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“Panic about U.S. Dollar”: Echoes of 2008

Here in 2020, financial advisors are extremely negative on the greenback… again

by Bob Stokes
Updated: August 20, 2020

From July 2001 to March 2008, the U.S. Dollar Index lost 42% of its value. It was a bad time for the buck.

Sentiment toward the greenback grew so negative that in December 2007, a famous fashion model demanded to be paid in any other currency except the U.S. dollar.

That same month, The Economist featured this cover:

Dollarpanic

Around that time the German magazine Der Spiegel ran a similar cover.

Our March 2008 Elliott Wave Financial Forecast provided subscribers with this update on the extremely negative sentiment toward the greenback -- and what it likely signified:

The dollar broke through the November 23 low at 74.48 on Wednesday... A sentiment extreme suggests that a more permanent low is fast approaching... In recent weeks, New York City shops started to accept euros and other foreign currency as payment for their wares. While shops in U.S. border towns have long accepted Canadian dollars and pesos, Reuters says, "The acceptance of foreign money in Manhattan was unheard of until recently.

Well, that low in the U.S. dollar indeed arrived just two weeks later. The greenback went on to rally about 24% into November 2008.

What does all this have to do with the dollar in the summer of 2020?

Take a look at this chart and brief commentary from our August 2020 Elliott Wave Theorist:

PessimismTowardDollar

[The figure] shows that advisors are approaching previous extremes of dollar pessimism.

The only market on which investors are bearish is the U.S. dollar. When people start throwing their "investments" overboard, they will start grabbing dollars as if their lives depended on it.

If you remember the 2007-2009 financial collapse, you remember the one thing almost no one had: cash. The term "liquidity crunch must ring a bell.

That's because in a deflationary economic contraction, credit is hard to get -- and "cash is king.

Learn what our flagship investor package has to say about any such prospects and the U.S. dollar's next move. Your portfolio may thank you later.

Follow the link below to get started with a 30-day, risk-free trial and instant access to our latest insights.

"Approaching A Paradigm Shift”

The quote above is in the August Elliott Wave Theorist -- and when you read it, you'll know exactly why Robert Prechter chose those words.

His discussion of this "shift" includes key points about key financial markets.

Indeed, following commentary on gold, stocks and rates, Prechter writes:

There is one key impetus behind all these markets.

Learn about that "impetus" and get all the valuable insights that the latest Theorist offers so you'll be in a position to prepare for what's next.

Follow the link below to get started with our 30-day, risk-free trial.

EXCLUSIVE

German Stocks: “… on the brink of a very dramatic decline”

The strong recent decline in Germany's DAX has many investors worried -- after all, the DAX is Europe's equivalent of the DJIA. Now see how a simple Elliott wave price formation guideline -- first discovered by R.N. Elliott almost 100 years ago -- warned of the DAX's bearish opportunity as early as October 14. Our European Short Term Update editor explains.

What We See in the Stock Market

On Friday October 23rd, The Short Term Update noted the recent "lower lows and lower highs" - and told subscribers to keep an eye on 28,040 in the Dow, saying a break could come "very early next week." See the chart and forecast for yourself.

What This Survey Reveals About Investor Sentiment

Many retail and professional investors remain bullish on the stock market -- even after a multi-month rally. Get insights into a recent investor survey -- plus, see a chart which shows how the current optimism matches up with similar levels of optimism in the past.