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Pay Extra Close Attention to the Dollar

Posted on November 23, 2009 at 16:08 in Forex, US Economy, World Economy by Francesc

Pay Extra Close Attention to the Dollar
By Graham Summers
Seeking Alpha
As I’ve been pounding the table for the last several months, the markets have been operating based on an “inflation” trade mentality. By this, I mean that we’re in a “Dollar down/ everything else up” environment.
This is to be expected. Fed Chairman Ben Bernanke has been doing everything he can to re-inflate the markets, hoping he can counteract the deflationary impact of the Housing Crash/Credit Bubble bursting.
To do this, he’s made the Dollar unattractive on a yield basis, cutting interest rates to between 0% and 0.25% (effectively making the Dollar have no yield). He’s also made the Dollar unattractive on a momentum basis by printing $900+ billion, expanding the Fed’s balance sheet from $800 billion to $2.2 trillion, and other anti-Dollar measures.
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Tags: Dollar, USD

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