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The no-brainer historical trade of the year


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#1 diogenes227

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Posted 02 January 2018 - 02:14 PM

They say he who does not know history is "doomed" to repeat it.  Maybe that's true with most things, but definitely not the financial markets - in the market he who knows history is "blessed" to repeat it. 

 

Here is what I wrote at the beginning of this year in this link:

 

THE DOLLAR - HISTORICALLY SPEAKING

 

 

Historically speaking, the US dollar goes to hell under Republican administrations.  Does anyone actually expect it to be any different this time?

 

May take a while since Janet Yellen’s term has year or so to go and apparently the Federal Reserve is now determined to hike interest rates. But eventually, the businessmen now running government (who of course are totally unaware that the government is not a business) will want to debase the currency.

 

There is the belief that a weaker dollar enables American companies to more easily compete against competitors around the world.  Maybe so. But every time I look up while the dollar is down, it is the competitors buying US companies instead of buying their products.

Oh, well, this Bud’s for you.

 

And here is the updated chart:

 

 

P.S. Read not long ago that history was the second worst major a college student can undertake In today's world (English is the worst).  That those two particularly are considered the worst (when they probably should be the best) pretty much explains and says all we need to know about the White House babbler and the bitcoin tulips.


"If you've heard this story before, don't stop me because I'd like to hear it again," Groucho Marx (on market history?).

“I've learned in options trading simple is best and the obvious is often the most elusive to recognize.”

 

"The god of trading rewards persistence, experience and discipline, and absolutely nothing else."


#2 da_cheif

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Posted 02 January 2018 - 03:22 PM

white house babbler?     lets keep it out of politics eh?



#3 fib_1618

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Posted 02 January 2018 - 05:10 PM

 

(who of course are totally unaware that the government is not a business)

 

Absolutely disagree.

 

You have an executive (makes decisions), legislative (makes rules) and judicial (enforce rules)...these are the core elements of every single business out there or you die.

 

Fib


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#4 SemiBizz

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Posted 02 January 2018 - 05:19 PM

Yes, please knock off the political digs...

 

Take it to FaceBook

 

This is a professional environment, knock it off.


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#5 kssmibotm

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Posted 02 January 2018 - 05:28 PM

Nice chart, but you only cover the last 4 administrations.  A set of 4 data points is hardly statistically significant, and I am being generous because the Trump administration still has 3 more years to go at a minimum.  So technically, you only have 3 data points.  I can flip a coin 3 times and get heads.  That does not mean I will get heads the next time.  Can you show more history to support this theory?


Edited by kssmibotm, 02 January 2018 - 05:29 PM.


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#6 NAV

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Posted 02 January 2018 - 11:33 PM

Yes, please knock off the political digs...

 

Take it to FaceBook

 

This is a professional environment, knock it off.

 

Or the "Insanity and unhealthy club" on traders-talk tongue.png


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#7 diogenes227

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Posted 03 January 2018 - 12:54 AM

Nice chart, but you only cover the last 4 administrations.  A set of 4 data points is hardly statistically significant, and I am being generous because the Trump administration still has 3 more years to go at a minimum.  So technically, you only have 3 data points.  I can flip a coin 3 times and get heads.  That does not mean I will get heads the next time.  Can you show more history to support this theory?

 

Wow, politics?  What politics?  I'm surprised no one here is familiar with the White House babbler pattern in technical analysis.  Didn't anyone day trade during the Bush administration?

 

As for more historical data points on the dollar (which is real subject of this thread), I was being generous with just these in this tidy chart - the undeniably greatest dollar killer of our time was that guy back in the 1980s.  And wouldn't you know it...he not only fits the current pattern to a tee, he is the grand-daddy of the entire dollar slide, maybe even the end of the entire American era.

 

As for Trump, or any Republican, having three more years at the minimum, the point of this post is my fearless forecast that the dollar will be going relentlessly lower.  I could be wrong but I've been comfortable all this year and am now with having  history on my side.

 

 

As for government being believed to be a business that is maybe the greatest mistake any nation can make (getting involved in a land war in Russia or Asia may be bigger but that's is another story). The role of government is to support the civic realm, from defense to infrastructure to economic stimulus to the welfare of all of its citizens.  There are some businesses that do that also to some degree (some would say those were once prominent and are now mostly dying on Main Street) but the role of the vast majority of businesses and virtually all corporations is to make money, profits no matter what.  Governments get into trouble when the business interests dominate to such an extent everyone fails to understand and accept government is a non-profit  service institution.and should be judged and held accountable for how well it renders its service, not on any notion of making money for itself or any select group of constituents.  But, of course, this country like many others through time has had eras of business dominance over government before - notably the Gilded Age, the 1920s ("America's business is business,"), and possibly now.  Any student of history knows how, sooner or later, this story ends.


"If you've heard this story before, don't stop me because I'd like to hear it again," Groucho Marx (on market history?).

“I've learned in options trading simple is best and the obvious is often the most elusive to recognize.”

 

"The god of trading rewards persistence, experience and discipline, and absolutely nothing else."


#8 da_cheif

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Posted 03 January 2018 - 05:41 AM

a deflationary depression sees the dollar get stronger eh?      the opposite is true during an inflationary economic boom  ....clapping.gif



#9 kssmibotm

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Posted 03 January 2018 - 08:02 AM

If I am reading the dates correctly, the dollar was down during the Carter years, and it had it's best ever rally during Reagan's first term in office.  Yes, Reagan's second term was the "greatest dollar killer of our time", but we all now that Reagan was not running the show then.  It was Nancy and her astrologer, and I am not sure of the astrologer's party affiliation. devil.gif   The fact is, this dollar vs presidential party relationship is a relatively recent phenomenon and there is simply not enough data to suggest that it is anything more than a coincidence.



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#10 Data

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Posted 03 January 2018 - 11:53 AM

The amount of federal debt issued shrank dramatically during 2015-2017.    It's only about 350-400 billion dollars per year which is close to the level issued by Japan and the EU.   Some were expecting 500-800 billion dollars issuance in Q4 which never materialized, partly due to the low cash balance carried by the Treasury as compared to the Obama administration.  Unless the forecasts of 880 billion dollar deficit is realized, they will be far off again.