Friday

Currency Crisis 2009

Post a Comment February 27, 2009 – 2:51 pm |   | Permalink |  Print This Post |

Uncle Jim has warned of an impending currency crisis in 2009. He has his fingers on anything against the USD, GBP, and Euro, but has given very little specifics. Bloomberg’s breaking news reports “A gauge tracking the greenback against the currencies of six major U.S. trading partners reached the highest level since April 2006″ as investors seek refuge in the security of the greenback. Why would anyone seek refuge buying a currency of a bankrupt government bailing out bankrupt companies? The printing press is working on overtime as trillions of greenback will be flooding the market, diluting any value to it. It does not make any sense fundamentally - and deserves a long AUD/USD mini at 0.637. (We also have an order to short the Euro/AUD at 2.0, which we are getting impatient and may pull the trigger). We also see the Euro/AUD as a great opportunity to make some serious money this year, being close to its unprecedented high.

The inflationist have been fairly quiet throughout the week but our greed alarms are going off as fear seizes the markets. Our target for Dow at 6850 may or may not occur tonight. Ideally this should occur next week. We see Dow recovering back to 7200 s and then suffer further falls over the next few trading days to hit our target. We received an email today from a reader asking why 6850 (and not lower)? It is purely a guess based on previous morphology and based on the fact that our other indicators (gold, silver, oil, currency) are showing signs of a turnaround, thus the days of further falls are limited for the time being.

At the time of writing, the Dow is still at 7058 and is making a serious attempt at breaking 7000. Not out of the woods yet, but if you have absolutely no position, now would be a good time to have a small one.