USDCAD – It’s Going Down (July 21, 2017)

I’m yelling timmbbbbeeerrrrrrr!

Check out the US Dollar Index:

Right now, I’m so glad I got into the world of crappy junior mining stocks and swapped into lots of CAD back in late 2015/early 2016.

Ditto for the AUD.

Sure, the USD looks oversold in the short-term (I’m expecting a bounce back up shortly), but this longer-term reversal was due to happen at some point. I’ll never forget when I visited Vancouver back in 2010 and the lady at the restaurant wouldn’t give me back change for my USD saying that because CAD was basically at parity, it was almost the same thing so they might as well book the small sliver of delta for themselves… Ok, yeah, when you’re trading at USDCAD of say 1.03, it sucks but if I had to I could let it slide… With that datapoint fresh in mind, when I saw USDCAD had risen to 1.30+ back in late 2015/early 2016, I said no kidding, maybe I should load up on some CAD…

I like to buy low and that looked pretty damn low

~30% weaker than what I had remembered…

So yeah, these fiat currencies are all freekin insane, and they all take turns going up and down relative to each other.

It’s very tough looking at the macro picture b/c in the heat of the moment when the USD looks like it’s the lone star, ain’t nobody gonna wanna be swapping out of strength and into weakness… USD is up ~30% relative to CAD? Big freekin deal, I’m sure it’ll be up 60% this time next year… and then 200% shortly thereafter… so on and so on… King dollar, baby!

And let’s not even mention the barbarous relic gold which is a useless rock that generates no yield whatsoever…

 

You either believe in macro trends and cycles, or you don’t.

 

It’s that simple.

 

Fight On!

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About MacroTrends and Cycles, here’s a very interesting 30 000 feet article about the one on Electric Vehicles . . . http://www.rationaloptimist.com/blog/electric-cars/ How the electric car revolution could backfire. The state risks locking in the wrong technology too early My recent column for The Times on the arithmetic behind electric cars: The British government is under pressure to follow France and Volvo in promising to set a date by which to ban diesel and petrol engines in cars and replace them with electric motors. It should resist the temptation, not because the ambition is wrong but because coercion could backfire.… Read more »

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