Thursday, February 24, 2011

USD Ready To Test Long Term Support

The USD is down $.32 as I write this article.  This is while Asian and European markets are down and precious metals up.  Oil is over $100 (Brent hit $120).  The dollar is now only $.20 from testing long term support.

It has failed to bounce significantly off the prior test.  Considering the fact that the fear trade is no longer denominated in the USD this coming test does not bode well for success.  The Fed has killed the USD and is killing the treasury market.  Mind boggling how one man (sure it's a committee but you really don't vote against your boss) controls in many instances global monetary policy and answers to nobody nor is subject subject to an audit.

As Bernanke tries to increase inflation to stimulate demand, he runs the risk of demand being offset by a consumer barely able to buy food to feed their family and gas to drive to work (or the unemployment office).  The race to stimulate or choke the economy is on.


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