US Dollar Index Long Term Decline
Clearly it doesn’t take a genius long to figure out which way the US Dollar has been headed for the past year. The sad fact is that if the US Dollar Index chart were for a longer time frame and showed the history of the Dollar for several more recent years it would only be more of the same.
Many analysis consider the 80.00 level on the long term chart as the critical level. A close below 80.00 would signal an acceleration of the trend. That close has just occurred.
There are definite signs that the rest of the world is getting tired of absorbing surplus US Dollars. As a fiat currency there is no sound backing for the tremendous number of Dollars now being printed by the US government.
China has hinted that they may not be so eager to keep purchasing US Treasury Bills and Notes. Russia is shifting out of Dollars into a more balanced foreign exchange portfolio. A Japanese oil company has started to pay for oil imports in Yen, not Dollars. The Iranians now want Euros for its oil, not US Dollars.
The list is growing. And why not? No one or no nation wants to keep absorbing at their risk an asset like the Dollar that is headed South.
Watch out for the acceleration of the downtrend. That will destabilize world financial markets and possibility drive the world economies into deep recession or worse.
See this chart and many others such as the S&P 500 and the CRB Index at Ino.com
