{"id":9553,"date":"2010-05-18T14:52:09","date_gmt":"2010-05-18T18:52:09","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=9553"},"modified":"2010-05-18T14:52:09","modified_gmt":"2010-05-18T18:52:09","slug":"why-the-u-s-dollar-is-a-heat-seeking-missile","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2010\/05\/18\/why-the-u-s-dollar-is-a-heat-seeking-missile\/","title":{"rendered":"Why The U.S. Dollar Is a Heat-Seeking Missile"},"content":{"rendered":"

Why The U.S. Dollar Is a Heat-Seeking Missile<\/span><\/a><\/p>\n

By Justice Litle, Editorial Director, Taipan Publishing Group <\/span><\/p>\n

As the U.S. dollar rises sharply in tandem with gold, the odds of another global financial crisis go up. Editorial Director, Justice Litle discusses why… <\/em><\/strong><\/p>\n

It\u2019s a funny thing about crisis \u2013 you can never be sure what the next catalyst will be. The really bad trouble always seems to spring from a place no one was looking.<\/p>\n

This is a big reason why so many investors are caught off guard. They check the obvious places, but forget to check the odd places. (Or else they shrug and dismiss the possibility of crisis entirely.)<\/p>\n

What\u2019s worse, our global financial system is even more prone to crisis now because everything is so connected. When one financial system sneezes, another catches cold\u2026 or pneumonia\u2026 or worse.<\/p>\n

As you well know by now, the eurozone is engulfed in systemic crisis. But did you know that a crashing euro has the potential to unleash a fresh new round of fiscal avalanches all around the world \u2013 even in countries that have no exposure to the euro at all?<\/p>\n

The reason why has to do with the U.S. dollar. The surging <\/em>U.S. dollar.<\/p>\n

\"UUP<\/p>\n

Dark Riders<\/h3>\n

On Friday we talked about how gold has gone parabolic<\/a>. As the chart above shows, the U.S. dollar is going parabolic right along with it.<\/p>\n

When gold and the dollar rocket higher at the same time, that\u2019s a very bad sign. When the two get together like this, they are dark riders of deep fear and concern.<\/p>\n

The dollar-gold parabolic pairing is rare. It happens as a function of last-ditch safe haven buying. When things get really bad, many investors want to seek shelter in gold, the last \u201cneutral currency\u201d\u2026 and the rest want to pile into U.S. Treasuries.<\/p>\n

Right now we can say the U.S. dollar<\/a> is rising for at least three reasons:<\/p>\n