our dollar on STEROIDS
Earlier this year, there was a congressional hearing on the use of steriods in baseball. But, no one in Congress seems to give a damn that our national currency is on steriods:
The dollar had a shot in the arm this year from a steady stream of U.S. interest rate rises. The Federal Reserve is expected to raise rates for a 14th straight meeting in January, taking its key rate to 4.5%, and more rises are seen possible.The implication confirms my earlier assessment that our national deficit is on steriods and the money market is like OTB.
In midafternoon trading, the euro was off against the dollar at $1.1823, down 0.1% from late Thursday.But when the horse doesn't perform, instead of injecting the horse with steriods as you would in horse racing, the dollar gets "a shot in the arm." The horse (us) is simply whipped harder to chase after fewer carrots (dollars).
Against a basket of currencies, the dollar is poised for its strongest year since 1997.
If it made a convincing break above 91.50, the dollar index would close 2005 with its highest annual percentage gain since 1984.
[A]fter a three-year, 30% decline driven by worries [that] the United States [could not] finance its growing trade deficit.But of course, this strategy cannot last because the horse will eventually drop dead.
The greenback [rebounded when the Fed] raised official interest rates 13 times since June 2004.
Currency strategists at UBS expect . . . dollar weakness to resume later in 2006, as the Fed cycle comes to a conclusive end and carry differentials begin to erode.I say, what's good for the goose is good for the gander; it's high time for a congressional hearing into the use of steroids in the money market.