Monday, February 21, 2011

USD Relative Weakness

This is amazing.  In the face of even greater geopolitical risk, the USD is up  a whopping 2 cents.  To put it in perspective

  • Futures down 13 handles
  • Oil up 5%
  • Gold over $1,400
  • Silver approaching $34

The days of the USD being the flight to safety appears to be coming to an end.  Bonds as well are not catching much of a bid.  The Fed is in quite a pickle here.  US Fiscal policy and Fed Monetary policy had a big assumption, that being low interest financing of debt would always be readily available.  If they don't stop the QE nonsense soon, that will be yet another failed Fed assumption.  Imagine if Saudi Arabia and or Iran sees more protests.


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