LOOMING DOLLAR CRISIS

[Guest]

imported post

teknobucks wrote:

Greenspan is trying to prevent a collapse of the dollar, which has been declining for 2 years. So far he has managed to minimize the downward spiral.

The only reason you're not seeing big inflation is because China has frozen its exchange rate, and to a lesser extent Japan. You don't need to be a genius to realize what a falling dollar and an increasing trade deficit means in terms of inflation.

Long term (1-3 years) the I fund willoutperform the s and c.

Tekno

ps: Over the last year I've loaded up on the I fund every time I hear the dollar is growing stronger and every time it has paid off!

You're saying a strong dollar is good for the I fund? I keep seeing that a "weak" dollar is good for the I fund. You guys are really confusing me.

 

[Mike]

imported post

tsptorture wrote:

teknobucks wrote:

Greenspan is trying to prevent a collapse of the dollar, which has been declining for 2 years. So far he has managed to minimize the downward spiral.

The only reason you're not seeing big inflation is because China has frozen its exchange rate, and to a lesser extent Japan. You don't need to be a genius to realize what a falling dollar and an increasing trade deficit means in terms of inflation.

Long term (1-3 years) the I fund willoutperform the s and c.

Tekno

ps: Over the last year I've loaded up on the I fund every time I hear the dollar is growing stronger and every time it has paid off!

You're saying a strong dollar is good for the I fund? I keep seeing that a "weak" dollar is good for the I fund. You guys are really confusing me.

No, he's saying that every time he hears about a stronger dollar, he buys the I. Dollar strength has only been temporary in the past year - it tends to hit for a few days, which means the I fund takes a hit. That is the time you buy into the I fund, since its price will be relatively low. Eventually, the dollar resumes its falling trend, and the I fund goes back up.

Regarding the EU, I don't see any evidence of it becoming the next economic superpower. European growth rates this year have not been good - only fractions of a percent each quarter for an annual rate of ~2%. That is 1/2 the American GDP growth rate. Yes, their currency is strong right now, but that isn't very much related to economic strength and has more to do with things such as trade deficits, interest rates, deficits, and national debt. We import more than we export, our interest rates remain very low by historical standards, our deficits are awful, and our national debt is very large. Our economy is going pretty well, and it is outperforming most in the world right now. However, that's not enough to offset the other factors as they relate to the dollar.

 

[teknobucks]

imported post

http://fergusonreport.myonlinepublication.com/article.asp?pop_id=161&article_id=307

 

[c2isr]

imported post

Currently 40-c, 40-s, 20-i. Many think c will break out on top of s this year; I am on the fence. Your thoughts ?

 

[cowboy]

imported post

Thanks for the update on your Island Tecknobucks! I guess I am one of those people that will need to live on my TSP funds. I am not afraid of going 100% in my funds. I also have about 17 years of slavery before I can think of retiring. Sounds like your Island is nice. If it makes you feel better SD is going to be very cold in the next coming days and the Sioux will need to put on a heavier loin cloth.

 

[Rolo]

imported post

social security

BAHAHAHAHAHAHAAAAAAAAAAAAAAAAAAAAAahahahahahahahaaaaaa... aaaaaaoooooooh that's funny stuff

heh, sorry, haven't been around much. good thread, though.



Soooo...then...the location forthe first TSPCON settled: teknobuck's place!

(weather pending)

 

[Skip]

imported post

The dollar is rising "short term" I hope as I went 40% I fund Thursday...
Trying to short the dollar.... lost a nickle

lost a little Friday also.... Even as the I fund gaineda little....
If Tues the I fund is down Im going back 100G and wait the seesaw out..

Ideals ?

Skip

 

[tsptalk]

imported post

Skip wrote:

The dollar is rising "short term" I hope as I went 40% I fund Thursday...
Trying to short the dollar.... lost a nickle

lost a little Friday also.... Even as the I fund gaineda little....
If Tues the I fund is down Im going back 100G and wait the seesaw out..

Ideals ?

I see the dollar is trying to bottom but that doesn't mean it won't test the lows again. Short term - coin toss. Longer term- up.

Just my opinion based on the charts. Fundemantalists seem to disagree.

 

[teknobucks]

imported post

cowboy wrote:

Thanks for the update on your Island Tecknobucks! I guess I am one of those people that will need to live on my TSP funds. I am not afraid of going 100% in my funds. I also have about 17 years of slavery before I can think of retiring. Sounds like your Island is nice. If it makes you feel better SD is going to be very cold in the next coming days and the Sioux will need to put on a heavier loin cloth.

http://www.wunderground.com/cgi-bin/findweather/getForecast?query=32034

Cowboy did you send that wx. down here???LOL

That 17 years will fly by.....seems like yesterday when I started out with the Govt.

(27 years total now)

 

[coolhand]

imported post

Skip wrote:

The dollar is rising "short term" I hope as I went 40% I fund Thursday...
Trying to short the dollar.... lost a nickle

lost a little Friday also.... Even as the I fund gaineda little....
If Tues the I fund is down Im going back 100G and wait the seesaw out..

Ideals ?

Skip

The market is still not sure what is going to happen in 2005. Domestic equities got a boost Friday when the PPI was reported, but don't let that number fool you. Oil was the reason for the apparent drop. Oil prices were lower in December. When you remove energy and food from the PPI it actually rose .1% in December.

http://caps.blogspot.com/

This month oil has surged once again and the cold weather is upon us.

There is also talk of interest rate hikes being increased by more than thepreviously expected .25%. If the Fed does that (2 Feb)we may be in for more market volatility and a continued down trend.

So, if oil stays in the $50/bbl range this winter (or worse) and interest rates march higher, the US consumer may finally start to curtail spending. Generally, the business environment already anticipates lower earnings this year as it is. This could make it even lower.

The increased trade deficit last week didn't seem to bother the market for too long. It's obvious that our weak dollar is not helping in this regard. That's why I initially thought the "I" fund may be the place to be. But when the PPI was released it offset the trade deficit as our dollar gained strength by weeks end.

I suspect that the CPI being released next week may also appear to be good news, but for the same reason as the PPI.Could be a good short term play in the C or S fund. I think the "I" fund may be moving sideways for the short term anyway.

There are nopredictions here. Onlythings to consider.

 

[namor]

imported post

Skip:

I think you are 40%in the money fund right now.

If the I fund holds gains tomorrow, you should see a two day gain at COB Tuesday. It might not be a bad idea to move into a different fund after that, so the wiggle doesn't catch you.

The G is safe, but earnings are out this week. Could be aheckuva week.

Good luck in your investments.

 

[teknobucks]

imported post

Bill Gates, World's Richest Man, Bets Against Dollar

Jan. 29 (Bloomberg) -- Bill Gates, the world's richest person with a net worth of $46.6 billion, is betting against the U.S. dollar.

``I'm short the dollar,'' Gates, chairman of Microsoft Corp., told Charlie Rose in an interview late yesterday at the World Economic Forum in Davos, Switzerland. ``The ol' dollar, it's gonna go down.''

Gates's concern that widening U.S. budget and trade deficits are undermining the dollar was echoed in Davos by policymakers including European Central Bank President Jean-Claude Trichet and German Chancellor Gerhard Schroeder.

The dollar fell 21 percent against a basket of six major currencies from the start of 2002 to the end of last year. The trade deficit swelled to a record $609.3 billion last year and total U.S. government debt rose 8.7 percent to $7.62 trillion in the past 12 months.

``It is a bit scary,'' Gates said. ``We're in uncharted territory when the world's reserve currency has so much outstanding debt.''

A week before Group of Seven officials meet to discuss currency policy, Trichet repeated the ECB's concern over the dollar's drop to record lows against the 12-nation euro currency.

Euro Rally

The euro rose as high as $1.3666 per on Dec. 30 and last bought $1.3045. A stronger euro reduces the competitiveness of European exports and crimps growth among the nations sharing the currency.

``The governing council of the ECB has repeated a very, very short sentence, namely that the sharp moves upwards of the euro were unwelcome and that we thought they were counterproductive from the economic growth perspective,'' Trichet said at a Davos panel discussion today.

The last meeting of G-7 finance ministers in Washington in October said that exchange rates should reflect economic fundamentals and that excess volatility in currencies is ``undesirable.''

U.S. growth reached a five-year high of 4.4 percent in 2004, outpacing Europe for the 11th time in 12 years. The euro region probably grew 2.1 percent, according to European Commission estimates.

Deficit Risks

U.S. President George W. Bush is pledging to clamp down on spending to halve the budget deficit -- $427 billion in the 12 months through Sept. 30 -- during his second term. The administration releases its fiscal 2006 budget on Feb. 7.

The U.S. budget shortfall is ``the No. 1 risk, disregarding geopolitical risks'' to the global economy, German Deputy Finance Minister Caio Koch-Weser said in a Jan. 27 interview in Davos. He urged Bush to present a ``credible'' plan for getting the deficit under control.

Chinese central bank adviser Yu Yongding said in Davos the U.S. government should do more to tackle its record current- account deficit and ease pressure on China to loosen its currency's peg to the dollar.

``The U.S. should take the lead in putting its own house in order,'' Yu said. ``It's the root cause'' of global imbalances. ``China will make its contribution, but the world should not put disproportionate pressure'' on the country.

Deficit Cutting

U.S. policymakers including Trade Representative Robert Zoellick defended Bush's deficit-reduction plans and blamed the U.S. trade gap on sluggish growth in Europe and Japan, which reduces foreign demand for American goods.

``One has to get the budget deficit down, but the question is how do you do it,'' Zoellick said today on the same panel with Trichet. ``It's at least our view that you want to do it by slowing the growth of spending.''

Gates reflected the views of his friend Warren Buffett, the billionaire investor who has bet against the dollar since 2002. Buffett said last week that the U.S. trade gap will probably further weaken the currency.

``Unless we have a major change in trade policies, I don't see how the dollar avoids going down,'' Buffett said in an interview with CNBC Jan. 19.

Gates in December joined the board of Berkshire Hathaway Inc., the investment company that Buffett runs. Forbes magazine's list of billionaires ranks Gates, 49, No. 1. Buffett, 74, is second, with more than $30 billion. Almost all of it is in Berkshire stock.

Gates described China as a potential ``change agent'' for the next two decades. ``It's phenomenal,'' Gates said. ``It's a brand new form of capitalism.''

Gates's $27 billion foundation in September received approval from China's foreign-currency regulator to invest as much as $100 million in the nation's yuan shares and bonds.



To contact the reporter on this story:
James Hertling in Davos at jhertling@Bloomberg.net; Simon Clark in London at
2059 or sclark4@bloomberg.net.

To contact the editor responsible for this story:
Emma Moody in New York at emoody@bloomberg.net
Last Updated: January 29, 2005 06:08 EST

 

[coolhand]

imported post

This article does a good job explaining the dollar dilema with Asia.

http://www.brookesnews.com/040612ams.html

 

[Guest]

imported post

Mr Bucks,

Thought you would like this...little heavy on the math...but it basically says the dollar is going to be crushed...

Buy silver...the dome house has topped...get out of stocks.

Tom,

Remember December 28 when you said I was scaring people...well BOO...the next direction of the market is down, down, down. Sell into any rally.

I have been calling for this for seven months...please evaluate and if you are thinking along my lines...SELL.

MT

P.S. I am making TONS of cash shorting the market...do not have me take your money.

On Friday the civil service TSP cash hit around 3:30pm...that was the only reason the indexes got hit even harder.

Social security reform is going to be a disaster. Good luck out there.

 

[Guest]

imported post

teknobucks wrote:

Greenspan is trying to prevent a collapse of the dollar, which has been declining for 2 years. So far he has managed to minimize the downward spiral.

The only reason you're not seeing big inflation is because China has frozen its exchange rate, and to a lesser extent Japan. You don't need to be a genius to realize what a falling dollar and an increasing trade deficit means in terms of inflation.

Long term (1-3 years) the I fund willoutperform the s and c.

Tekno

ps: Over the last year I've loaded up on the I fund every time I hear the dollar is growing stronger and every time it has paid off!

Mr Bucks...this time the falling U.S. dollar is not going to help the I fund....this is a repeat of the year 2000...HEY GANG who has been saying that for six months...

do not pat me on the back to much.

 

[Guest]

imported post

my cut and paste did not take.

http://www.cbo.gov/showdoc.cfm?index=6060&sequence=0

 

[tsptalk]

imported post

MarketTimer wrote:

I have been calling for this for seven months

HEY GANG who has been saying that for six months...

do not pat me on the back to much.

What ego? Why should we have worried six months ago that the market was goingto pull back in January, when we were at the start of a monster rally? We actually made good money in the 2nd half of 2004while you were hiding under a rock. What is going to happen in the next 2 to 4 weeks? That's what we want to know.

 

[Guest]

imported post

Look at 2000. History does repeat itself.

Everyone is still bullish...after GDP is under inflation??? Coupled with raising interest rates and inflation...that simply does not work.

I will send you an e-mail Tom withmore data...you may want to read and heed.

Also the ego guy was out of the market a good part of October when it was falling like a rock....I made good cash...if you read my posts in December when the market DID NOT care about the economic data (retail sales, unemployment claim, job reports, work week hours, wage week, etc, etc)..things were getting a little frothy. I posted here to sell December 28...I know...ANOTHER BAD call by the old MarketTimer. I was told not to scare people and stay bullish...well how do the horns feel???

Easy to make money - hard to keep .

God bless.

MT

 

[Guest]

imported post

MarketTimer wrote:

I have been calling for this for seven months

HEY GANG who has been saying that for six months...

do not pat me on the back to much.

Hey MarketTimer, if you're so good at calling the markets, what did you make last year in TSP and why not show everyone your allocations? You afraid? Sarah

 

[Guest]

imported post

Rolled my TSP into a Traditional IRA on the third of January 2005.

Did not contribute. Started the year around $380K and cashed out at $424K and change.

Sell into any rally.

Be safe out there.

MT