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bailej03

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Next support level the 50SMA @ 95, chart enclosed.

 

Reasonable to make the case that the USD Index topped on March 3rd @ 100.3 after a long and strong upward move. The FOMC meet again this week, and should the April rate increase get pushed out to July or even later in the FOMC announcement, we should expect some real fireworks amongst the downtrodden ASX resource stocks as the Index falls through it's 2 month support level of 96.--IMHO.

 

Chart enclosed:

post-20731-1430020329_thumb.jpg

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  • 3 weeks later...

USD Index now at a 3 month low.

 

Outlook generally looks shaky following decades of low interest rates, why are markets not responding?---is it because what was supposed to be the magic solution does not look like working any time soon?

 

USD Index chart enclosed--which way now for the USD?

post-20731-1431600078_thumb.jpg

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Can anyone see any reason why the US dollar won't keep rising on a trade weighted basis? Sure it doesn't help US exports, but the only thing the country is really good at exporting are their dollars so it doesn't really matter.

 

(US trade weighted index data current to 1 July 2015 in chart below)

 

Eshmun

 

post-330300-1436234800_thumb.png

 

 

 

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eshmun

 

When you say that "they" are only good at exporting their currency are you sure you mean the US? Clearly Australia is stuffed on that front but the yanks still produce some much sought after materiel, as well as stuff like commercial jets and smart phone marketing and technology.

 

As for their currency ... I guess it's all relative and the greenback still looks to be the cleanest dirty shirt so I would think that that is what the bulk of any scared wealth will use as shelter. Very unsophisticated analysis I agree but it gets to the guts of the matter imo.

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Sure the yanks are smart, far too smart. When you have a balance of trade chart that looks like this over the past 65 years it really doesn't matter what you export. The net effect is US dollars flowing out and that's the trick as well. No one wants to see what they own devalued.

 

We should do OK in Australia as long as we invest in things that aren't too sensitive to $US denominated inputs. Our established lower cost Australian longer life resource projects will deliver for us. New projects will probably struggle unless they are very high quality. We will just need to get better at what we do best, but that's not a bad thing.

 

Eshmun

 

post-330300-1436264516_thumb.png

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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In the bloomberg article below, there is an interesting Graph of the shortage of apartments in the US.

 

The number of unoccupied apartments is at its lowest level since 1985.

 

 

This will have flow on effects eventually.

 

Firstly, as the article suggests, rents are going to increase.

 

Secondly, as yields become more attractive, construction of apartments will increase.

 

Thirdly, renters may see more attraction in becoming owner occupiers rather than renters.

 

 

 

Full article HERE

 

Mick

 

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I love a good conspiracy theory as much as the next bloke, but the one below is stretching the crdibility bounds just a tad too much.

 

THE CRUX

 

Hidden within H.R. Bill #2847, is a little-known provision known as ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Â¦ÃƒƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“FATCA.ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚ÂÂ

 

The first part of this law went into effect last year. The rest of it will roll out, piece by piece, through the end of 2018.

 

Few Americans have any clue about what this isÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâہ¡ÃƒÆ’‚ÂÂbut FATCA actually stands for the ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Â¦ÃƒƒÂ¢Ãƒ¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…âہ“Foreign Account Tax Compliance Act.ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚ÂÂ

 

Like many problematic pieces of legislation, this one sounds innocent enough.

 

But it has major repercussionsÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâہ¡ÃƒÆ’‚ÂÂwhich could expedite a worldwide flight from the U.S. dollar and ultimately result in billions in potential losses for U.S. citizens.

For one, this law means any institution that deals with U.S. dollars has to now comply with the IRSÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’â€Å¡Ãƒƒâہ¡ÃƒÆ’‚¦ which means many institutions could essentially stop dealing with U.S. dollars.

 

For another, this law makes it increasingly difficult, if not impossible, for the average American to get some of his money out of U.S. dollars, and into more stable currencies via foreign banks.

 

Already, weÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢ve seen two of the largest banks in the world, JP Morgan Chase and HSBC, set all sorts of new rules and regulations surrounding international wire transfers and how you can get your cash out of the bank. Many small banks have reportedly followed suit.

 

WeÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢ve heard several reports already of banks now refusing to accept American citizensÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢ deposits. And this trend is likely to accelerate rapidly in the months to come.

 

Some people in Canada have been affected by this legislation in that the IRS demands that citizens of other countries who were born in the US need to file IRS returns and pay tax.

(see this article HERE )

 

 

its one thing to demand it, its another thing to get it.

Similarly for banks external to the US to be forced to comply with US laws.

The FED would never allow the IRS to stop anyone sending money abroad or bringing ot to the US.

Trade would just clog up.

Mick

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