Friday, September 16, 2011

Euro – Dollar Update

Below is an updated weekly graphic of the euro divided by the dollar.  The euro rose substantially and continuously against the dollar post 2000 into the 2008 collapse. Since,  the euro has been a yoyo of volatility.  That yoyo has been lower lows and higher highs.  The longer term pattern points to the euro dropping 50% from its 2008 peak to around 80, which is lower than its initial launch value.  That is simply the chart interpretation.   How the future unfolds could take many forms.  The union as it currently stands is not sustainable.   Everything other than a return to self-rule (democracy) and localization (democratic economics)  is a band-aid.  

Remember, we have said for ages the dollar is putting in a long term bottom here.  And that it could rise violently and substantially at some point thus catching American politicians, multinational corporations and the Federal Reserve off guard.   That view has been an incredibly lonely position.  Even one of our favorites, Marc Faber, was barking that the euro was a legitimate currency and the dollar was toast years ago; a completely unreasoned and non-thinking statement of pure ideology and self-delusion. 

The dollar has risen to its highest level against the euro this year as shown below.  And although the histrionics of many would wish to convince you otherwise, the dollar hasn’t put in a new low against the euro in four calendar years.  And we could have anticipated all of this from one dynamic alone.  That is, globalization ended back in 2008.  The end of globalization, which we have uniquely anticipated, has many macro connotations regarding the value of the dollar.  All of them are bullish.         

Remember, volatility is a precursor to a change in trend.   Since 2008, the chart below shows incredible volatility in what was a strongly rising euro for the prior eight years. 

Der euro ist kaput and in our next post we’ll open the kimono on many of our prior posts to explain in greater detail how incredibly wrong everyone is as to why.    The remarks about the profligacy of debt-laden Greece, Portugal, Spain, etc are utter and complete neoliberal nonsense and those writing statements supporting this position are society’s useful idiots for bank mobsters and the wildly corrupt status quo. 


posted by TimingLogic at 10:40 AM

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