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Currency fluctuations


kfh227
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Who if anyone is good to listen to regarding currencies?  Are there any transparent people about what they think the future will brings?

 

Are there proxys to look at regarding future currency valuations?  I was thinking things like Prem Watsa and his fear of deflation in the USA.

 

This is interesting:

http://www.zerohedge.com/news/2014-11-13/why-rising-us-dollar-could-destabilize-global-financial-system

I have been suggesting for several years that the U.S. Dollar would confound those anticipating its demise by starting a long secular uptrend.

 

In early September I made the case for a rising U.S. dollar, based on the basic supply and demand for dollars stemming from four dynamics:

1.Demand for dollars as reserves

2.Other nations devaluing their own currencies to increase exports

3.“Flight to safety” from periphery currencies to the reserve currencies

4.Reduced issuance of dollars due to declining U.S. fiscal deficits and the end of QE (quantitative easing)

 

The attached chart is a 20 year chart.

chs-dxy-us-dollar.jpg.86d59bf37d2ab854b2b1c1f58070ba53.jpg

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Every time someone tell me "They say the Canadian dollar will do X in the future" I tell them that there is a 50% chance that the person who said it had the right direction. I don't see who in their right mind would try to forecast currencies, forecasting a micro cap is hard... so how hard do you think it is to forecast a country's economic performance.

 

Then only thing I would use as a proxy for currency would be futures, I don't have the confidence that anybody can beat a well established market like a currency market in the long term. I do believe that in that case, the market is pretty efficient. If you can't beat them, join them.

 

BeerBaron

 

 

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Every time someone tell me "They say the Canadian dollar will do X in the future" I tell them that there is a 50% chance that the person who said it had the right direction. I don't see who in their right mind would try to forecast currencies, forecasting a micro cap is hard... so how hard do you think it is to forecast a country's economic performance.

 

Then only thing I would use as a proxy for currency would be futures, I don't have the confidence that anybody can beat a well established market like a currency market in the long term. I do believe that in that case, the market is pretty efficient. If you can't beat them, join them.

 

BeerBaron

 

Exactly. And if someone could reliably forecast currency moves, they wouldn't be sharing their secret sauce in the media, they'd be leveraging up 50x and buying as much as they can.

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