February 28, 2008
Dollar Index Hits New Low — A Look at the Monthly Chart
Here’s the monthly chart of the US Dollar Index since 1985. You can see that back in ‘85 it was at 164.72. The DXY hit a new low of 74.07 this month — that’s a 55% drop. More recently, back in early 2002, the Dollar Index traded above 120 — that’s around a 38% drop from there in only six years.
My recent trip back to the US further strengthened my conviction that the US is in terrible secular decline — I couldn’t seem to get away from overweight, undereducated people; the divide between the rich and poor is growing even more stark; and the middle class appears to be disappearing. I also had one brush with the new “police state” which I’ll write about in a later post. I’d be very depressed if I weren’t earning CNY, didn’t own a home in China, and hadn’t diversified over half of our assets out of the dollar many years ago.
Related:
The Wind at One’s Back: Long Crude, Short Dollars - November 22, 2007
Bundchen, Avoiding Dollars, is No Dumb Blonde - November 5, 2007
Rufiyaa Times for the US Dollar - October 29, 2007
Cancel the Trip to Europe — DXY Officially in No Man’s Land - September 29, 2007
Dollar Index Entering No Man’s Land - September 20, 2007
US Trade-Weighted Dollar Index at All-Time Lows - August 8, 2007
Checking on the Doomed Dollar - July 25, 2007
US Dollar Index - Bearish Any Way You Look At It - April 12, 2007
Slip Sliding Away - November 29, 2006
Buffett Cuts Dollar Short Just As Slide Set to Resume - August 7, 2006
Nothing Can Save the US Dollar - July 11, 2006
Trading with the Trend: US Dollar Index - May 12, 2006
The US Dollar Resumes Its Slide - April 29, 2006
February 28th, 2008 at 11:25 am
The “police state” from a guy living in China, good lord. The delusions of the “educated” bigot class.
February 28th, 2008 at 11:31 am
James: That’s just it, I thought to myself this is the kind of thing that could happen in China, never the States. I am educated, possibly deluded, but never a bigot. :)
February 28th, 2008 at 11:33 am
Looks like you better sell that Chinese house asap Chairman.
http://www.forbes.com/2004/10/13/cx_da_1013topnews.html
200 million porkers in China and rising like the Euro. Have you considered Bangladesh?
“Divide between rich and poor” from a guy living in China? You must have posted this from an opium den/net cafe.
February 28th, 2008 at 11:42 am
“but never a bigot” - you’re posts are funny, but if your barbs directed at the average “uneducated” American were pointed at any other group, that’s exactly what you would be called.
Higher learning has knocked the common sense out of many a decent man, re: Global Warming caused by humans. It’s the “educated” class that bought that line of crapola hook line and sinker. Its the educated class that would gladly destroy whole economies behind pseudo science. Its the educated class that brought the world socialism (and all the death and misery that comes with it) as well. Beware the “educated” class.
February 28th, 2008 at 11:43 am
James: Sure there are fatties in China and the divide between the rich and the poor is huge, but unlike America the middle class is growing here, not shrinking. Anyway, I’m not going to argue about it, too busy packing my opium pipe, lol.
February 28th, 2008 at 3:23 pm
James, have you ever thought you are a bit fanatic about your idea of the “educated class” who you like to make responsible of all the evil on earth? Maybe you are just a part of your “educated class” and all this reflects your self-hatred.
February 29th, 2008 at 12:09 pm
James,
I hate to say it but Mao is right. I’ve had plenty of deep thoughts along the same lines over the last few years. IMO, the US is going down the drain. I’m probably more bearish on the US than Mao is.
People in the US are all about consumption. We don’t save here, we don’t care about what happens next or what the future will be like, everyone lives in the here and now. Our government and politicians are so afraid of a recession that they’d rather deal with huge inflation down the line (as if inflation wasn’t already bad enough — and no I don’t believe those BS government statistics). The US government pretends to take care of the average American, but they are really more interested in catering to the special interests.
Most people I’ve met in the US want things served on a silver platter. People here think they are entitled and that no one will ever overtake us. They simply think the US is the best place to be, and can never be wrong.
Personally, I’ve highly considered moving and I may at some point in the future.
I’m just hoping Obama can turn things around. He’s got quite a bit of work ahead of him, considering that fucking idiot Bush set us back decades.
February 29th, 2008 at 12:30 pm
It’s true that U.S. is losing the middle class.
It’s true that every country needs middle class to support the majority of govt. spending. Rich will never pay enough to cover the expenses.
It’s true that U.S. has by far the most obese among all the nations.
It is also true that China is by far the worst in income gap of rich and poor in the whole world, maybe India for the second.
It is also true that China is still a freaking commi country. I always wonder where is “community” in communism. No wonder such a shitty concept was never successful in any human land including N. Korea, China, Soviet Union, etc.
It is also true that China uses the resources so inefficiently that it’s not even funny. I cannot confirm with exact figures but it is said that China uses as much as 50 -70 % more resources to produce the same output. No shit.
It is also true that Chinese are as self-centered as Americans.
February 29th, 2008 at 12:37 pm
Correct me if I’m wrong but isn’t consumption a big factor in economic growth and prosperity. The problem is that a vast majority of the production of the goods (and to less extent services) in the US is coming from other countries? And the consumption is stretching further and further onto credit. In China a problem in the past was reliance on exports because domestic demand was seen to be lax, but not now the situation is different. (From Mao to the mall)
I’d too would love to see Obama in the White House!
February 29th, 2008 at 10:19 pm
Interested in more of your insights into the US Chairman, and any stories you can share, very interesting reading for me. It’s still number #1 on my places yet to visit.
Recently I read ‘Deer Hunting with Jesus’ which was a bit of an eye opener for me about the lifes and thoughts of the working redneck population in the US, some 30M or so of them.
Educated classes.. lol.. Didn’t Pol Pot have a beef with anyone without mud between their toes? Bigots are as bigots do, or something like that. No harm in telling it like it is I reckon. Gosh if you want your US view of reality sugar coated and get offended at reading this blog then never ever open a book by Noam Chomsky.
It’s a fascinating place for me the US of A.
February 29th, 2008 at 10:28 pm
Andrew: It is a great place and I recommend all foreigners buy a nice vacation home there right now (try to get something which is in foreclosure, lol). Never heard of “Deer Hunting with Jesus” but I’ll look for it at Amazon when I get a chance, thanks for the tip.
March 3rd, 2008 at 7:25 pm
Ive shorted RMB futures on the CME, but it doesnt work. Why? Because the contango is so huge - i.e the June contracts are higher than March, which are higher than spot. So yes spot goes up, but as the futures amortise towards spot at expiry, you lose the roll yield. As an example, in the last two months I made only about $600 on the March future, but the spot equivalent went up $4500. I lost the roll yield. Is there another way?
March 3rd, 2008 at 7:26 pm
I mean went long RMB.
March 20th, 2008 at 3:11 pm
Well you have to count the interest you are earning on your USD in your account offsetting the interest paid on the future.