The dollar is making new lows.
As I’ve been saying all week(s) that is the story that is driving the market. Still people interview me and ask me how high I think the markets can go which is kind of silly because, as I keep trying to explain, the markets aren’t going anywhere, the only variable is the currency they are priced in. Why do people not get this? Why do other financial writers not get this? Why do TA guys not get this? Why does nobody talk about this in the MSM?
Sure they talk about the weak Dollar or the strong Yen (but rarely the strong Pound or Euro, because it is contrary to the average viewer’s vision of America and we don’t want to upset the viewers, do we?) but who ever shows you a simple and obvious chart of the S&P or any other index priced in a foreign currency? How hard is this to understand?
So, if you are a Japanese investor, watching your US equities, THIS is how they are performing. It’s not much different from an EU perspective, where we FAILED the 200 DMA on 9/21 and the 50 DMA made a death cross last week. Yet I still see chart guys running out on CNBC telling us their TA tells them we can go to the moon. Sure, we can go to the moon. Price your stocks in Hungarian Forints and suddenly the S&P is at 240,000 – all we have to do is ignore the fact that the currency has changed – JUST LIKE WE DO WITH THE DOLLAR – and we are rich, Rich, RICH!
Yes, that would be ridiculous. Almost as ridiculous as a bunch of grown men, who make a living analyzing the markets, acting as if the underlying value of the currency we are pricing things in doesn’t matter. Do you know what the World’s hottest market was in 2007? Zimbabwe! That sucker would gain 500-1000% in a single day – invest over there and you made money hand over fist. Howard Stern had a game called “Who Wants to be a Turkish Millionaire” and ho would give away a Million Turkish Lira and the joke was how excited the contestants were and how much they would be willing to humiliate themselves for what they did not realize was about $6.
That’s the con that is being played on American…
