Is the PP a bet against the USD?

[glennds]

I swear I saw a comment some time ago from one of the PP veterans saying something to the effect that the PP is a bet against the US Dollar. I didn't give it much thought at the time, but lately the PP has been in the doldrums but the USD has been rallying, at least relative to other currencies, and certainly against gold. So maybe there is something to the comment.

I sort of get it that in an inflationary environment, the value of dollars are dropping, and presumably gold is rallying. So are we experiencing the symptoms of a deflationary environment at present insofar as gold is dropping, and dollars are increasing in value? Maybe I'm connecting apples and oranges.

Not long ago many people, myself included, thought that the dollar's value would disintegrate as a by-product of quantitative easing. I remember Kshartle who was loading up on gold stocks and miners for this very reason. But exactly the opposite seems to have happened, at least thus far.

I'm just trying to figure out whether there is any merit to the idea that the PP performs inversely to the USD. Maybe one of the charting experts could chart the historical movement of the USD against the PP?

Any insightful feedback would be appreciated.

Thanks

[Tyler]

From my perspective, gold is insurance against the dollar.  But the PP is not a bet against the dollar any more than it's a bet against gold or stocks or bonds.  If it bets against anything, it's the common belief that economic swings can be predicted and preemptively acted upon for profit. 

[mathjak107]

it does appear that the last decade or so where goes gold ,goes the pp.  its volatility has far exceeded the other assets .

[dutchtraffic]

it does appear that the last decade or so where goes gold ,goes the pp.  its volatility has far exceeded the other assets .

Do you feel lucky....?

[mathjak107]

you may as well not bother posting that chart as the accountring standards have changed drastically making old to new comparisons not applicable.


as jeremy siegel points out you can't compare to earlier years because:

Changes in the accounting standards in the 1990s forced companies to charge large write-offs when assets they hold fall in price, but when assets rise in price they do not boost earnings unless the asset is sold. This change in earnings patterns is evident when comparing the cyclical behaviour of Standard and Poor’s earnings series with the after-tax profit series published in the National Income and Product Accounts (NIPA).

For the 2001-02 and 2007-09 recessions, S&P reported earnings dropped precipitously due to a few companies with huge write-offs, while NIPA earnings were more stable. Yet before 2000, the cyclical behaviour of the two series was similar. Downward biased S&P earnings send average 10-year earnings down and bias the Cape ratio upward. In fact, when NIPA profits are substituted for S&P reported earnings in the Cape model, the current market shows no overvaluation.

the markets are at value today and even a bit below if interest rates are figured in the  equation.

sorry but that chart is  a bust and useless.

[dutchtraffic]

you may as well not bother posting that chart as the accountring standards have changed drastically making old to new comparisons not applicable.


as jeremy siegel points out you can't compare to earlier years because:

Changes in the accounting standards in the 1990s forced companies to charge large write-offs when assets they hold fall in price, but when assets rise in price they do not boost earnings unless the asset is sold. This change in earnings patterns is evident when comparing the cyclical behaviour of Standard and Poor’s earnings series with the after-tax profit series published in the National Income and Product Accounts (NIPA).

For the 2001-02 and 2007-09 recessions, S&P reported earnings dropped precipitously due to a few companies with huge write-offs, while NIPA earnings were more stable. Yet before 2000, the cyclical behaviour of the two series was similar. Downward biased S&P earnings send average 10-year earnings down and bias the Cape ratio upward. In fact, when NIPA profits are substituted for S&P reported earnings in the Cape model, the current market shows no overvaluation.

the markets are at value today and even a bit below if interest rates are figured in the  equation.

sorry but that chart is  a bust and useless.

If you buy into this you are insane, sorry.

Jeremy siegel, the ultimate perma-bull:

[LC475]

If it is a bet against the US dollar, it seems a strange way to bet against the US dollar.  That is, by using 25% of your wealth to buy US dollars.  That is not the normal way investors/speculators make bets against things.  If you want to bet against something, you do not put 25% of your assets into that something.  That would be what you do not do.  Other things you would not do:

* Put another 25% into, not just the US dollar, but very long-term fixed obligations denominated in US dollars.  That is, essentially, making not just a bet but a leveraged bet on the US dollar's long-term future.

* Put another 25% into securities denominated in the US dollar, of companies in the home of the US dollar, companies which operate using the US dollar and are relatively dependent on the US dollar's continued stability for success.

Just a thought.

[mathjak107]

nothing changes , do your research , the  accounting rules are changed . your chart is useless  , you  keep disputing what i post but you fail and fail at disproving a thing and go off each time on some tangent .  these are facts not what you think in your head .
you can't start off measuring with one yardstick and change the graduation marks and  continue on.

this has been an on going problem when comparing old pe10 valuations .

[dutchtraffic]

nothing changes , do your research , the  accounting rules are changed . your chart is useless  , you  keep disputing what i post but you fail and fail at disproving a thing and go off each time on some tangent .  these are facts not what you think in your head

You must be the most insecure person ever.
I wish you good luck with your paper-portfolio going forward and your perma-bashing of "anything else than your portfolio" on forums.

[mathjak107]

there you go again , if you can't win with facts , attack the person.

you do this over and over , trying to dispute what i post and then have zero facts.

i suggest you try challenging someone more on your level . you have yet to disprove a thing as you continually  try to attack what i post .

give it up my  friend .

insecure ?  hardly ,  i just make it a point of learning .  there is nothing here stated that  mentions my investing method .

in fact it is the reverse , anyone who doesn't buy in to your need for gold is not insecure , reckless or any other label you care to use  as you look in to your crystal ball and see doom for them.

[dutchtraffic]

there you go again , if you can't win with facts , attack the person.

you do this over and over , trying to dispute what i post and then have zero facts.

i suggest you try challenging someone more on your level . you have yet to disprove a thing as you continually  try to attack what i post .

give it up my  friend .

insecure ?  hardly ,  i just make it a point of learning .  there is nothing here stated that  mentions my investing method .

in fact it is the reverse , anyone who doesn't buy in to your need for gold is not insecure , reckless or any other label you care to use  as you look in to your crystal ball and see doom for them.

Everybody has put about 999 facts in your face, you just decide to discard them and continue on your never ending frenzy convincing yourself that you are doing the right thing, by attacking EVERYTHING that is not your 100% paper method.

[mathjak107]

i have attacked nothing . i have posted information about the other side of the coin  but i have never attacked the pp or any user .

there is nothing but facts , study's  and figures in my posts to support them  . whether someone agrees and has different facts and figures with merit is healthy .

but that is not what you do . you attack everything i post with just your own verbage or flawed information , or based on this vision in your head  and then when i point it out you attack me personally .

i have yet to post anything attacking  the pp other than i think  its time has come and gone  for various reasons which i expressed but i  still keep saying over and over for preservation it is fine .

[mathjak107]

there you go again , if you can't win with facts , attack the person.

you do this over and over , trying to dispute what i post and then have zero facts.

i suggest you try challenging someone more on your level . you have yet to disprove a thing as you continually  try to attack what i post .

give it up my  friend .

insecure ?  hardly ,  i just make it a point of learning .  there is nothing here stated that  mentions my investing method .

in fact it is the reverse , anyone who doesn't buy in to your need for gold is not insecure , reckless or any other label you care to use  as you look in to your crystal ball and see doom for them.

Everybody has put about 999 facts in your face, you just decide to discard them and continue on your never ending frenzy convincing yourself that you are doing the right thing, by attacking EVERYTHING that is not your 100% paper method.

i have seen quite a bit of flawed postings and data spewed . i have seen lots of cherry picked time frames in charts and unrealistic scenario's given as examples  .  some of it makes sense  and if i agree i said so . but results are the true bottom line to any thing .

if it meets your personal goals great but if it falls short then you need to reconsider .  not everyone's vision of the future in this country is preparing for  total financial collapse and fear mongering ..

[sixdollars]

not everyone's vision of the future in this country is preparing for  total financial collapse and fear mongering ..

Just wanted to get this cleared up, but do you think people hold the PP due to a common fear of total financial collapse?  If so, I think you've been sleeping with the wrong "enemy" too much and have missed the point of most members here.  The PP is supposed to be AGNOSTIC, it is not meant to be for people who want to make bets like that...

[mathjak107]

no i don't think that is why people hold the pp , i already stated that . but i do think dutch traffic is obsessed with that thought in every post he tries to counter what i say .

every post is about how paper assets WILL  fail and only his way of thinking  about hard assets will survive the debacle .

he has stated that over and over and over .

[sixdollars]

no i don't think that is why people hold the pp , i already stated that .

I see, my mistake then

[Libertarian666]

not everyone's vision of the future in this country is preparing for  total financial collapse and fear mongering ..

Just wanted to get this cleared up, but do you think people hold the PP due to a common fear of total financial collapse?  If so, I think you've been sleeping with the wrong "enemy" too much and have missed the point of most members here.  The PP is supposed to be AGNOSTIC, it is not meant to be for people who want to make bets like that...

Agreed. That's the reason I do NOT use the PP.

[MediumTex]

PRPFX is the version of the PP that is a bet against the U.S. dollar.

[LC475]

PRPFX is the version of the PP that is a bet against the U.S. dollar.

Even that is far from a pure bet against the dollar.  It's just a bit tilted.

If you really want to bet against something, you do not go long on the thing, you do not hold huge quantities of that thing.