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re: SHORT THE DOLLAR

Posted on 11/7/12 at 6:43 am to
Posted by TheHiddenFlask
The Welsh red light district
Member since Jul 2008
18384 posts
Posted on 11/7/12 at 6:43 am to
quote:

I graduated in Economics with a focus in International Trade.


I hope not from LSU, because your thesis is one of the most repugnantly oversimplified pieces of crap imaginable.

quote:

Once again I would be more than happy to hear your rationale for the strength you see in the dollar.


Relative strength. Please address that and I will view your valid as semi legitimate.
Posted by CaptainJ47
Gonzales
Member since Nov 2007
7368 posts
Posted on 11/7/12 at 7:00 am to
No not LSU. So let's look at the major currencies. First, the euro- short term due to Greece this will likely stay flat. In particular the long-term view that the dollar is the relative safe haven of the two will keep the pair in its current range.

Looking at the USD-JPY you have financial stability in Japan, assuming no other national disasters. There is not a significant amount of difference in rates to merit a risk and investment in the dollar.

We can go through more if you want. When rates are artificially low because the government is the primary buyer of notes. This easy monetary policy will continue for the foreseeable future causing an escalation of national debt. Eventually, and as you can see in my original post I didn't say the dollar would crash today, but it will when debt as a percent of GDP doesn't normalize. The debt growing is assumed but the only way to prevent this is to grow your way out. With the election I see no reason to believe growth will exist in a significant way to have this moderate.

And no I would like your rationale.
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