US Dollar Index Very Long Term Chart - A Rake's Progress

Here is an end of year update on the very long term US dollar chart, la douleur du monde.

As a reminder, this is a chart based on the DX dollar index.

That index is woefully out of date with the progress of the world economy and the currency wars with their competitive devaluations and rising currencies of the developing nations.

The DX Index is far too heavily weighted to Europe and Japan, and does not include any of the BRICs.

What it has to its merit is a history of pricing points, that were more meaningful in the past.

A Rake's Progress is a series of eight paintings by William Hogarth that show the decline and fall of Tom Rakewell, the spendthrift son and heir of a rich merchant, who comes to London, wastes all his money on luxurious living, prostitution and gambling, and as a consequence is imprisoned in the Fleet Prison and ultimately Bethlem Hospital, or Bedlam.

Below is painting number six, in which young Tom begs for help from the almighty after a losing night of gambling.

One of my favorite pied-à-terres in London for short layovers many years ago was the Hogarth Hotel off Earl's Court Station on the Piccadilly Line, a serviceable route to and from Heathrow. The area was at one time called Aussie Alley because of the tendency of Australians to cluster there for some reason.

For longer term stays there was a favorite hotel in Mayfair, which was closer to the book stores and my bank, and a small residence in Hampstead Heath which was convenient to almost nothing, but pleasant in the summer. This was my favorite time of the year in London for long walks, the theatre of course, and Christmas shopping in Knightsbridge.

As Samuel Johnson observed, "You find no man, at all intellectual, who is willing to leave London. No, Sir, when a man is tired of London, he is tired of life; for there is in London all that life can afford." And I think the emphasis is well-placed on 'afford.' New York is extravagant, Paris is comfortable, Rome is expansive, but London is civilized.

This is not to be confused with The City, of course, which is a bastion of vipers and thieves. lol.

Chris Hedges At The Sanctuary for Independent Media in Troy, NY

Overall this is one of Hedges' better presentations. I had not seen it in its entirety before and was pleasantly surprised.

We are going to learn quite a bit about America over the next eighteen months. This talk gives us a framework in which to place certain events.

Gold Daily And Silver Weekly Charts - FOMC and 12-12-12

The Fed did the completely expected today, pledging to continue to expand its balance sheet in buying sovereign and mortgage debt at the pace of $85 billion per month until unemployment drops below 6.5% and/or inflation rises above 2.5%.

Considering that both measures are tacitly rigged and phony, that pretty much means that Benny will print until the exhaustion and collapse of the dollar, or until it suits their interests not to do it. 

The only surprise in Benjy's press conference was that he grew up in rural South Carolina and goes back for visits. I didn't see that one coming.

The money shot today was when the male spokesmodel on Bloomberg said 'and gold is up only five dollars after that Fed announcement.' All that capping just to try and make the impression that QE until hell freezes over isn't inflationary? I hope it was worth it.

Stocks pulled back from the necklines on their inverse head and shoulders, and gold and silver rallied back, but the pop higher was pale in context because of the pounding the metals had taken for the past week. There were no big drops, but lots of cheap shots and quick hits.   

So what next. It's all fiscal cliff now, all the time, until the end of the year. Or the real Mayan calendar end date, which is not 12-12-12 like so many think. It is 21 December 2012, which is also the last date by which legislation can be submitted to the US Congress for consideration this year.  So if you are planning on the end the world, its time to RSVP.

I really cannot say what these fiscal cliff jokers are going to do, but I do know that Obama has the whip hand, even if it was ten years in the making, and after the previous twenty times that the Republicans used and abused his good will gestures in negotiating against himself, he is likely to let it ride.

The cliff is phony anyway, although I am sure it will be used as a looting opportunity on Wall Street.

Once the cliff passes, 70% of the deficit evaporates.   Horrors!  And they have plenty of time to tweak it in the new Congress so the effects are very unlikely to be lasting.

I am almost positive the US is heading into a recession next year anyway, the policy decisions are so cockeyed against the median wage earner and consumer.  They might try and hide it by throwing money at it, and there lies stagflation, even if they hide the inflationary part.

El Cliffo Fiscal gives the Republicans political cover, because now the tax cuts expire and they cannot be blamed for raising taxes. So Grover and his bully boys cannot be madder than usual that they are not warlords in Somalia rather than citizens in a Republic. And then the Republicans can cut a deal and lower taxes somewhat and look like heroes.

I don't have a lot of confidence (lot = greater than zero) in Obama and the Dems making a decent deal for the American people.   The Republicans are whores for the monied interests and are as bad or worse.  I think it was Gore Vidal who said that the Dems and GOP are just two different wings of the Big Money Party, and that sounds about right.

So let's see what happens.

In the short term, the short side of a hedged stock/bullion pair seems like the thing to do.