several so called “gurus” are out there saying they remain bullish on the USD for the rest of the year, some even have some valid points or reasons to support thier beliefs.
But if you looked at the st louis fed research, the link is a few posts up.
How can you be bullish USD?
GET this if you cannot understand the graph! Monetary base has increased
100% in the last 6 months, basically they have doubled the money supply
but their assets have remained the same! This means that if you had $1000 in the bank 6 months ago it is now worth HALF as much as it WAS worth. So in 6 months the dollar has LOST half of its value, I dont care what the USD index is doing.
Does anyone remember Lehman Bros? They got in a pinch and issued a whole bunch of NEW stock and sold it for the same price as their stock price was. This was a no brainer! Company assets did NOT increase. All they did was severely dilute the value of thier shares. True the price stayed propped up for a shirt bit. But then what happened? HAHAHA! Someone pulled the rug out from under them?
You cannot increase the monetary base by 100% and think you have done anything except cut the value of the USD in half, that is of course considering assets did not increase. Can you say dilution? If I buy a gallon of 100% pure concord grape juice for $10, Drink half of it, and fill the jug up with water so it is only 50% grape juice, then sell it for $10.
Who is the dumbarse here? ME? The seller? Of the buyer? If you need me to answer that please return to infantpips.com you failed!
It may take a bit for the reality to kick in, but YOU CANNOT double the monetary base, keep assets the same and think $1 is still worth $1! DOH!
Eventually everyone is going to figure out they bought diluted grape juice!