The federal reserve's goal of depreciating the dollar to reduce the true value of the federal government's debts is working. The US Dollar ($USD) has just closed at multi-year lows (75.61). The next level of support is @ 74 hit in November 2009. Thereafter, the all-time low around 72 hit in June 2008 is in sights. I expect that we will at least test both levels before the end of the Fed's QE2.
Meanwhile, we've begun to see bonds not behave as traditional safe havens -- by not rallying during crisis times and in some cases even selling off. While treasuries rallied a bit this week, overall yields are higher now than they were at the beginning of the year.
The Ultrashort 20year bond fund (TBT) is a great way to play this, with a stop slightly below $35. I also continue to love $GOLD and gold miners as with the currency being devalued, Gold will be a big beneficiary.
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