The following three charts will assist with your trading strategies going forward.

Regards - VHF

CHART 1: This chart shows that the USD has been in the same downward channel for the past 2-3 years but has recently sat on the lower rail. A break below this level will introduce a new bearish channel and no doubt hasten the demise of the reserve currency. Thus we can understand the recent fanatical defense (manipulation) of this lower boundary, at least until the March 18 FED meeting when interest rates are expected to be slashed again 0.50 to 0.75 bps.

CHART 2: From our SA friends, with the USD falling down a precipice, spare a thought for non-U.S. investors invested in U.S. stocks and bonds. The graph below shows the performance of the S&P 500 index since the beginning of 2007 in both USD terms (red line) and euro terms (blue line). Whereas U.S. investors are showing a very poor return of -8.03% for the period, euro investors are completely under water to the tune of -21.02%. For the year to date the figures are -11.78% (US dollar) and -15.50% (euro). (Although I am using the euro in this example, the same logic applies to most other non-U.S. dollar currencies.) Therefore, with these dismal returns, the odds are slim that foreign investors will be adding to their U.S. equity holdings any time soon.

CHART 3: Again from our SA friends, this graph illustrates the same principle for bonds by comparing the performance of U.S. 10-year Treasury Notes in US dollar terms (red line) with the same bonds from the viewpoint of a European investor (blue line). Whereas U.S. investors have every reason to be relatively pleased with a return of +10.28%, euro investors are in the red by -5.28%. For the year to date the figures are +4.98% (US dollar) and +0.55% (euro). Again, with such poor returns, it is unlikely that foreign investors will waste their time purchasing U.S. bonds, unlike what is continually mentioned in the daily media spin.