Sean Hyman

Last week was a good economic data week, right? After all, the U.S. GDP number came in at 3.5 percent, better than expected. So good times are ahead, right?

I’m often asked how quickly will things return back to normal? Well, one thing is for sure — as beaten up as the economy has gotten in the last couple of years, it may take a while.

Right now, we are seeing steep rises in many foreign currencies as the greenback continues its fall. However, it’s good to realize that all of these central banks don’t welcome the rise and that they are resisting it sometimes to the point of intervention.

Be watchful of an economic downturn. If we get it. . . think “New Zealand dollar.” The short sellers of the currency would likely win out at that time and the buyers of the currency would just have to scamper to the sidelines as the balance of power shifts once again.

I expect the carry trades to have at least a huge pullback along with stocks in the near term and possibly an entire trend reversal back into a downtrend as tight-fisted credit continues to choke off the consumer and therefore the economy right along with it.