If the mainstream financial experts had been right about the dollar back in November 2010, the currency would be singing the blues with Elvis right now in that great, pearly-gated Graceland in the sky.
See, in the final two months of 2010, the Federal Reserve launched its second round of quantitative easing, dubbed QE2. And, as far as the conventional pundits could tell, the US currency was "QE-ad on arrival." Here, the following news items from the time capture the widespread belief in the dollar's impending "death-by-bailout":
- "Fed Actions Sink The Dollar" (International Business Times)
- "Dollar plunges to 15-year low against the Yen. The dollar keeps falling around the world... because investors expect the Federal Reserve to pump more money into the economy to try to stimulate growth." (Associated Press)
- "Dollar falls to 10-month low against euro. The fact is that the Fed prints money and monetizing the debt does debase the currency." (Bloomberg)
As it turns out, the greenback is quite alive and well. Since QE2's debut on November 4, the dollar enjoyed a powerful rally to four-month highs (before turning down) -- all the while staying above its November 2010 low.
In the end, while the usual suspects continue to wait for the buck to digest its $600 billion bitter bill and keel right over, one fact remains clear: The dollar's dominant trend since the QE2 start in November 2010 has been UP. And EWI was well in front of the turn.
Here in the November 2010 Elliott Wave Financial Forecast (published on November 5), our analysts prepared subscribers for a strong dollar surge via this timely insight:
"When the belief in a trend is so pervasive that it is clear to all that it must continue, it is almost always near the point of exhaustion and reversal. If there is a policy that was ever more widely held to be ruinous for the US dollar than the Fed's latest round of QE, we don't know what it is. This belief is so obvious that it must be wrong. The dollar's decline has coincided with a drop in optimism to a nearly non existent 3% (Daily Sentiment Index). With so many positioned for a dollar drubbing, the dollar may move fast in the opposite direction... Major Rally Straight Ahead."