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Collinson FX Market Commentary- October 23, 2013 - USD crashes

by Collinson FX on 23 Oct 2013
CTECH - San Francisco - 18ft International - Day 3, 11 September 2013 © Richard Gladwell http://www.richardgladwell.com

Collinson FX market Commentary: October 23, 2013

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The long awaited, and much delayed, Non-Farm Payrolls came in lower than expected and Unemployment fell to 7.2%.

This is relatively good news and would ordinarily suggest an improvement in economic conditions. This would suggest a tapering of the QE Infinity policy that the Fed have been foisting upon the US and the Globe. The Fed has siezed upon the recent US Government shutdown as an excuse to extend Monetary expansionism, without fail. Bernanke seems intent on expanding the Feds balance sheet beyond all comprehension and without an avenue of return to normalcy. This will certainly continue under the leadership of dovish, democrat... Yellen!

The great leap forward, harks back to Sino/Russian command/control plans for the economy and is working out well for the Obama regime. The rollout of Government controlled Health Care is going swimmingly, and is a huge pin-up poster for more, big Government.

The message has been sent and the Dollar crashing, with the EUR hitting 1.3800 and the GBP to 1.6250! The demise of the USD is a direct result of the Fed's monetary policy and is destroying wealth in the USA.

This is modern economic and monetary socialism in action and because the reserve currency is being undermined other Central Banks must follow, suggesting capital flow in to hard assets.

Commodities will reflect this move and is translated in to the associated currencies with the AUD moving to 0.9700 and the KIWI 0.8515. This is purely a reflection of the dire state of the Dollar and certainly not a symptom of healthy local economic conditions. Currency wars resume!


Collinson FX market Commentary: October 22, 2013

The drama of the last couple of weeks has played out and left the markets exhausted. The only economic data released overnight in the US, was Existing Homes Sales, which declined 1.9% and set off a decline in Home Builders.

The September Jobs Report is due out tonight, after delays due to the Government shutdown. The Government shutdown and the Debt Ceiling crises has empowered the Fed with a further reason to resist the reduction of their boundless expansion of the money supply. The QE Infinity has been a snowball on a steep decline with $85 Billion being added to liquidity every month. It now appears unlikely that Bernanke will attempt to commence the taper, which will result in a dim view of his reign historically.

His successor, Yellen, is a Democratic Dove and will gleefully extend the supply of money thus undermining the Dollar and asset values. This will result in a monetary form of redistribution of wealth..... Central Bank Socialism!

Currencies remained steady with the EUR 1.3680 and the GBP 1.6150 reflecting the weakness in the Dollar. Risk appetite remains strong and has the associated currencies moving towards recent highs, with the AUD trading 0.9650 and the KIWI slipping back to 0.8420. US Monetary policy will continue to undermine the US Dollar thus supporting currencies, assets and equities.


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