The Dollar, A Mix of Economics and Politics
We all know the supposed economic issues weighing on the dollar with the Fed direction being number one. What I would like to review today is my current view on the dollar from a partisan political standpoint. To me the dollar signaled a significant bottom in August 2008 when Obama started his surge and it’s strength into December 2008 was a world reflection of the hope that his Presidency held. The swoon and rebound into March 2009 was reflecting the harsh realities of the bursting of the asset bubble and the subsequent fixes placed. From March 2009 to December 2009 the realities set it, it quickly became obvious that there was no bipartisan agreement to really fix the mess that had grown over the previous 27 years. Hope came back however in December 2009 and steps were being applied by the administration to start to address many of the issues. But, election posturing took over in June 2010 and we see the result today, with the significant lows in the Dollar of July 2008 and December 2009 being assaulted and the Obama administration under pressure from all directions.
While there has been some trading around in my dollar position over the past two years, the core long position goes back to the August 2008 upside breakout. Obviously I am violating all kind of trading rules by holding onto a position that has lost almost all its profits and even more importantly the violation of “Don’t Fight The Fed” even if the Fed is wrong in my opinion.
On the subject of the Obama administration and the pressure it is feeling these days, I along with a lot of other people who voted for him am not happy with a number of aspects. As I have said in some old posts in the beginning of this blog, I voted for Goldwater in my first election vote and am proud of it because he said what he believed. When the second George Bush came along I exited from the party line and found a new person, Howard Dean, who reminded me of Barry Goldwater in terms of his upfront approach. Dean is who put Obama in power and Obama conveniently forgot, no doubt because of his two political hacks, Axelrod and Emanuel. Half of that problem is now gone. The author of the new book “Herding Donkeys”, which I am now reading, was interviewed this week. See comments here:
Dean Dishes on Dems, GOP in NYC October 11, 2010 I hosted a lively discussion on October 5 with Howard Dean in NYC to kick off the Herding Donkeysbook tour. We’ll post the audio as a podcast very shortly, but Michael Tracey penned a nice summary at TheNation.com.Dean dished on a number of hot topics in both parties, predicting that Democrats will retain their Congressional majorities and Michael Steele will not survive as RNC chair. He also explained why Obama’s grassroots political movement did not follow him to Washington.In the book, Dean says that: “The Obama people ran the best campaign I’ve seen in all my life in politics. But they couldn’t translate it into government.” When I asked him why, he explained on Tuesday: “There are too many insiders on the senior staff.They’ve all been in Washington for 20 years.” One such insider, Rahm Emanuel, was specifically faulted by Dean for the “contempt” he showed toward the progressive wing of the Democratic Party. Dean declined to endorse Rahm’s mayoral run in Chicago, but joked that he was listening in the audience.The former DNC chair also predicted that embattled RNC Chair Michael Steele will be “gone in January” and will not be re-elected to a new term as party chair heading into 2012. Dean believes that Steele’s problems started when he apologized for insulting Rush Limbaugh, which demeaned his stature as leader of the party and illustrated where the center of gravity in the Republican Party really lay.Dean also labeled Democratic strategists James Carville and Stan Greenberg, who criticized Dean’s fifty-state strategy after the 2006 elections, “useless” and said they’ve been unable to adapt to a new political era.He also believes that Mitt Romney will have trouble getting through a Republican primary in 2012 (“ObamaCare is RomneyCare”) and warned Democrats not to dismiss Sarah Palin, because she “can look you in the eye and tell you something you know isn’t true.”