Thread: How Many Lives Does the Dollar Have Left?

How Many Lives Does the Dollar Have Left?

Thursday, July 10, 2008 4:15 PM

By: Sean Hyman

This Federal Reserve never ceases to amaze me. What they should do and what they do are two completely different things.

Year-over-year inflation is at a high point like we’ve not seen in years, coming in at 4.2 percent, and the Fed sees the need to do nothing. It’s like they’re just praying it will come down on its own.

The lack of activity at the latest Fed meeting — it stayed at 2 percent — killed the greenback. It will continue to do so for long thereafter.

The Fed also gave no clear indications of future direction, which the market hates. It’s better for currency traders to go on to greener pastures where there is more clear insight into a central bank’s direction.

So this really helped the EUR/USD, since European Central Bank chief Jean-Claude Trichet has made no bones about a hike. It came on July 3, a quarter-point hike.

Couple that with the Fed’s lack of aggression on fighting inflation and you have a good case for the EUR/USD heading higher for now, and that’s exactly what traders did. They’re buying this pair up like there’s no tomorrow.

They sold off the U.S. dollar and ran to other countries where inflation is also high but where they take inflation-fighting more seriously.

Our Fed either needs to shut up with their “2 percent to 3 percent comfort zone talkâ€

The Srongest Currency ever in the World run in the ground by Elites crooks with a agenda . Break America . No body is in jail ? Why ?