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  • Jonathan Poyer

All About the Benjamin's


Back to the mighty dollar...


The DXY got up to 107 today. Holy cow! Demand for the dollar increases with its price = Giffen Good. And what does that mean for places in South and Central America, Africa, Asia, etc. We are already seeing rioting, food shortages, energy chaos...and it is only July.


And on the same day, oil at a 12 week low around $99. Interesting times.


Check out some charts looking at DXY and the 10-year:


From 2000:


10-Year:


5-Year:

3-Year:


1-Year:

Some decoupling going on the past month or so...or just a blip?


And you know what, just for fun, let's throw Oil in there:


Do the past few days look like position washouts for commodities? That would make sense. Even in a recession, with demand crippled, we are looking at severe constraints in supply. Thus, we should not see commodities acting like they are unless there are some technical things going on. Things look very tight in those markets.


Consider one "little thing": Germany has entered a trade deficit for the first time in decades. Energy costs are up and Germany is EXTREMELY reliant on cheap energy that underpins a lot of their economic strength in manufacturing and exports.



Just the other day, a Russian court ordered the closing of a port exporting Black Sea Oil loadings for 30 days; the Caspian Pipeline Consortium. This port is a key facility for Kazakh crude oil. This is the equivalent of about 953K barrels/day.


Add this to Russia's demand for payment in Rubles and the threat of cutting off gas supplies. Screws are tightening across the globe. And the Dollar is right in the middle of it all.





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