There's a lot of talk about how to hedge against a falling dollar. If the dollar's slide slows then reverses over the next several years, where would one want to be positioned to capitalize on this reversal? Thanks.

You mean aside from ETFs specifically betting on a rising dollar?

saycanyouc said:If the dollar's slide slows then reverses over the next several years, where would one want to be positioned to capitalize on this reversal? Thanks.Can you kindly tell me what would be the cause/catalyst for this reversal?

Also to hedge a falling dollar, not sure why people say to stay in stocks as though being in the US market is some insulation. I would invest in foreign stocks (on the US exchange) or US stocks with foreign exposure. I don't see a dollar reversal until we become a RISING economy again and see some reversal in downward trends. There's just too much more downward pressure yet to unfold that I don't see the light at the end of this tunnel yet.

To hedge the falling dollar, I'm long on Japan (150 shares for now hehe) I think the dollar has a way to fall verses the yen. The carry trade would unwind at some point, then down goes all the overpriced markets, even the Japan market initially. There is the subprime mess AND threat of the carry trade unwinding that could threaten US growth in case we forgot. Despite what most think that the carry trade would affect emerging market investments I think it just may be the opposite and affect our liquidity dependent lifestyle the most. Just my very inexperienced noob thinking.

dolmar said:The mighty US Dollar the only currency in the world that has never been devaluated

Should I judge your financial knowledge by this statement? The value of dollar has been going down for 80 years. Do you know how much was a cup of coffee in the 50s?

Gold is the only currency in the world that has never been devaluated, for 5000 years.

agentpt5 said:dolmar said:The mighty US Dollar the only currency in the world that has never been devaluated

Should I judge your financial knowledge by this statement? The value of dollar has been going down for 80 years. Do you know how much was a cup of coffee in the 50s?

Gold is the only currency in the world that has never been devaluated, for 5000 years.

That funny considering the US Dollar is currently at 26 year low against Britsh pound currently. And in 1986 US Dollar was less than 1:1 to Britsh Pound and back in 1950 US Dollar was 1.27 to 1 Britsh Pound. So how you figure the value of the US Dollar has been going down?

And you claim about gold is a joke. In 1978 Gold was as high $1026 but in 1986 gold hit a low of $238 an oz. If you factored in for inflation and you bought gold back in 1978 then you would have paid over $2K an oz in todays dollars. Btw gold trades in sync with the US Dollar. When the dollar get stronger gold drops in price and when the dollars get weaker gold goes up in price. This is a fact.

If you look at France, Spain, Germany, even Japan most other countries at 1X or another have devalued there currencies by changing the exchanges rates or issuing new currency except the US Dollar. Inflation has nothing to do with devaluing a countries currancy both are independant of each other while both have the same net result.

dolmar said:The only reason the US Dollar is so weak now is for the following reason: we are cooking our CPI numbers and every central bank in world knows it. If we used Pre-1997 CPI calculations then our CPI would be runing 10%+ and ex food and Utils would be runing 6%+. So our interest rates should be at a min on par with England and more than likely higher today around 6-7%. 2nd the fed has been over printing money to provided liquidity for the down turn in the housing market and because congress keeps over spending. 3rd Democrats think it a good idea to ofend nations who are lending us money to finance out defict. Theses countries are now selling dollars and buying Euro's as they are starting to get fed up with Democrats and there protectionist comments. 4th we are sending too many dollars outside of the US which never get recirculated back in to our Economy for oil. These same Democrats think OPEC and most of the middle countries are our friends. And Japan, China and Europe are evil.

If you think Oil is going to remain over $70 a barrel then you are right US dollar is going to continue under presure. But if oil drops back down to $20-30 a barrel range then you will see dollar start to rally like crazy as our inflation will go back down to less than 1% and our interest rates would not be considered too low and we will no longer be exporting dollars but importing dollars which would allow the fed to start to remove dollars from circulation.Let's face it....the bottomline is how much longer given the present circumstances can we continue to attract dollars. Higher rates of return for capital are just not in the cards or we'll see the economy tank. For many reasons including those you cited compounded with our naturally declining growth relative to other countries all I see is dollar down.

I look at the whole scenario as having many key factors...and one is how much more debt can the American consumer take on at higher interest rates (without crushing) as global consumption heads higher.

Also, frankly I don't see oil going to $20-30 again. We're talking the glory days ala 80s-90s when we were preeminent.

I think we need to do an about face reversal in everything we are/do....including saving more, investing more in infrastructure at home, and stop playing games to continue/defend our wasteful lifestyle.

Speaking of inflation, I find it interesting that BB is touting "inflation expectation" as though it was THE statistic to keep/watch, much like "consumer confidence". That's even more charades on what true inflation is if you ask me. We can be running 10% but if we don't know or expect inflation then it's 2%.

dolmar said: I just stated why experts believe the dollar has fallen so much over the last couple of years which you may or may not agree with most mainstream economists, and what factors they think need to change before the dollar will start to stronger.

Who gives a crap about experts? Maybe you should state what do you believe? By the way, I do not see any reasons or facts that there will be a reverse. The Fed is bringing the dollar down slowly instead of a crash. Amero is in place to replace the dollar, if needed.

dolmar said:agentpt5 said:Who gives a crap about experts? Maybe you should state what do you believe? By the way, I do not see any reasons or facts that there will be a reverse. The Fed is bringing the dollar down slowly instead of a crash. Amero is in place to replace the dollar, if needed.

I personally agree with people like Alen Granspan, Bill Gross, Larry Fink, Hawk Paulson, John Snow, Dougy Kass, Arthur Laffer, John Rutledge, and Nouriel Roubini who I think are all much smarter than me. I normally dont bet against people who I know are much smarter than me. They are all claiming basically what I stated. They are some of the most respected economist in the world.

Betting against them I think that would be no different that 2nd guessing my doctor which I dont do either.

And what do Bill Gross say about the dollar? Do you even know?

I made my money by betting against salesmen for the sheep, like Greenspan and Paulson. When Greenspan told the sheep to use ARM, you can bet that he lied and interest rate was going higher.

dolmar said:the dollar breaks 80 on "US DOLLAR INDEX"



That's a certainty. The only drama is when.




we will see interest start to raise drastically which in turn should give support to the dollar


execept consumers are already tapped out. Rising interest rate will destroy the economy based on borrowing money that one does not have to buy stuffs that one does not needed. Not to mention the prices of houses will have to fall even further. A depression does not help the dollar.

i found this formula, which appears to be more reasonable than the constant bullshit from CNBC. Not sure if it will turn out 100% as stated. But it sure is a lot more probable than the non-stop, brain-dead propaganda from CNBC.

1. First interest rates rise affecting the drivers of the US economy, housing, but before that auto production goes from bull to a bear markets.
2. This impacts many other industries and the jobs report. An economy is either rising at a rising rate or business activity is falling at an increasing rate. That is economic law 101. There is no such thing in any market as a Plateau of Prosperity or Cinderella - Goldilocks situations.
3. We have witnessed the Dow rise on economic news indicating deceleration of activity. This continues until major corporations announced poor earnings, making the Dow fall faster than it rose, moving it deeply into the red.
4. The formula economically is inherent in #2 which is lower economic activity equals lower profits.
5. Lower profits leads to lower Federal Tax revenues.
6. Lower Federal tax revenues in the face of increased Federal spending causes geometric, not arithmetic, rises in the US Federal Budget deficit. This is also true for cities & States as it is for the Federal government.
7. The increased US Federal Budget deficit in the face of a US Trade Deficit increases the US Current Account Deficit.
8. The US Current Account Balance is the speedometer of the money exiting the US into world markets (deficit).
9. It is this deficit that must be met by incoming investment in the US in any form. It could be anything from businesses, equities to Treasury instruments. We are already seeing a fall off in the situation of developing nations carrying the spending habits of industrial nations; a contradiction in terms.
10. If the investment by non US entities fails to meet the exiting dollars by all means, then the US must turn within to finance the shortfall.
11. Assuming the US turns inside to finance all maturities, interest rates will rise with the long term rates moving fastest regardless of prevailing business conditions.
12. This will further contract business activity and start a downward spiral of unparalleled dimension because the size of US debt already issued is of unparalleled dimension.

Therefore as you get to #12 you are automatically right back at #1. This is an economic downward spiral.

http://www.jsmineset.com/home.asp?RQ=EDL,1&sPID=0&linkid=3806

 


People dont get paid hundreds of millions of dollars to work at Goldman because they are brain dead.

So, rich people are smart, and poor people are stupid? Paris Hilton made a lot of money too, is she smart?

Maybe they are paid hundreds of millions because they are in a position to manipulate government policies to redistribute wealth to the Goldman cronies.

dolmar said:agentpt5 said:So, rich people are smart, and poor people are stupid? Paris Hilton made a lot of money too, is she smart?

Most of this exchange you made sense except the above statement. Where did I claim poor people or even rich people are smarter? Are you claiming Paris Hilton got made millions for her finacial advise? Yeah Porn Stars get paid lots of money to get screwed on film but does that mean I would give them my money and let them choose how to invest it for me? Or any business publication would ask there opinion on the economy or for that matter any finacial matter? Or just because they get paid lots of money to get screwed on film they are qualified to run the Treasury or be Federal Reserve Chairman?

Paulson no matter what you do or do not think got paid hundreds of millions of dollars a year by Goldman because some one though he was smart economist, a good trader and a good deal maker something more than how hot he looked eating a hamburger in a Bikki or for getting released from jail early. I would never ask guy flipping burgers at Burger King nor the rich spoiled brat for finacial advice as I would not think either one is qualifed and yet one is rich and other is poor.

OK