Minyan Mailbag: Tipping Point
Note: Our goal in Minyanville is to remove intimidation from the financial markets and encourage an interactive dialogue among the Minyanship. We share this next column with that very intent.
Could it be? Could the world be finally wising up to the problems in this country? Looking at the action of the dollar over the last few days, I might have to say maybe. Dollar got whacked on Friday and yesterday. It was sitting at support at 83.50 when the CPI data hit and then rallied to slightly over 84. It is now flat on the day, no scratch that is down slightly. Hmmmm.....seems like people may be dumping when they could. Couple the dollar's action with the price of gold over the last few days and the stinging snap back rally in the HUI (13 points in two days!) and things might get interesting around here.
I have been refraining from reading too much into short term moves in currencies.
I still maintain that we need to see dollar/yen break down to the 100 level and beyond to begin to affect U.S. rates significantly, which will break the liquidity cycle. This will not be a planned event, just market forces taking over.
But my radar screen is on all night and Roach and now Volker are sounding the alarm bells of a "tipping point".
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