What is a good long term investment for a rising US dollar?

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

dolmar said:

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.

Agentpt5 is not saying Gold is NOT subject to the markets like everything else. It is subject to mania and bubbles like other commodities, stocks, bonds, and other investment vehicles. What Agentpt5 is saying (if I may attempt to bridge the gap here) is that 1 oz of Gold in 1900 buys the same amount of goods and services as 1 oz of Gold today. In that respect, it has not devalued. The dollar, since 1913, has devalued by 95%. So, $1 in 1913 terms is only worth 5 cents today. That is a fact. So, yes, the dollar -- like every other fiat based currency -- is devalued. Now, have standards of living risen even as the dollar has devalued? Sure; but that is more due to advances in productivity than probably any other factor.

Any fiat-based currency can be devalued by simply increasing the money supply (inflation).

We should go return to a precious metal backed currency system and just devalue all the currency to compensate. Just my opinion. You could earn $10k/year instead of $100k/year, but your car could cost $300. It's all relative and while we're at it, ditch the penny. It'd help fight counterfeiting too, especially if we do coins only (using the precious metal).

kantscholar said: You could short the GLD--that's what some boys I know at Goldman Sachs have been doing for the past 6 months.

Please follow these morons. I love people to bet against me and short GLD.

Goldman, JPMorgan Stuck With Debt They Can't Sell to Investors

By Caroline Salas and Miles Weiss

July 17 (Bloomberg) -- Goldman Sachs Group Inc., JPMorgan Chase & Co. and the rest of Wall Street are stuck with at least $11 billion of loans and bonds they can't readily sell.

The banks have had to dig into their own pockets to finance parts of at least five leveraged buyouts over the past month because of the worst bear market in high-yield debt in more than two years, data compiled by Bloomberg show.

Bankers, who just a few months ago boasted that demand for high-yield assets was so great that they would have no problem raising debt for a $100 billion LBO, are now paying for their overconfidence. The cost of tying up their own capital may curb earnings and stem the flood of LBOs, which generated a record $8.4 billion in fees during the first half of 2007, according to Brad Hintz, the former chief financial officer at New York-based Lehman Brothers Holdings Inc.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aserXf4f8u2M&refer=home

*I* am brain dead lol...I've been a dollar bull for so long I forgot. Being 100% cash is a dollar bull play is it not? And hoping the US economy can stomach higher rates lol. I read recently there is strength through weakness...how appropriate.

I've been so alarmed and concerned recently about the falling dollar is ironical, not funny.

Furthermore, dolmar is right, the cooking of the books is not good. I am beginning to be doubtful that we'll ever receive what is rightfully due. On one hand saying no inflation keeps government payouts low and the market churning nicely, on the other hand, saying inflation expectation is on the high end enables the Feds to raise rates if they have to. Nice, they've successfully engineered playing both ends of the fiddle.

And also why, I am beginning to doubt whether higher interest rates are in the cards. The economy is bigger than only USA and the finance system much more complicated than I can ever understand that what is logical to happen may not happen. Also the Feds know that managing expectations and cooking the books are key...with those two things they can engineer the markets and the inevitable never happens. Sigh I give up.

Buy stock in US companies that earn a large chunk of their profits from overseas and report in USD. Examples include Caterpillar, McDonalds, etc.

Caution:

IF i am not mistaking if US dollar continues to fall down then it will hurt lot more to Japan, China & Korea. I think it will also bring their currency down. So do more research on this. Good luck

Hey Guys, i really love this topic because it has been hurting my pocket. So if we can talk more serious and also with more knowlege. ALl the analysts out their bring their analysis here in this topic and let us know what's short term future in 6 to 12 months. Should be buy indian currency for being indian or any other currency or gold etc?

What is causing US dollar fallinig down?
Is it in benifit of US to devalluate temporary so they can reduce their debit?
What will drive back US higher in future (Only higher interest rate becuase Oil prices doesn't seem to be coming down)

Reply with good points or other links or researches.

Tahnk you for everybody's time

All FW members this could be great money making investment if we follow right path and of course if it works that way. This is very volatile situation so be careful with investment. Problem is you can not jsut sit and not do any action.
Becasue average indian like me just lost 20 % of their liquid money compare to last year because of us dollar falling down.

Thank you

desiluvu said: Caution:

IF i am not mistaking if US dollar continues to fall down then it will hurt lot more to Japan, China & Korea. I think it will also bring their currency down. So do more research on this. Good luckBut isn't it all relative?

For example with Japan, the dollar is currently very strong compared to the yen. Should there be a reversal and the yen gains strength, the dollar will fall with respect. And what may cause this reversal? The carry trade is risk averse, so whenever the US stock market rocks, the yen carry trade wobbles and the yen gets stronger, and when the yen gets stronger, the yen carry trade wobbles further. However, while it may not be the end to the entire carry trade business, it will certainly cause concern for our economy and further the subprime contagion, which is why I believe the Feds/our government could have a hand in smoothing out the statistics it bears. I just think when the carry trade unwinds Japan will coincidentally emerge out of it's shell (eg. partnerships with American companies (GE) to lend the leadership it needs). I'm silently hoping for a reemergence of Japan's dominance.

Potlickerttu said: Too much back and forth in this thread......If you want to Bet on the strengthing just buy RDPIX (Rising U.S. Dollar ProFunds)

The question was not if they should go long on the dollar but how to do it.

Agreed, we've gotten a bit off track. To the OP, for a rising dollar you can look at Everbank's Dollar Bull CD or you can even invest in something as common as stocks/bonds. Bonds will benefit quite a bit if you think interest rates are going down (bond prices are inversely related to interest rates) and nothing seems to shake the stock market right now.

Let me bring this conversation back to earth. The OP actually asks a very simple question. How to benefit from a rising dollar.

The answer is also simple ... hold dollars, and dollar-denomiated assets and stocks of corporations doing business in the US.

Fact is...if you are an American, chances are you already are paid in dollars and more likely than not, you already have a bank account or other investments in dollars. Congratulations! You've doing what it takes to benefit from a rising dollar.

Yes, there are more "advanced" strategies that some have alluded to...OK if gambling/speculation is what you have in mind, but inappropriate if your goal is just to benefit generally from a rising dollar.

Also please ignore the "goldbugs" and would-be monetary theorists here. This isn't the Monetary Theory forum. I actually happen to agree with some of the conclusions these clowns have made --- but not for the reasons they make them.

Does anyone have any new/better ideas of which way the Dollar is heading and how to best profit from it?