Safe Havens

Is the US dollar a safe haven?  Yes, under the following conditions:

1) Japanese central bank scares yen buyers with bursts of yen selling that rips the face of the shorts every few weeks. 

2) Europe gets so bad that no one wants to hold any euro denominated assets other than German bonds.

3) Gold volatility gets so insane that $70 moves intraday are normal, scaring off safe haven buyers.  What, did they expect only $70 up moves and no $70 down moves forever? 

4) Swiss gives the FU to safe haven seeking speculators and decide to peg their currency to the euro with unlimited Swiss franc selling / euro buying. 

5) Fed takes a break from QEing for more than a couple of months.  Bazooka Ben takes a break from bombing dollar longs to get cute and do Operation Twist, which will acheive basically nothing but squeeze 30 Year Treasury shorts.

6) Everyone believes that Obama is telling the truth when he says the $447 B jobs act will be balanced with equal amounts of spending cuts.  Or, what's another $447 B in the budget deficit among friends, do people really care if it is $1.7 T instead of $1.2 T?  They are dumb enough to buy 10 Year Treasuries at 2% anyway, feed them more hay.

There you have it, we have finally achieved enough conditions necessary to get a temporary speculative bid in the dollar.  For those expecting a long lasting dollar rally, I suggest you join Robert Prechter in the deflationistas camp, those who think a 10 year bull run in oil prices is temporary, believe in the CPI numbers and the tooth fairy, and think S&P will go to 400.