a hard time with or an unwillingness to think the process out.
Friday was quite interesting as the dollar safe haven was not there on the employment figures.
Believing in the US dollar as a safe haven now could well be a sucker ’s wager.
The demise of the dollar In a graphic illustration of the new world order, Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading By Robert Fisk
Tuesday, 6 October 2009 In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar. Secret meetings have already been held by finance ministers and central governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars. The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years.
5 則留言:
Ming said 擠一擠就有bubble. ha
Hi Yen,
Thanks for this article. I think teh auther has missed two largest potential bubbles, which are US Dollar and US Treasuries.
He said: The trick, of course, is spotting them. By definition, most people don't spot a bubble before they form and burst.
I hope he will revise his list really soon.
The following article told us the detail of what has been going on in the US financial system. The worst has yet to come. Wish we all survive this disaster. Take care.
Recession Is Over; Depression Has Just Begun
http://seekingalpha.com/article/164452-recession-is-over-depression-has-just-begun
This site is probably the best for studying gold and currency directions: http://jsmineset.com
The Non Safe Haven US Dollar
Posted: Oct 04 2009 By: Jim Sinclair Post Edited: October 4, 2009 at 11:46 pm
Dear CIGAs,
The US dollar is NOT a safe haven. It is actually one of the most dangerous places to be.
Let’s stop and think about this scenario:
There are mechanics to all things including consideration of the US dollar as a safe haven. Right now that consideration is a knee jerk reaction of glib provincial talking heads who have not considered the process inherent in that definition.
1. US Equities are sold and risk positions closed by US entities. US investors, traders and rank speculators put their funds in short term US Treasuries as they close their positions. What is the net effect on the US dollar? Absolutely nothing at all as no dollars are being sold into the international dollar market. No dollars are being purchased in the international dollar market either. Short rates will move lower on that demand. Nothing in that equation exists to bolster the US dollar.
2. International investors including US traders (in non dollar items) and rank speculators close US and international positions, putting their funds into dollar US Treasury instruments. In that case dollar instruments would be purchased. On balance dollars would be acquired with an upward influence on the US dollar.
However things have changed in the last year:
1. The Carry Trade has targeted the US dollar as the Carry Currency of choice because of the historic low Libor rate and the recognition that, at all costs, increasing rates on the dollar will be leaned against. US rates MUST STAY LOW because of the signs indicating a failure of the US economic recovery. The Carry Trade is no joke. the Carry Trade for the currency of choice is a serious value case of Swine Flu and is very long term.
2. The IMF, the World Bank, the United Nations, China and Russia, as well as many others have all panned the dollar. What makes you think that US Treasury instruments are the only short term treasury instrument investors can buy? Thoughts like that and statements of dollar safe havens from any source, no matter who they are, reflect a PROVINCIALISM all Americans have a hard time with or an unwillingness to think the process out.
Friday was quite interesting as the dollar safe haven was not there on the employment figures.
Believing in the US dollar as a safe haven now could well be a sucker ’s wager.
CNBC video titled "The Fate Of The Dollar"
http://www.cnbc.com/id/15840232?video=1282576832&play=1
This is a huge news. You got to read the whole article:
http://www.independent.co.uk/news/business/news/the-demise-of-the-dollar-1798175.html
The demise of the dollar
In a graphic illustration of the new world order, Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading
By Robert Fisk
Tuesday, 6 October 2009
In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.
Secret meetings have already been held by finance ministers and central governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.
The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years.
...more
Update:
Gulf States Deny Secret Plan to Dump Dollar
http://www.myfoxny.com/dpp/news/international/Gulf_Arab_States_Deny_Secret_Plan_to_Dump_Dollar_44204009
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