As the US Dollar dips, the Australian Dollar strengthens. The strongest dollar strengthening occurs in the case of a stable dollar. However, the dollar is weak and rising as the US economy weakens.
The strengthening of the US Dollar Strength has occurred across most markets because of weakness in the USD, and that is shown by the price of commodities being higher than ever before. That support is showing an upward trend, but don’t be surprised if the Dow falls back below 18000.
The Dollar is strong and in a free fall as the US economy weakens. This is even before a new President is elected. In many markets the dollar has strengthened in the past few days due to a stronger dollar.
As the dollar strength continues, I believe we are going to see more buying from the buyers. This is for two reasons, one is that when the dollar strengthens it will mean that other currencies are also strengthening and will be ready to buy back their own dollars.
Second is that as the dollar rises the risks to our currency moves lower, but so does the risk to our debt. Our market will not fall into depression when we do not have our currency fall as far as it should. I believe the fundamentals favor the strengthening of the dollar in the future.
The weak dollar tells me that our market is going to stay strong. Of course the stronger dollar comes with a lot of risks. With this stronger dollar comes higher interest rates, but that is not as bad as it could be.
With a stronger dollar there will be less US demand and of course this will cause a free-fall in our market. It could be that the US dollar remains weak for some time to come and doesn’t rise much further. When it rises then we will be in a major bubble and this will lead to the collapse of the US economy.
In order to get out of the bubble, the US government must start printing money, to pay for all the debt that has been incurred in the last two years. If the US government prints too much money, the value of the US dollar will fall. Also, you will want to get out of the stock market now, as well as the real estate market and the commodities market.
Once the US government starts printing again, the strength of the dollar will be diminished and once it reaches a low risk to strengthen, then we will again go back up. It is not so much the value of the dollar that is important, but the psychology of the dollar. If the dollar strengthens, I believe that we will benefit.
As the dollar strengthens the strong dollar can allow the dollar to rise on its own, thus it is a win-win situation for the currency. I see the currency as still a bubble, but there are two ways to use the currency, so I believe we are still in a bubble.
We are likely to see the strong dollar also lead to a fall in other currencies as they want to get out of the dollar in order to protect their market. This means we will have a free fall in our market as we did before.
We will look back and see that the market started off strong because of the weak economy in the current economy. There will be another economic decline, or at least we will see a stronger dollar when the current economy makes a slow recovery. If we get a weak economy we can look forward to more weak dollar, weak economy and a strong dollar.