AI
Wednesday, March 23, 2005 4:37:59 PM
Nice, dollar closed at 84.00 even, just off its high at 84.10. I think we are going to see one more strong green day to break the downtrend line tomorrow. There is only one more downtrend line to break and that is from the May 14th and August 30th tops. When those go its and official break of the downtrend in the Dollar. This is what the markets have been dreading. Their rally off the 2002 bottom was due to a devaluation of the dollar when the Fed ran the printing presses day and night while tanking their Fed Rate to 1 percent.
This topping of the markets that lasted over the January 2004 to January 2005 only gave big money time to sell off the markets, dump shares, and position themselves for a massive appreciation of the US Dollar. Everyone holding the markets now are going to get squeezed out. Even if we do attempt to recover there is no election rally, no Iraqi vote, no political means to float the equity markets up. The Fed only has one course to follow right now and that is to keep running the Fed Rate up. Force people into cash and hold dollars in the banks and force equities and commodities to such a deflated level that the corporations that are holding large cash hordes overseas to repatriate those dollars and use them to buy up commodities.
Wait till joe investor feels the pain of $2.50 a gallon gas and 6.5% ARM 30y Mortgage. You know the ones Greenspan was telling everyone to get a couple years ago. What do you think will happen when everyone starts running for the lenders to refinance those ARMs? All that equity built up over hte last 2-3 years is going to get wiped out with closing costs, and fees my the lenders. Those very same lenders will be selling 6 to 7.5% rate 30 year fixed in no time flat. Wait till the measured pace is removed and we go up 50 basis points and see the ARM holders run like lemmings. Yes the housing market will be a bust, but don't count the mortgage lenders out yet. They still have a lot of work to do in the next couple years.
Afternoon all.
This topping of the markets that lasted over the January 2004 to January 2005 only gave big money time to sell off the markets, dump shares, and position themselves for a massive appreciation of the US Dollar. Everyone holding the markets now are going to get squeezed out. Even if we do attempt to recover there is no election rally, no Iraqi vote, no political means to float the equity markets up. The Fed only has one course to follow right now and that is to keep running the Fed Rate up. Force people into cash and hold dollars in the banks and force equities and commodities to such a deflated level that the corporations that are holding large cash hordes overseas to repatriate those dollars and use them to buy up commodities.
Wait till joe investor feels the pain of $2.50 a gallon gas and 6.5% ARM 30y Mortgage. You know the ones Greenspan was telling everyone to get a couple years ago. What do you think will happen when everyone starts running for the lenders to refinance those ARMs? All that equity built up over hte last 2-3 years is going to get wiped out with closing costs, and fees my the lenders. Those very same lenders will be selling 6 to 7.5% rate 30 year fixed in no time flat. Wait till the measured pace is removed and we go up 50 basis points and see the ARM holders run like lemmings. Yes the housing market will be a bust, but don't count the mortgage lenders out yet. They still have a lot of work to do in the next couple years.
Afternoon all.
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