He mentions, “While scanning the financial news of late, it is pretty hard to build a case for the USD strengthening, in my opinion. There are a number of factors I have not seen much “to do” about. This scares me.”
He makes a very good point. What good news is there for USA out there right now? Obama hasn’t done much, in fact, many people would argue he’s even worse than Bush. Ok, but the blame can’t just lie at the government. Look at everything; it’s in a bad shape. Prices have gone through roof, food, commodities, labour, materials, everything. In the meantime, people are losing jobs, taking wage cuts, etc… A bad bad formula for the USA.
Mark continues, “For example, California is in horrible shape. If it were its own country, California would rank around eighth in terms of its total GDP output compared to all other nations. That’s a pretty serious state/nation. However, its massive deficit spending plagues the state. I seem to remember reading somewhere that California‘s shortfall will be around $30 Billion. The collective gap between all states’ income and obligations next year is estimated at $55 Billion. Ultimately, this hurts the United States and the USD.”
For further analysis of this dire situation, visit:
http://tradingviews.com/b/articles/archive/2010/07/19/is-the-usd-on-a-doggy-downer.aspx
If you read jamie saettele’s book “Sentiment in the Forex market” you see that he analyzed all historical news reports about dire situation and showed that they were all proven to do exactly the opposite to the market.
I am not presuming to be a market analyst but it would be interesting to come back to this post 3 months from now and see what the market did.
– Asaf.