Sunday, Jan 18, 2015

Actually, its a tug of war between a rising Dollar, falling Euro & collapsing currency pegs

Armstrong Economics: The Dollar Pegs are Next

"The next crisis will be the currency pegs against the dollar. Here we have pegs from Hong Kong to the Middle East. We will have the same problem for as the dollar is driven higher, thanks to the implosion in the Euroland, these nations will import DEFLATION from a rising dollar. This will break their backs and force pegs to collapse around the world." Armstrong points towards the dollar reaching a strength that breaks its pegs around August 2015. He says this would lead to an awful depression. I doubt it. I think that free market economics come alive with floating pegs, providing multiple buffers to spontaneously regulate capital flows and absorb imbalances. However, adjustment could be painful.

Posted by libertas @ 10:16 PM (2652 views)
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8 Comments

1. killer bunny said...

You're quite wrong. US$ has been in multi yr bull since May 2011 and it continues (not in stratight line!). After likely corrrection the bull will resume and it will get steeper.

Deflation Baby

Sunday, January 18, 2015 11:41PM Report Comment
 

2. cornishman said...

floating pegs.... multiple buffers....

Whatever next?

Monday, January 19, 2015 12:53AM Report Comment
 

3. britishblue said...

Armstrong has been uncannily right on most of his predictions including his one ( which I think was last June) that the Swiss would not be able to maintain his Euro peg. Armstrong is a combination of being a nutter and one of the most brilliant men on the planet. at the moment it seems tha the money is going on the least dirty shirt on the town, which is the dollar and swiss franc.

Monday, January 19, 2015 09:39AM Report Comment
 

4. Anned said...

Been following Armstrong for years. His predictions saved me £750k in 2007/08. Many traders are watching this guy now.

Monday, January 19, 2015 11:49AM Report Comment
 

5. libertas said...

Britishblue, do you believe that Armstrong is right that the US Dollar peaks August 2015? I feel it has further to go. I am tempted to differ from Armstrong and state that this is the point where pegs start falling and divergence from the Euro becomes painfully clear, with European voters asking for the blood of those who allowed Europe to decouple from USA to the downside, at a point where Britain, Switzerland, Norway and other break out and rise with the rising US tide.

Monday, January 19, 2015 01:58PM Report Comment
 

6. cornishman said...

"pegs start falling..."

I see.

Monday, January 19, 2015 03:27PM Report Comment
 

7. britishblue said...

Libertas@4. Armstrong prides himself in forecasting events to very close timelines, so it may or may not. But I think the Exter's Golden Pyramid is starting to come into play, where people move from the most riskier assets to less riskier assets and the US dollar at the moment is deemed a lot less risky that some other investments and other currencies. I do wonder if the Eurozone and Japan start imploding whether the British pound will rise. Not because it is based on anything fundamental, just because it is less risky than some of the other major currencies and the Swiss franc and the dollar will already have been well inflated up.

Monday, January 19, 2015 05:33PM Report Comment
 

8. Crunchy said...

THE TROUBLE WITH PREDICTING IS THAT YOU HAVE TO BE ABLE TO SEE INTO THE FUTURE.

Rather a follow be! It's more profitable. (trade what you see, not what you think.)

Tuesday, January 20, 2015 10:02PM Report Comment
 

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