Selling USD and YEN is a no brainer.

Forget about temp positive data for the US, it won't last, just sell the Rally and yo uwill be on your way to your early retirement.
I am talking seriously, I don't usually give my comments but I think this website has lots of knowledgable traders so I decided to give my onw 2 cent inputs...

I think I'd need more than 2 cents to retire on.

if you did ass I said, you aalready got your two cents)

Woops.

To be short on USD looks promising. Sooner or later.

Since I can not ask you to donate your 2 cents on my website (ff would ban me), just send me msg when fe. eurusd has made its bottom. That would be great.

Thanks in advance, haha

I hope you didn't invest much of your retirement savings in the trade.

Other countries are having to expand their monetary base even more than the USA - US banks are farther away from the morgue than the Euro banks to be certain. Under these conditions, the Euro has no reason to go up: supply of both USD and dollars is skyrocketing, but there are more new Euros created.

Against commodities, you probably have a chance....

You might want to read this and rethink about this "worthy" dollar:

From the day of its founding in 1913, the Fed's assets - the foundation capital of the U.S. banking system - grew, reaching $1 trillion on the 24th of September, 2008. But then, something extraordinary happened. Something breathtaking. And for a classical economist - something incredibly reckless. In the next six weeks, the Fed added another trillion. And the head of the Dallas Branch of the Fed said that he expected to add another trillion before the end of the year.

How does the Fed get these "assets?" Simple. It buys them. Where does it get the money to buy them? Simple again: it creates it. It makes it up. It conjures it out of nothing.

"If it comes from nothing," you might wonder, "what could it really be worth?" But we're not going to answer that question. We don't have time. Besides, it takes us in such a deep metaphysical swamp, we're afraid we may never slosh our way out…or at least not get out in time for lunch. Instead, we're going to answer this question:

"If it was that easy, how come the Fed didn't do it before?"

The answer to that is simple: because when the Fed inflates the money supply it risks inflating consumer prices. People don't like that. They like it when asset prices go up. But not when gasoline and milk increase.

But now, no one is worried about consumer prices. In fact, the Fed is worried about deflation…about falling prices. Bernanke knows what happens when consumer prices begin to fall. Consumers stop spending - knowing that they will be able to get a better deal in the future. That further depresses the economy…and pretty soon it's the '90s again and you're back in Tokyo. So the Fed has begun a huge program of monetary inflation, intended to offset Mr. Market's price-cutting.

And now another question: Isn't there some risk that the Fed will overdo it?

Oh, dear reader…that's a puffball of a pitch. If we can't hit that, you can take our laptop away…you can break our sword…and send us back to the dugout.

Remember what happened in the slump of the early 2000s? Alan Greenspan panicked…cut rates to 1%…and left them there for more than a year. He gave the market the wrong medicine at the wrong time…and then delivered such a horse-sized dose, it set off the biggest bubble in mankind's whole bubbly history.

Now, it's a different kind of slump…a credit slump. And once again, the Fed is on the scene, like a quack doctor at the side of a heart-attack victim. This time, he's giving stronger medicine…not just a 1% lending rate, but actual monetary inflation. Trillions of dollars worth of it.

For the moment, Mr. Market is taking away dollars faster than the Bernanke Fed is replacing them. That could continue…for a few months…or even for several years. But it won't continue forever.

And here, we affirm our unshakeable faith in the people who lead us. They are trying to cause inflation. Eventually, they will get the hang of it. They may shoot for 2% per year; but they are sure to overshoot. Money printers always do.

Source: http://www.dailyreckoning.com/Issues/2008/DR112008.html

I didn't say anything about a "worthy dollar". The writer is generally correct, but far too US centric -- as are you.

Two things which are not mentioned: other central banks have created a similar or greater currency relative to their countries' productiveness. In the EU's case, their banks are in far worse shape, and their economy was far more focused on increasing leverage.

The second thing to mention is the distinction between the different measures of buying power -- money supply -- and the dynamics between then. Central banks around the world have been increasing their stock of M1 (by directly adding money to the capital base of banks), but the delevering process has taken much more buying power out of the system. Eventually, if this all works, the subsequent inflation will by undeniable.

This works because banks can leverage and fractional reserve lend -- and actually *create money* when one bank bank fractional reserve lends to another. Most of the money chasing assets is borrowed this way. So - the capital base of banks are increasing, but they're not lending and expanding their leverage. This means that the total number of dollars chasing assets is shrinking - and hence deflation.

The premise of the article is that reflation will cause problems by creating bubbles is correct, and he is, like I am, predicting asset bubbles. It doesn't address the relative currency valuations, and you've missed a point here (like you did before): everyone else is doing it because it's just as bad or worse in most other countries.

sell usd?




see Peter Schiff nail the current debacle on the head.
He did it in 2006 while talking heads laughed in his face.
A real gem of a video.

But the EU had a surplus not a huge deficit. And that is a very important difference. Actually I wouldn't say that the EU banks are in a far worse shape, that's simply not true.

You've been caught guessing. At the height of this crisis, bank leverage in the EU was nearly twice that of American banks, and had more absolute debt.

I've done the math myself, and it agrees with what this fellow pointed out in late September. Of course, the picture is even worse now, but at least there are 5.7T in commitments to buoy them now .. EU countries have just begun to nationalise their problem banks entirely.

Anyway, what do you mean the EU "had a surplus"? In what? Current accounts? Trade balance? Federal government budgets? Personal savings? Investment inflows? Gorgeous exchange students?

If the FED is creating more money to make the economy grows up and to increase inflation the overall panorama for USD is rising? Investors will bring the money back to USD and we can expect bullish behavior. If they forecast triply assets for the end of the years (in FED) we’d say going long.

When you create more of something relative to other things, other things will become more expensive in somethings.