The Road Ahead

With the Federal Reserve printing 25/8, the U.S. Dollar should be weakening in 2009…but weaken against what? Other printing presses around the world?

I think the focus in 2009 will be U.S. Dollar vs. hard assets such as Oil, Gold and Silver. I would also not be surprise to see the Dollar and hard assets to rise in the medium term because U.S. Dollar remains to be the world’s reserve currency (”safety”) and unemployment is still on the rise around the world. However, once the dust settles, printing presses around the world will lead to massive inflation.

Below is a weekly chart of the U.S. Dollar. Look for the dollar to retest the 200 dmv in the coming weeks.