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marcd77 (95.62)

U.S. dollar rally in the face of negative fundamentals?

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November 12, 2008 – Comments (4) | RELATED TICKERS: GLD , GTU , UUP

U.S. Government tax collections have for the most part been in an up-trend.  It is likely that in the face of the OTC derivatives meltdown and its effect on both Wall Street and more importantly Main Street that less and less Americans and their businesses will be capable of paying the taxes the way they once have.  Lower tax collections in the face of increased government spending will lead to higher deficits and the accumulation of more debt, this is quite negative for the dollar regardless of the recent trading pattern. 

4 Comments – Post Your Own

#1) On November 12, 2008 at 9:59 AM, TDRH (99.98) wrote:

Hard to get my head around why the dollar remains strong.

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#2) On November 12, 2008 at 11:05 AM, cbwang888 (29.80) wrote:

I think it is the short term effect of liquidation of everything in US. However, it is still unbelievable giving that endless bailouts are happening.

Government intervention is making thing worse and worse ... 

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#3) On November 12, 2008 at 12:03 PM, NOSMATTHEW (64.08) wrote:

lol

we are going to run out of paper from all the printing going on.... dollar bills, bonds...

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#4) On November 12, 2008 at 7:02 PM, nuf2bdangrus (< 20) wrote:

The dollar is strong because it is the currency of credit and debt.  All unwinds must be paid in dollars.  Until that's over, dollar is king.  Then, it will be a screaming short.

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