A Tale of King Dollar's Invisable Clothing...

Sara Eisen, CNBC, writes...

*  *  *

Amid wild fluctuations in stocks and range-bound trading in bonds this week, the U.S. dollar marched ever higher.

* AND THIS IS UNDENIABLY GOOD NEWS!

* THE THING IS... THERE'S NO DISCERNIBLE ANCHOR TO ECONOMIC REALITY...

(*SHRUG*)

* IN OTHER WORDS... THERE'S NO REAL EXPLANATION FOR TODAY'S DOLLAR STRENGTH.

The currency is set to finish another week stronger, which would mark 12-straight weeks of gains, the longest winning streak ever.

Weekly data from the Commodities Futures Trading Commission show hedge funds and other large speculators' positions have increased substantially in the past few weeks, and the net long dollar bet now stands at $35.81 billion, not far from its its highest ever.

* SEE, FOLKS... THIS IS WHAT I MEAN... WE'RE STILL TALKING "CASINO ECONOMICS." IT'S ALL A GAME. NOTHING IS "REAL." THE DOLLAR'S RISE ISN'T TETHERED TO ANYTHING CONCRETE.

Net shorts on the euro and yen grew larger as well.

(*PURSED LIPS*)

Those crowded trades mean the dollar is vulnerable to a painful drop when momentum turns on any given day and trades unwind.

"As the Fed steps away from ultra-loose policies, the dollar should gain against the chief beneficiaries of those policies, namely emerging market and commodity currencies," currency strategists led by Kit Juckes at Societe Generale wrote in a note this week.

* YES! EXACTLY! BUT THE THING IS... THE FED ISN'T... ISN'T... STEPPING AWAY FROM ULTRA-LOOSE POLICIES! (WHICH IS WHY THE RECENT DOLLAR RISE IS SO INEXPLICABLE!)

In the third quarter, the dollar index shot up 7 percent, the biggest gain since the third quarter of 2008, when investors everywhere were scrambling for safe-haven assets as the financial crisis gripped the globe.

* SAFE...? REALLY...?

(*SIGH*)

And though the quarter was strong for the dollar, it's still 10% lower than a decade ago on a real trade-weighted basis.

* FOLKS. WHAT'S YOUR DOLLAR BUY YOU? HOW MUCH GAS WILL A DOLLAR BUY? HOW MUCH MILK? HOW MUCH COFFEE? HOW MUCH CHOP MEAT? (NEVER MIND HOW MUCH STEAK?!)

Beyond positioning and historical patterns though, the fundamental case for buying the dollar is still firmly in play.

* IT IS...???

The reasons: an outperforming U.S. economy...

(*JUST SHAKING MY HEAD*)

* FOLKS... ANYONE WHO EVEN BROWSES THIS BLOG SEMI-REGULARLY KNOWS THAT'S A LIE!

...along with a Federal Reserve that is increasingly seen raising interest rates...

* TOO LITTLE, TOO LATE! (COM'ON, FOLKS... WHO DO THEY THINK THEY'RE FOOLING...?!?! EVERYONE KNOWS - OR SHOULD KNOW - THAT THE FED BACKED OFF ON TRULY ENDING THEIR COUNTER-PRODUCTIVE "STIMULATORY" POLICIES! THE PUMP IS STILL BEING PRIMED - SO TO SPEAK!)

For instance, euro zone inflation slowed further in September to 0.3%, the lowest level in five years, according to figures released this week.

* THEY LIE ABOUT OUR INFLATION; I'M GUESSING THEY'RE LYING ABOUT EUROPE'S INFLATION.

(*SHRUG*)

And while European Central Bank President Mario Draghi disappointed investors Thursday by not announcing fresh stimulus or any imminent signal of QE, he did leave the door open to doing more. In his news conference in Naples, Draghi emphasized that the governing council is still committed to use other unconventional measures - i.e. QE - should the inflation outlook worsen.

* SEE WHAT I'M TALKING ABOUT, FOLKS!

Bank of America's chief currency strategist, David Woo, lowered his euro-dollar forecast early in the week "as growing deflationary concerns..."

* AGAIN... SEE WHAT I MEAN...? THESE PEOPLE LIVE IN AN ALTERNATE UNIVERSE!

The data on Japan this week also showed a deteriorating economy: Household spending fell 4.7% in August from a year ago, and industrial output fell 1.5% from August 2013 to the lowest level since June 2013.

* FOLKS... JAPAN HAS ALWAYS BEEN THE CAUTIONARY TALE - THE CAUTIONARY TALE IGNORED! (AND UNDERSTAND, FOLKS... "DETERIORATING" JAPAN IS A MAJOR BUYER (SUPPORT COLUMN) FOR U.S. TREASURIES - U.S. DEBT! (YOU'VE HEARD OF "THE BLIND FOLLOWING THE BLIND?" WELL... WHAT WE'VE GOT HERE IS "THE DETERIORATING FOLLOWING THE DETERIORATING!")

One question dollar bulls are asking: Will the dollar's new-found strength cause the Fed to delay tightening?

* PROBABLY!

* BUT, FOLKS... WE'RE TALKING BY DEGREE. THESE IDIOTS HAVE PUT THEMSELVES INTO SUCH A HOLE THAT IT'S GONNA TAKE A TRUE THIRD-WORLD-LEVEL CRISIS AND GLOBAL ECONOMIC "RE-SET" TO PUT THINGS STRAIGHT. TENS OF MILLIONS OF US ARE GOING TO BE TOTALLY SCREWED. THE MIDDLE-CLASS WILL BE DECIMATED... INDEED... FAR BEYOND SIMPLY DECIMATED.