Thread: When the Dollar Rallies, the Market will Crash

The dollar index is an index of the dollar vs. other paper currencies . It's not like the competition is very stiff. China's money growth is running at over 25% year over year. A dollar rally can occur for any number of other reasons. *Another credit crunch like last year will leave global central bankers scrambling for dollars. *A major geopolitical event could lead to a "flight to safety" move into the dollar. During the...

Quote: Originally Posted by hypervel Fed follows market....gotta stay competitive. That would be true in the old days. New rules are: there are no rules. The fed no longer can stimulate the economy with cheap money supply (dropping interest rates). They have gone to zero and below and the banks just sit on the money. The open market shows an economy that is crippled. It cannot walk. There is a deflation of money supply in the productive...

So... The dollar could rally for a number of reasons. Founding Fathers underlines a flight to safety. The OP ties it into the FED raising the rates, and everyone scrambling to get out of short dollar positions. FunnyMoney says, however, that because gold is different than other assets, it will not suffer the devaluation normal assets have- not to the same extent. Analysts who DO view gold as an asset say that a dollar rally for any reason not...

I think so too. The dollar will have one last rally and gold a big crash. After that...

Hi Russkie, lessoil and all, it's actually pretty easy to answer those questions. It is a matter of WYSIWYG, we have already seen the script. Last year when the market did drop about as hard as has ever been seen, the dollar was a flight to safety and a was rewarded by all the liquidity movements. Gold did drop hard and so did commodity, oil, and their related stocks. But notice what rebounded very quickly, and what did not. Gold...

Quote: Originally Posted by Ares Doesn't matter, he doesn't control interest rates. The market does. The fed has been the market.

Quote: Originally Posted by FoundingFathers The dollar index is an index of the dollar vs. other paper currencies . It's not like the competition is very stiff. China's money growth is running at over 25% year over year. A dollar rally can occur for any number of other reasons. *Another credit crunch like last year will leave global central bankers scrambling for dollars. *A major geopolitical event could lead to a "flight to...

He's right, but the dollar can't rally until interest rates go up, and that ain't gonna happen while Sheriff Bennie Bernakie is on the job.

Quote: Originally Posted by phideaux He's right, but the dollar can't rally until interest rates go up, and that ain't gonna happen while Sheriff Bennie Bernakie is on the job. He'll raise them when he has to, which is when he can.

Quote: When the Dollar Rallies, the Market will Crash duhhhh....