FireWalker: Morgan Stanley article says USD starting to show signs of asset based currency This article from Business Insider quotes an article from Morgan Stanley. Down in the third paragraph it says that the USD is starting to show signs of an asset backed currency: http://www.businessinsider.com/morgan-stanley-on-us-dollar-2013-3
Mtnman: Something else the article means, Firewalker, is at the bottom the negative correlation has almost completely disappeared. . I have noticed that the currency parings have been changing in the past few weeks so that there is very little difference between them. Ex. The dollar has remained around 81-83 cents, but the pound and euro have lowered (GBP from 1.60 to 1.41 and Euro from 1.40 to 1.30) and the Australian and New Zealand dollar have risen a little. Point is that many (most) of the currencies are positioning themselves to be on a more level playing field. I think it's all a set up for the reset. Well, at least I HOPE so.
Mr&mrsb: While the market has focused on how the change in global monetary policy is impacting the JPY and GBP, we would also suggest that the USD is undergoing a significant change in behavior as a result of global monetary policy shifts.Equity markets globally rallied strongly, with US equity markets leading the way, allowing the Dow to reach record new highs. This outperformance of US asset markets is a positive for the USD in the current environment, in our view.
In fact the USD has become increasingly positively correlated to the performance of the equity market. This suggests that the USD is not being used as a funding currency to the same degree as previously, and is starting to display some of the characteristics of an asset currency. This is consistent with the view that Fed policy stimulus is driving US asset markets, rather than broader risk appetite.
This is a big deal the smoking gun in my opinion JP Morgan chase is one of the most powerful banks in the world and they can see the changes that are coming in the currency's around the world also they recognize the cause and affect and what Basil three will do to the USD