Posted on 06/15/2005 3:08:15 PM PDT by BringBackMyHUAC
Wednesday, June 15, 2005, 5:07:00 PM EST
TIC - A Technical Review
Author: Dan Norcini
(For Charts click on the article link beneath the title of the post--HUAC)
This presentation in chart form (see below) is the percentage increase or decrease in Treasury holdings of the big three Asian customers, Japan, China and S. Korea on a 12 month trailing basis, and a comparison of the Trade Balance vs. Net Capital Flows data.
As you can see, since the beginning of 2003, Net flows have proved to be sufficient to cover the trade deficit on a month-by-month basis with the exception of two brief periods. The first occurred in September and October of 2003, the second in August, September and October of 2004.
With the exception of 2004, there has not been an interval of more than two consecutive months in which international capital flows fell short of funding the deficit. Three months is the maximum period to this point since the dollar was in the doldrums. (I chose 2003 as a starting point since that was the first time the dollar broke beneath the psychologically important number of 100 on the U.S. Dollar Index).
This months figures, along with the revision to last months total on the flows, gives us two consecutive months in which net capital flows have been insufficient to cover the deficit in the trade balance of payments.
In light of this, I would suggest that the next two months figures will take on a critical importance as we wait to see whether a serious trend is beginning to develop in this regards.
If we get a rebound next month in the May release and net flows are sufficient to meet what will no doubt be yet another large trade deficit number, (as long as crude oil prices stay strong, look for little improvement in the negative balance of payments additionally the stronger dollar is working perversely to further aggravate the situation), then we will have reverted to the norm.
If we fall short once again, the dollar is in serious trouble in my opinion especially if the month of June comes up insufficient as well. That will establish a new and especially worrisome trend that bodes ill for the greenback down the road.
I wish people would stop trying to sell me gold. It's YOY one of the worst invesments going.
ping!
Sorry, forgot to link the article. The link is:
www.jsmineset.com
Been following this website for years. They're legit...and they're NON-PROFIT.
"If we fall short once again, the dollar is in serious trouble"
A weak dollar is good. Currently, the EU is talking the euro down, and they are tell their people that they should support a weak euro.
It's tough to sell exports when your currency is the top dog.
Holtz
JeffersonRepublic.com
Gold sux as an investment
Gold is below where it was in the 70's. It's a very poor investment unless it gets you laid.
See post #3. You might also want to consult the following chart, it will be an education for you--HUAC
http://www.a1-guide-to-gold-investments.com/images/Gold-Dow-USD-5yr.gif
See post # 8
That's one way of looking at it...but I expect the Euro will be in more trouble than the dollar...
"A weak dollar is good."
It is if you are a manufacturer who wants to sell goods overseas.
It most decidedly is not if you're a consumer who likes to buy imported goods such as cars, appliances, etc.
I happen to fall in the latter category, so I don't like a weak dollar.
What are you talking about? Gold has outperformed most investments since 2001.
Iraqi Dinar
"What are you talking about? Gold has outperformed most investments since 2001."
It's -1.9% on the year.
I said since 2001, and it's about to resume its upward track as per the original post. Same is true if oil keeps rising. Same is true if the housing bubble bursts. Etc, etc, etc. I made a mint in gold because I pay attention to these guys.
A market valued dollar is the only good dollar. It's too bad that every government out there including ours loves to screw with its currency.
==And prior to that? Gold rallied because of 9/11
That was a temporary rally. The sustained rally occured because of the sad shape of the USDollar (which is poised to get worse...much worse). See post #8.
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