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PowerShares DB US Dollar Bullish ETF Message Board

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  • cycloney2001 cycloney2001 Nov 1, 2009 10:18 AM Flag

    Fed Will Not Raise Rates


    What a load of crap!

    You go ahead and long the dollar based on this incorrect information.

    Don't you realize that M1 is constantly being adjusted based on the monetary base X the velocity of money?

    The fact that M1 has been only slightly increasing or decreasing in the last 6 months is not because anyone is stopping the M1 windpipe, it is because the velocity has "temporarily" dropped.

    Now the last M1 figure released has jumped 10 points in 2 weeks.

    This is without Velocity increasing at all!

    Velocity is down because of fear. Fear cannot last forever. Fear is artificial.

    On the other hand, the monetary base has been doubled since Sept 2008.

    Now einstein you tell me, if the M1 is increasing (10 points!)without velocity, what if going to happen to M1 after velocity (spending) resumes?

    M1 is most certainly going to double very quickly.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • What happens when the duration of artificial fear is outpaced by depth?

    • Dude, ever heard of unemployment at 20%??? Doesn't that warrant your theory on velocity? Where would it come from when consumer is not even able to feed themselves?

      Fear or no fear, there will NOT be any velocity for many many years to come.

      Today's interest rates call will be interesting. I am betting they will jack up or at least change their wordings. Why? Republicans won 2 seats even after president himself parading for democrats. That is a big blow and i guess reality is sinking in that public can control the destiny after all. :-)


      • 2 Replies to i_am_trading_now
      • No,

        You don't seem to understand. When prices are constantly increasing, that means the price of groceries goes up each day you wait. Therefore, people must spend their money as soon as possible. This is what will increase the velocity.

        Likewise, the only reason the velocity is down, is because prices are falling. People can hold on to cash as long as possible. The longer they hold, the cheaper items get.

        As soon as inflation arrives, velocity must increase, or people will lose their purchasing power.

      • I agree that last nights elections are a big blow and is evidence people are sick of the out of control spending in Washington and are turning to the Republicans...but words won't spark a rally in the dollar, only actions. Again, actions speak louder than words.

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