Saturday, April 19, 2008

LOW for the dollar


I think we are close to a long term low for the dollar.
- Extremely negative/bearish attitude towards the dollar, most people think the dollar will be worth "sh*t". Markets work in the opposite direction of what mainstream "main street" thinks.
- A lot of negativity is already built in the current 1.58 quote against the euro.
- 275 more days and the worst president ever has to walk away. He can always change the law and ask for a 3rd term, there is a possibility that 51% of the Americans would support him...
- The market will discount the change in policy of the Obama administration before he is elected.
- The dollar had a severe decline because of the mortgage mess. There is no way that the Euro and the Pound Sterling will escape their local mess. Especially Great Britain is in a huge mess, $400 000 for the median home ... No one can afford that when they tax you 50%. The government has aided Northern Rock and will have to save more banks.
- Because of the European (Spain, Belgium, France) mortgage mess, the ECB will have to lower interest rates. Idem dito for the Central bank of England. The dollar will become more attractive on a relative basis.

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