Don’t fight the trend August 18, 2009
Posted by Warren in Central Bank, Metals, Strategy.trackback
Markets were rattled yesterday following a steep sell-off in Asia. Risk trades corrected heavily (silver was down more than 5%) and dollar/treas rallied hard.
OK, so what?
Nothing has changed fundamentally. What are such fundamentals that I speak of? Simply put, we are currently going through a cyclical recovery on the back of unprecedented debt monetization and government spending, with the ultimate hope that consumer spending will pick up the demand side. My core assumption is that the US government is committed to devaluation of the dollar (though not as vocal about such intention as the UK government for example) for the long term.
USD 1-year: don’t fight the trend
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