mercredi 11 mars 2015
Reflexivity in the USD
Posted on 11:07 by nice news
I shall try to show that freely floating exchange rates are inherently unstable: Moreover, the instability is cumulative so that the eventual breakdown of a freely floating exchange rate system is virtually assured. George Soros
My first thoughts when I found myself a few months back re reading this opening sentence for the 9th time on his speculation in currencies I couldnt believe how prophetic his words resonate not only then but even more so today. Then, immediately my second thought was I need to jump on this opportunity of a lifetime and get on board this amazing trade that we have before us that will play out in spectacular fashion on the way up then down.
Some of you know me when I started my first thread late 2012 (Australian Bear Raid) where I was targeting the AUD with a collective theory that this particular currency was going to collapse under the weight of a commodity bubble, the carry trade it took advantage of, and of course the massive inflows of speculative capital seeking high returns from real estate to local stocks in an appreciating currency. I like most of you did very well in this short and have taken my pound of flesh from the land down under. Once I got out of the market to come back to earth and enjoy life once more I waited for a new opportunityThen I found myself a few months ago really intrigued by KING DOLLAR and two crucial chapters from Soros book.
With that being said, I like most here (hopefully) started to believe the dollar story and reluctantly got long at first then started to pile in when the trend kept getting stronger. But of course I wanted to know why and how long this market can fly. This led me to reread probably the most important chapters of the book which in my opinion is a current blueprint for how the dollar will trade for the next year or two;
The fundamental map I will share in the pages that follow are my opinions on what could be a spectacular rise and decline similar to what we saw from 1981-1988 in the dollar.
I will try to frame this thread similar to the Australian bear thread with quality content, extensive excel data points, and the trade setups. As always I welcome both bears and bulls of the dollar to share ideas and thoughts with so that we all can constantly think about our approach in this currency.
Before I layout my bullish case on dollar in the next day or two I wanted to allow those who have not read his book read the chapters I am speaking about. Most of the two chapters are written below and I highly recommend at minimum the serious currency practitioner take to heart the framework Soros lays out in the Reflexivity in the Currency Market chapter. It not only helps me when I decide to plunge in the currency markets, it also gives me a framework in understanding the constant flow chart that is speculative capital shifting around the world.
I look forward to another interesting thread with many here who are not out for the scalp but who are looking to ride macro trends,,,
My first thoughts when I found myself a few months back re reading this opening sentence for the 9th time on his speculation in currencies I couldnt believe how prophetic his words resonate not only then but even more so today. Then, immediately my second thought was I need to jump on this opportunity of a lifetime and get on board this amazing trade that we have before us that will play out in spectacular fashion on the way up then down.
Some of you know me when I started my first thread late 2012 (Australian Bear Raid) where I was targeting the AUD with a collective theory that this particular currency was going to collapse under the weight of a commodity bubble, the carry trade it took advantage of, and of course the massive inflows of speculative capital seeking high returns from real estate to local stocks in an appreciating currency. I like most of you did very well in this short and have taken my pound of flesh from the land down under. Once I got out of the market to come back to earth and enjoy life once more I waited for a new opportunityThen I found myself a few months ago really intrigued by KING DOLLAR and two crucial chapters from Soros book.
With that being said, I like most here (hopefully) started to believe the dollar story and reluctantly got long at first then started to pile in when the trend kept getting stronger. But of course I wanted to know why and how long this market can fly. This led me to reread probably the most important chapters of the book which in my opinion is a current blueprint for how the dollar will trade for the next year or two;
The fundamental map I will share in the pages that follow are my opinions on what could be a spectacular rise and decline similar to what we saw from 1981-1988 in the dollar.
I will try to frame this thread similar to the Australian bear thread with quality content, extensive excel data points, and the trade setups. As always I welcome both bears and bulls of the dollar to share ideas and thoughts with so that we all can constantly think about our approach in this currency.
Before I layout my bullish case on dollar in the next day or two I wanted to allow those who have not read his book read the chapters I am speaking about. Most of the two chapters are written below and I highly recommend at minimum the serious currency practitioner take to heart the framework Soros lays out in the Reflexivity in the Currency Market chapter. It not only helps me when I decide to plunge in the currency markets, it also gives me a framework in understanding the constant flow chart that is speculative capital shifting around the world.
I look forward to another interesting thread with many here who are not out for the scalp but who are looking to ride macro trends,,,
Reflexivity in the USD
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