It has been a long time since I have had the pleasure of mentioning that the US Dollar has now broken out higher into what may become an uptrend. Note in the daily chart (left side) that the US Dollar Index futures have broken out above the Upper Bollinger Band.Not to dampen the bullish spirit, but one of my favorite financial commentators, Michael Pento, wrote a great article last night on why the Fed is talking up the Dollar and speaking about inflation concerns, but is very unlikely to follow up the talk with interest rate hikes, despite their implied threats to do so. If he is correct, the Dollar correction could be short-lived, and the Fed's credibility may be even further damaged. Read his opinion here:
A Conflict That Bodes Ill for the Dollar
In another very fascinating article today on inflation, the Dollar, and the Fed, Joseph Brusuelas, Chief Economist for Merk Mutual Funds (specializing in currencies), also contends that the Fed is almost certainly bluffing, and that the Dollar and the American people will be the victims of that bluff, as inflation becomes more and more unhinged. Very interesting!
The Hawkish Illusion: Calling Bernanke's Bluff
