Wednesday, April 6, 2011

4/6 11:30

Until 4/19 I'm just puttering in my data.  I'm flat all markets and spending time in research and programming.  
According to their sentiment gauges I can't buy bonds or the dollar for quite a while yet.  So this leads me to conclude that during the upcoming stock market decline the flight to quality will not engulf the dollar or bonds.  I believe that Ben has screwed the pooch with QE2 and that international portfolios are rapidly restructuring away from dollar investments.  I'm not saying that in a serious stock market decline that the dollar and bonds will not benefit and rise somewhat as the crisis unfolds.  I am saying that until Ben is removed or the Fed madate is shifted away from full employment (by Ron Paul and friends) that the huge capital shifts in times of crisis will be concentrated in less Keynsian markets.  The United States of Keynes is now established and is in bitter war with the Austrians.
The dollar indicates similar soundings.  Normally I would buy dollars/bonds to ride a declining I1.  Not this time.  As can be seen below the dollar initially rallied off of it's October bottom in line with
it's sentiment gauge, but started it's decline in December, even though it's sentiment gauge continued
upward.  This indicates powerful fundamental forces overriding normal cyclical shifts in psychology.

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