In a previous post after the massive bailout plan was approved I predicted that the USD will lose value in the short term which it did. I hope you made some quick profits from that recommendation. Buy yourself something new.
However, it seems that the tide has turned and the USD is increasing in value. Why? Simply put, the financial storm has spread like wildfire to the rest of the world (which is also something I predicted weeks ago). In this global economy nothing stays in one place.
The basic truth is that no matter how much people say that America’s power is going down it is still the locomotive of the world’s economy. Where it leads everyone else will follow. It isn’t just the Americans who lived way beyond their means. In the UK the Bank of Scotland is bankrup and had to be bought out by the Government. Iceland as a country is bankrupt. It’s incredible.
The truth is that when the financial s**t hits the fan, the US still has the best consumer society, the finest financial sector, and the most influence and power in the world. Usually, the bigger house withstands the storm better, and it will so in this case as well.
As to the USD, now that it’s obvious that the trouble is global, the USD has become something like Gold, a secure place to invest your money in tumultuous time. That’s why I predict that the USD will rise in the long run. It may not start tomorrow so don’t rush to place any trades yet, and of course, this is just my opinion, so make your own analysis, but that’s the way I see things. Let’s see if the Forex Seer will have it right again.
Happy trading.
