Post by jeffolie on Oct 19, 2013 10:34:29 GMT -6
Confounded Interest
Anthony B. Sanders – George Mason University
10.19.13
by tonysanders
US Dollar Hits 8-1/2-month Low (But Nothing Next To 2002-2008 Dollar Collapse)
The US dollar hits 8-1/2-month low on worries about U.S. economy, the headline blares.
True, but the USDEUR rate took its biggest beating during the 2002-2008 period. But since the latter half of 2008, the dollar has been floating around in a relatively narrow band (although it seems larger on a day-to-day basis).
And if we look at a longer term pictures of the US dollar spot rate (DXY), we see the Reagan economic recovery and asset bubble and then the Clinton/Bush economic recovery and asset bubble.
But the asset bubble that followed the Clinton economic growth was painful. The Federal Reserve stepped in during the waning months of 2008 and instituted unprecedented monetary stimulus know as quantitative easing.
Since the beginning of monetary easing in 2009, the dollar has actually decreased in terms of volatility (although it doesn’t seem to be that way).
What will happen to the dollar when The Fed tapers? It may take a while to find out.
Oct. 19 (Bloomberg) — The Federal Reserve will delay the first reduction in its bond purchases until March after the government shutdown slowed fourth-quarter growth and interrupted the flow of data, economists said.
Policy makers will pare the monthly pace of asset buying to $70 billion from $85 billion at their March 18-19 meeting, according to the median of 40 responses in a Bloomberg News survey of economists. The 16-day budget impasse in Washington reduced growth by 0.3 percentage point this quarter, economists said in the survey.
Here is the corner that The Fed backed itself into.
But come May, we may see if slowing The Fed’s support of the economy sends the dollar into free-fall.
confoundedinterest.wordpress.com/2013/10/19/us-dollar-hits-8-12-month-low-but-nothing-next-to-2002-2008-dollar-collapse/
Anthony B. Sanders – George Mason University
10.19.13
by tonysanders
US Dollar Hits 8-1/2-month Low (But Nothing Next To 2002-2008 Dollar Collapse)
The US dollar hits 8-1/2-month low on worries about U.S. economy, the headline blares.
True, but the USDEUR rate took its biggest beating during the 2002-2008 period. But since the latter half of 2008, the dollar has been floating around in a relatively narrow band (although it seems larger on a day-to-day basis).
And if we look at a longer term pictures of the US dollar spot rate (DXY), we see the Reagan economic recovery and asset bubble and then the Clinton/Bush economic recovery and asset bubble.
But the asset bubble that followed the Clinton economic growth was painful. The Federal Reserve stepped in during the waning months of 2008 and instituted unprecedented monetary stimulus know as quantitative easing.
Since the beginning of monetary easing in 2009, the dollar has actually decreased in terms of volatility (although it doesn’t seem to be that way).
What will happen to the dollar when The Fed tapers? It may take a while to find out.
Oct. 19 (Bloomberg) — The Federal Reserve will delay the first reduction in its bond purchases until March after the government shutdown slowed fourth-quarter growth and interrupted the flow of data, economists said.
Policy makers will pare the monthly pace of asset buying to $70 billion from $85 billion at their March 18-19 meeting, according to the median of 40 responses in a Bloomberg News survey of economists. The 16-day budget impasse in Washington reduced growth by 0.3 percentage point this quarter, economists said in the survey.
Here is the corner that The Fed backed itself into.
But come May, we may see if slowing The Fed’s support of the economy sends the dollar into free-fall.
confoundedinterest.wordpress.com/2013/10/19/us-dollar-hits-8-12-month-low-but-nothing-next-to-2002-2008-dollar-collapse/