Performance of Several Key Currencies Since January 2007

This chart shows the comparative performance of several currencies in their dollar crosses since January 2007, or shortly before the most recent financial crisis took hold. For the US dollar itself we are using the DX index.



Gold did sell off hard in the market plunge in October of 2008 reaching an intraday low of $680, a buying opportunity of the first order. Many who said they were waiting to buy a dip never bought, because like most speculators they keep waiting for 'THE' bottom, and keep lowering their target buy price, and never really take a position. Then watch it run away from them, and wait for a pullback, but again never buy back in. Oh they will point to certain stocks that performed fabulously off the bottom, but they did not buy and hold them either, except in their fantasies and trash talk.

This is a flip side to those bulls who were long the tech bubble, and kept waiting for a higher price to sell their positions, just a few dollars more, and ended up taking a ride on a death spiral.

If you did not buy in then, what makes you think you can muster the conviction to buy on any other dip in a new major selloff? What makes you think the market will give you a second chance?

Gold never broke in the Crash of 1987, and offered quite a safe haven until Greenspan and the central banks started selling into it in 1988 to discourage the competition. Think they can do that again? With what?



And as for the theory about debt destruction making a currency more valuable, it could work, but don't hold your breath for the euro to strengthen as the sovereign debt of the PIGS starts swirling the bowl. And where they go, so will the UK and then the US go as well.

And before you complacently snicker at the problems in the eurozone, keep in mind that as a percent of GDP, the US debt is fast approaching the same level as Portugal, and climbing.