Something other than the cwb

[cottonpicken]

Anybody out there interested in actual macro marketing issues.The dollar,cando,euro,yen,rembi,rubble,oil,gold,curren t account deficts,trade imbalances,derivatives,chindia's dollar reserves.

[NeilS]

Ok Cottenpicken, I'll bite.

What do you think happens to the cando in light of a collapse of the US dollar? Will we follow the Euro, Yen or other currencies, or will our dollar stick closer to the USD?

[cottonpicken]

IMHO,the canadian dollar is the srongest in the world.The euro is a basket of sh*t but will still apreciate against the dollar.

The u.s dollar is in real trouble.The last two days of trading was something to behold.If there is an all out run on the dollar and it breaks below .8050 its next support level is .72,this would put the cando around par.The guys i follow say this is going to happen by the end of jan. if not sooner.I can tell you for certain that a lot of top money managers are very,very worried about a number of possible scenarios once this plays out.The term global economic meltdown is thrown out quite a bit.

One of the main "scary things" is the derivatives trade.If you havent heard of it it is because it hasnt been around that long.But in that short time it has grown to about 370 TRILLION dollars.It freaks alot of people out.Buffet called it "finacial weapon of mass destruction".The derivatives trade is extremly complicated to understand and i'm not sure i fully do.In a nutshell i believe it is basically one huge hedge book on debt?

Sunday night should be interesting,if your up i would suggest checking the dollar,oil,gold for any exteme volitility.

[wedino]

CP, What was spose to happen?

[cottonpicken]

Exactly what i thought and im up over thousand bucks.

[wedino]

Way ta go, but I don't see any exteme volitility

[cottonpicken]

Dont bye oil
Dont bye gold
Dont bye wheat
US dollar up
CANDO down
Cottenpicken/Pillypilsner doesnt know anything
Is that what you want to here?

[AdamSmith]

I think what CP is trying to say is that all the worlds business is done in US Dollars and that includes the buying and selling (the free market discovering of price) of commodities. So when a bushel of wheat is $5.00 in the US with a high US dollar Asian buyers will pay only so much because they only have so much to spend, but when the US dollar falls the Asian buyers buying power increases, so they can afford to buy more and pay more for wheat. Thus causing the demand and the value of the commodity in this case wheat to rise and rise substantially.

I think what he is also saying (and I agree with him) is that the booming economies of China and India are going to challenge the US as the dominant player and price setter in the future for all commodities.

He is also saying that if and or once certain technical indicators are touched a steam rolling effect may occur and which will make past truths irrelevant. Like wheat is at it's peak at $5.00.

Am I close CP?

[wedino]

I see US $ down, Can $ up today. Gold up also. I think CP is trying to say US economy will drive down value of US $, just a matter of time for that to happen. CP has mentioned Jim Sinclair & this is what Jim believes. Jim predicts, on his site, that gold will eventually sell for $1600/oz.

[cottonpicken]

Yep,your close adam and possibly right but my understanding is chindia is getting full on their dollar reserves and when the dollar starts to head south their going to want to turn those dollars into tangibles or hard assets.As the worlds reserve currency there are ALOT of dollars out there.If everybody tries to hit the exits at once there could be pandamonium.One of the things people seem to miss is that oil/gold hasnt gone up as much as the dollars purchasing power has gone down.
Throught all of history 1 ounce of gold has bought 1 fine taylored suit.It's a ratio of value.

As far as Sinclair he's been dead right all along.He is a heavyweight investor.

[poorboy]

Cottonpicken,

You have been promoting higher ag prices for quite a while now and today you are indicating that the price of wheat, corn, soybeans, etc is going to climb in price, due in a large part to the fact that the US dollar is losing strength. I am assuming that the canadain dollar is going to be stronger then, so if farmers don't do anything about a currency hedge then when wheat hits $10/bushel it may be in US$, but the same $5.00/bushel Canadian as today.

What is the prediction on interest rates. If US dollar drops and economy goes into recession and interest rates climb, is it going to pull Canada along and cause higher interest rates here, or are we just going to have a higher dollar and low rates, attracting lots of foreign investment that used to go stateside.

I always welcome views and explanations that everyone has for future outlooks. Sometimes I find that I get so wrapped up in my own little world, that I am missing the big picture.

[cottonpicken]

Poorboy,the canadian dollar is gaing strength because commodities are riseing.If our dollar is higher we have a higher purchasing power on things we import so it is kind of a wash in terms of what we are getting paid.

The u.s fed is between a rock and a hard spot on there interest rates.If rates rise to contain inflation and support the dollar they risk major damage to their economy because of all the debt out there.If they cut rates the dollar is toast and foriegners will stop buying us treasury instruments.
Its hard to say what might happen but for the "foreseeable" future the Us dollar is going down and liquidity will be going into commodities.IMHO.

[poorboy]

If the price of wheat on US futures goes up and our CDN $ goes up up the same time, the price of wheat in Canadian dollars per bushel in my pocket may be the exact same. So a huge rally in grains, may not mean any more money in my pocket, unless the currency risk is accounted for. I am not a trader, so I am wondering how big of a risk the change in the dollar really is in everyones eyes.

I an in the business of hopefully selling more product than buying, so the dropping US dollar is of a major concern to me. Part of the reason that historic farm payments have been so high in the US is because their dollar was so strong that it hurt the farmers income substantially. If we were to take a CDN $ at par or 5% above a US dollar it would hurt canadian farmers big time, unless there was such a huge shortage of food that prices finally rise like the oil does. Food prices need a major shortage scare to make people want to price it ahead more than now. I don't know that anyone in the world actually ran out of gas or oil in the latest rally's but the perception that they might has sure caused the price to climb. Shrink these grain inventories even more and hopefully we will see some fun times in agriculture.

[cottonpicken]

What is happening now has already happened in the past.
In the 70's early eighties we had a strong dollar and strong commoditie prices.
The u.s farmer has been stuck with a strong dollar and week commoditie prices.
The reason the our dollar is getting stronger is the higher commoditie prices.
The most important thing to a producer is the price he recieves for his product.It is his "leverage".

"give me a long enough lever and i'll move the world"