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425Cat
Advisor

High in dollar low in corn

Should be setting some sort of high in the dollar and some sort of low in the corn at this time

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9 Replies
NDf
Senior Contributor

Re: High in dollar low in corn

Matbe, but why?  picking tops or bottoms can be expensive wirh out a good reason.

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425Cat
Advisor

Re: High in dollar low in corn

Time and price possiblilty and probabliltiy

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rusureofit
Frequent Contributor

Re: High in dollar low in corn

As the Euro falls apart the demand increases for the US Dollar, increased demand raises the price.....to keep the price from getting too high too fast you have to print more dollars. 

 

Here is part of an article if found:

 

Most people have no idea just how big the bank insolvency problem really is in Europe and beyond.  Egon von Greyerz, who is a managing partner at Matterhorn Asset Management, said “trillions of dollars” will eventually be needed to save the financial system this time.  Yesterday, Egon von Greyerz said, “The bail out for Spain’s Bankia is now up to $25 billion in refinancing requirements, but that’s just the beginning.  We’re looking at country after country here where the dominos are falling.  The refinancing requirements worldwide are getting astronomical, and they will escalate at a faster rate.  I’ve said to you that I expect the requirements to be in the tens of trillions of dollars, and that’s just for governments.  If you add to that corporate debt, private debt, mortgage debt, you are talking about sums that are hard to imagine.” (Click here to read and hear the complete interview on King World News.)

Any big money printing bonanza must include the biggest currency creator in the world, and that is the Federal Reserve.  Will the Fed printing press try to save Europe?  The answer is a resounding yes.  Last night on Larry Kudlow’s CNBC show, former Fed Governor Randy Kruszner said this about the Fed/Euro swap agreement already in place, “They already have a big facility open with the European Central Bank (ECB) and so they actually don’t have to do anymore in order to allow more dollars to get there.  The ECB just has to ask for it and it will come forward and my guess is they’ll be doing a lot of asking.  I think, basically, they can get as much as they want.”   Instead of Mr. Kudlow asking why the Fed is bailing out Europe—again, he was gleeful as if this was the only thing that could or should be done.

Never mind the inflation or possible hyperinflation.  Just print, print, print all the digital money it takes to “fix” the problem.  According to famed investor and newsletter writer Harry Schultz, the “fix” is in, and it was decided at the recent G-8 and NATO meetings, recently, in the U.S.  Sunday, Shultz said on JSMinset.com, “President Obama is terrified that a financial meltdown of the Euro system will spill over into Wall Street and result in his losing the November elections. . . . The bottom line is that if Greece leaves the Euro, the contagion will spread overnight to Spain, Portugal, Ireland, and, perhaps, even Italy. So, the IMF, the Obama Administration and the ECB are all on board to further delay the reality of the financial and banking crisis through hyperinflationary measures.  The idea is that the situation will take many months to fully play out, and Obama and his re-election team hope that the system will hold together past the November elections.”

 

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jrsiajdranch
Veteran Advisor

Re: High in dollar low in corn

Just another point of view.

 

TOKYO (Reuters) - The Federal Reserve could resort to more quantitative easing if the economy deteriorates, but this situation is unlikely as it is on track for a moderate recovery, an official of the central bank said on Thursday.

Europe is a potential risk to the global economy and it is up to European governments to follow a plan that reassures financial markets they can repay their debt, St. Louis Federal Reserve President James Bullard told reporters in Tokyo.

Investors are on edge amid doubts about whether Spain can afford to bail out its banking sector and whether voters in Greece will reject strict fiscal austerity measures in an election in mi-June.

Bullard, who is not at present a voting member of the policy-setting Federal Open Market Committee but will be next year, said he still expects the U.S. economy to grow and for the unemployment rate to steadily fall this year.

"Recent data have been somewhat mixed, but not enough for me to change my forecast of achieving moderate growth," Bullard told reporters.

"However, what is not so good is the situation in Europe. The situation in Europe is grave, and we need vision and rapid action so this does not turn into a meltdown for the global economy."

RISKS

It is up to Greek voters to decide whether or not they want to remain in the common currency zone and other European countries should have plans in place in case Greek voters back political parties that want to abandon fiscal austerity, Bullard said.

When asked whether the Fed also needs a contingency plan, Bullard said the U.S. financial sector is much healthier that it was three years ago and that stress tests on banks showed the United States is about as prepared as it can be.

Bullard declined to recommend specific policies to Europe, but he did say that European countries cannot rely on the European Central Bank to solve problems with fiscal policy.

Bullard reiterated his forecast that the U.S. economy will grow 3 percent this year and the jobless rate will fall to 7.8 percent as a moderate recovery takes hold.

The Fed cut overnight interest rates to near zero in December 2008 and has bought $2.3 trillion in government and mortgage-related debt in a policy called quantitative easing to push other borrowing costs lower and spur a stronger recovery.

Bullard said he expects interest rates to rise in late 2013, not late 2014 as the Fed's policy committee is currently indicating.

The Fed's next policy meeting is June 19-20. Two days earlier, on June 17, Greece holds an election that could signal its departure from the euro if voters support parties opposed to the strict terms of the country's bailout.

The U.S. experience with quantitative easing shows that the Bank of Japan's purchases of government debt will eventually help it achieve its goal of a 1 percent rise in consumer prices, Bullard said.

(Editing by Michael Watson & Kim Coghill)

 

 

Just remeber that this is an election year and they need OIL to drop. You cannot print money and have oil drop in price. ALso they need food to go lower so NO QE# at this time.


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425Cat
Advisor

Re: High in dollar low in corn

Not saying the dollar is going to zero just looking a little toppy right now??

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GoredHusker
Senior Contributor

Re: High in dollar low in corn

I'm a frequent observer of the dollar trade.  I probably actually watch it harder and more often than the grain futures because I have the belief that it more often than not gives the grain futures their direction.  It might very well be toppy as the technical indicators show it is.  However with Europe imploding, there's really only one chance for any kind of major correction in the dollar.  The Fed holds the keys here.  If the Helicopter known as the Bernank decides to derail any kind of chance for Obama to get reelected by implementing QE3, then we will get a major correction in the dollar.  If he does not, I don't see it going much lower.  The problems in Europe are not going away.  In the past three years, Greece seems to make the news at least every other month.  As Europe burns, China's economy slows.  All point higher for the dollar trade. 

 

With the way commodities are falling across the board, I'm just waiting for the next shoe to drop in terms of our banks and their commodity exposure much like 2008.  There has got to be several hedge funds under tremendous pressure right now as their long only positions are costing them big time especially in the energy markets.  Will 2012 be round 2 for TARP?

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425Cat
Advisor

Re: High in dollar low in corn

They will print , they have to

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GoredHusker
Senior Contributor

Re: High in dollar low in corn

Of course they will print, but that isn't the question.  The question is whether they print sooner or later?  If they don't print before the election, it is quite likely the dollar rallies an additional ten percent.  The last time the dollar approached 90, corn prices were in the threes.  By waiting until after election, there's a lot of downside left in most commodities.  A rally from 3.50 just isn't too exciting. 

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