Friday, February 3, 2012

It looks like the dollar is going to gain strength against nearly all currencies...

Could this have something to do with the dollar shortage that is being exacerbated by the handling of the CDS contracts by banks and regulators and by reference applies to all derivatives contracts? What we are seeing if you have read my previous posts on the subject from last weekend is that regulators are protecting a few major banks and willing to invalidate derivative contracts in such a way as to directly harm counterparties by ensuring that the contracts to not pay out, but that the premium writer gets to keep the fees - only without the risk or contractual obligation. IN the big picture the dollar is shown below and looks like it setting up to get stronger versus most of its index currencies.

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