you know what?
Hey type-A, deep breaths!
The greatest insult is to be ignored...
to get to your question. i think M2 is ramping b/c everyone is cashing out of money mkt funds as they are forced to liquidate bonds from the debt downgrade and move USD's into regular bank accts. this is why you're seeing Bank of NY Mellon charging for holding deposits. because they can. so its misleading to say the Fed is pumping new money into the markets.
if you read my earlier posts in this thread, yes the USD can skyrocket from here if enough debt liquidation is forced thru defaults or margin calls raising the demand for cash to pay off these bad debts. you can look at this 2 ways; an overall decrease in the number of virtual plus real USD's floating around or as a scramble to grab the real USD's to pay off the bad virtual USD debts. either way the USD rises.
the $DXY is at the bottom of its consolidation channel. from here we should get a huge ramp. talk about a panic from that happening...
if you read my earlier posts in this thread, yes the USD can skyrocket from here if enough debt liquidation is forced thru defaults or margin calls raising the demand for cash to pay off these bad debts. you can look at this 2 ways; an overall decrease in the number of virtual plus real USD's floating around or as a scramble to grab the real USD's to pay off the bad virtual USD debts. either way the USD rises.
the $DXY is at the bottom of its consolidation channel. from here we should get a huge ramp. talk about a panic from that happening...
Great analysis. I don't think I can add anything to it.
What comes after the dollar hits a boost? It isn't worth it to have cash sitting around without a return. If there is a decent rate, what's being invested in to generate that return?
the return will be waiting to buy assets at the bottom of the Depression for pennies on the dollar. the wealth transfer at the end of the Depression of the 1930's was historic.