why are you not massively shorting the dollar?
 

something i always read about pretty much everywhere is how much trouble the dollar is in.

i remember when it was at 1.9 $/£ all i ever read was that it was going to hit 2.00 and it has comfortably done so.

the mood has not changed, the dollars decline should still be with us for a long time to come, again from what i keep reading.

so why are people massively shorting the dollar, as in leveraging hugely?

Re: why are you not massively shorting the dollar?
 

Cause I'm American?

Re: why are you not massively shorting the dollar?
 

U.S. budget deficits have declined pretty dramatically from the worst of the Bush years. But they are still apparently understated by some funny accounting. Since I believe budget deficits help depreciate a currency it would seem things are getting better for the dollar. So I'm not sure I would short it going forward. A lot will depend on the makeup of the next congress and president.

Re: why are you not massively shorting the dollar?
 

[ QUOTE ]
U.S. budget deficits have declined pretty dramatically from the worst of the Bush years. But they are still apparently understated by some funny accounting. Since I believe budget deficits help depreciate a currency it would seem things are getting better for the dollar. So I'm not sure I would short it going forward. A lot will depend on the makeup of the next congress and president.

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relative growth, foreign savings, and relative interest rates also have massive imapcts on the dollar. fiscal deficits don't add much in relative terms (i.e. in terms of new bond issues).

other flows are hugely mor impactful

i'd still want to short the dollar.

Barron

Re: why are you not massively shorting the dollar?
 

[ QUOTE ]
Cause I'm American?

[/ QUOTE ]

This is probably a joke, but it reminds me reading about traders who bust out after the tech bubble burst for refusing to short US stocks.

"It's unpatriotic" [img]/images/graemlins/smile.gif[/img]

Emotional nonesense. I'd have though embracing capitalism was patriotic enough for an American...

Re: why are you not massively shorting the dollar?
 

[ QUOTE ]
[ QUOTE ]
Cause I'm American?

[/ QUOTE ]

"It's unpatriotic" [img]/images/graemlins/smile.gif[/img]

Emotional nonesense.

[/ QUOTE ]

Re: why are you not massively shorting the dollar?
 

[ QUOTE ]
U.S. budget deficits have declined pretty dramatically from the worst of the Bush years.

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This is an illusion. Inflated dollars are simply returning to the treasury as tax revenues and an artificial boom.

Re: why are you not massively shorting the dollar?
 

thanks for the replies,

ive put some more on today:

£100 per $0.01 swing vs £

£100 per $0.01 swing vs Euro

shorting dollar on both.

Re: why are you not massively shorting the dollar?
 

[ QUOTE ]

£100 per $0.01 swing vs £

£100 per $0.01 swing vs Euro

shorting dollar on both.

[/ QUOTE ]

Wow? I would have picked almost any of the other top-20 major world currencies (excluding NZ$, AU$ and CAD). I am not bullish on the US$ but I'd much rather bet yen or yuan against the dollar than € or £.

Actually I do have a significant bet against the US$, and it's 35% gold, 35% silver, 30% Chinese telco.

Re: why are you not massively shorting the dollar?
 

ah okay cool, ill switch the euro one to $ vs the yuan, thanks.

as for the £ one i might as well keep it as i have $20k tied up in staking so a $0.01 swing changes my amount by £100 the other way, so it's just a hedge really.

what would you say is a good stop loss for gold?

Re: why are you not massively shorting the dollar?
 

bump.

the overwhelming majority of posts i read on this finance forum regarding the dollar are saying how the dollar long term is in real trouble. now i know i shouldnt trust strangers views, but in general you all seem very clued up and all seem to pretty much agree.

surely this is a great bet to make? the downside is surely limited given the dollar will not make an incredible turnaround, yet could decline for many month/year(s) to come.

i know i know basically nothing about finance, but when i read so many people saying the dollar will continue to decline, i cannot see why anyone would thus not heavily leverage the dollars decline.

i am planning to leverage as much as i can without risking any serious money (probs most ill risk on short dollar or on gold it real money is $30k)

fwiw, right now:

$60 per $1 on gold
$100 per $1 swing in dollars per £
$100 per 1 yen swing in per $

this has maxed out my £7.5k/$15k i have in my spreadbetting account as i have 15-20% stop losses. i want to deposit probably another $15k and doubling my positions on gold and on yen:dollar, maybe throw in a bit of silver and oil as well.

Re: why are you not massively shorting the dollar?
 

I've been long gold and Pounds Sterling for about 5 years now. It's working out alright for me.

Re: why are you not massively shorting the dollar?
 

[ QUOTE ]
I've been long gold and Pounds Sterling for about 5 years now. It's working out alright for me.

[/ QUOTE ]
HELL yes

Re: why are you not massively shorting the dollar?
 

how long do you anticipate it to last?

and nicely done on your returns over the last 5 years, must of been nice [img]/images/graemlins/smile.gif[/img]

it seems like such easy money given how obvious everyone seems to think it is.

Re: why are you not massively shorting the dollar?
 

John, for once I am with you on an investment decision.

Re: why are you not massively shorting the dollar?
 

[ QUOTE ]
how long do you anticipate it to last?

and nicely done on your returns over the last 5 years, must of been nice [img]/images/graemlins/smile.gif[/img]

it seems like such easy money given how obvious everyone seems to think it is.

[/ QUOTE ]

My investments in gold coincide with my undergraduate studies in Economics/GT. I felt they were good investments then and I feel the same way now, though I have largely ignored commodities markets in recent history (like most of you, I'm a buy and hold investor). I just recently switched all my ETF's over to Zecco from Firstrade, and I might get more active with zero commission incentives.

I have no short or long-term analysis worth posting about GLD/SLV or EUR/GBP. That is to say, I have my definite feelings and partial research done on them, but I don't like giving out half-assed advice on investing matters.

Good luck with your investments, though! [img]/images/graemlins/smile.gif[/img]

Re: why are you not massively shorting the dollar?
 

i think the question is if the fed will finally boost inflation to allow the government and it s citizen too get rid of their debts to foreigners.

Re: why are you not massively shorting the dollar?
 

The dollar will continue to decay........precisely why I'm pro metals/farmland.........and will be for sometime in all liklihood.

Post deleted by Mat Sklansky
 

Re: why are you not massively shorting the dollar?
 

Currency bets are best left to the experts as they are essentially a zero sum game. You can be a moron day trader and still come out ahead (if you keep transactions cost somewhat minimized) as the stock market is NOT a zero sum game.

As far as the USD, folks had good reasons to think it might fall and it did (we are talking 25% are so in round numbers). That is really a huge fall for something like the dollar which is still THE world currency when you get down to it. But there are limits on how far it can fall and it's not clear how much farther it should -- lots of people think the euro is over-valued now, for example.

Anyway, I'm not a currency guy and can't predict things, but I will at least note that part of the recent fall is b/c the US economy is weakening and a rate cut was expected and delivered (other things equal, there tends to be an instant drop in a currency in response to that country's interest rate dropping relative to other countries). If Europe and other areas follow the US downturn, the USD could easily rebound against other countries. I'm not predicting, just sayin, keep that kind of stuff in mind.

Bottom line: play blackjack if you like high variance coin flips. You will at least get free drinks out of it.

Re: why are you not massively shorting the dollar?
 

Also, if you find that you are successfully able to predict currency changes, you might want to ask Alan Greenspan for a job as he has maintained that exchange rates are unpredictable. So I'm sure he will be very impressed when you prove him wrong!

Re: why are you not massively shorting the dollar?
 

Can you please point me to sources that say the euro is overvalued? Everybody who knows nothing about currency is jumping on the euro bandwagon it seems.

Re: why are you not massively shorting the dollar?
 

Economist Big Mac index (might need subscription) implies Euro overvalued by 22%.
Big Mac Index

Not the most rigorous PPP index but not w/o merit either. I'm pretty sure the Economist has suggested in other articles that the euro might be overvalued but I can't find any other links.

But just to be clear, I'm not trying to predict anything. Just saying that lots of people thought the dollar would lose value and it has -- about 15% in the last year and 30% in the last 5 years. Will it drop more? I don't know, but it won't keep dropping forever, just keep that in the back of your head if you decide to play the currency game.

Re: why are you not massively shorting the dollar?
 

Actually, here is what I was looking for:

The Economist

Here is the relevant text if the link requires a subscription:

"Morgan Stanley uses no fewer than 13 models to value currencies. Its latest update offers a wide range for the euro's fair value against the dollar from $1.02 to $1.29, with a median value of $1.15. By all measures the euro's current rate of $1.34 looks overvalued. Sterling and the New Zealand, Australian and Canadian dollars also all look too expensive (see chart). Most striking is the New Zealand dollar that is 29% overvalued."

Edit to add: note that Euro has risen to $1.41 since the article was published (June).

Re: why are you not massively shorting the dollar?
 

because when the masses are touting something as a good bet, it is time to think about going the other way. works everytime.

Re: why are you not massively shorting the dollar?
 

ive been (indirectly) short the dollar for the past 5 years....needless to say, im VERY satisfied with my returns and have no plans whatsoever to reverse the position until next summer/fall.

Re: why are you not massively shorting the dollar?
 

Seems a little late to profit from the decline o the dollar as the market seems well aware of it. At this point it may be the case that the dollar is over sold ( or at least I hope). It does seem though that the government/FED feel a weaker dollar may help the account deficit and the trade deficit.

Re: why are you not massively shorting the dollar?
 

This might be a stupid question, but aren't expectations already factored into the price the currency trades at? If it's 'obvious' to everyone that the dollar will continue to decline, isn't that already reflected in its current price?

Re: why are you not massively shorting the dollar?
 

No, as most people do not understand how bad the situation is right now with the US DOLLAR..........it is on the verge of being worth ZILCH, NADA, NOTHING.

Re: why are you not massively shorting the dollar?
 

I was trying to buy a DVD player at a Best Buy in Virginia yesterday but they wouldn't let me b/c all I had was dollars but they were only accepting Euros. Clearly, Best Buy knows what is up and doesn't want to get stuck being the last holding on to worthless dollars. Idiots at Circuit City happily took my money though. I even gave one of the kids working there $5 to carry it out to my car. What a moron, he didn't even realize he was doing it for free!

Re: why are you not massively shorting the dollar?
 

op, you should check out the sports betting forum if you like betting on stuff that strangers on the internet are really sure about. and i dont even mean really sure. im talking about locks, op. L-O-X.

Re: why are you not massively shorting the dollar?
 

[ QUOTE ]
No, as most people do not understand how bad the situation is right now with the US DOLLAR..........it is on the verge of being worth ZILCH, NADA, NOTHING.

[/ QUOTE ]


Seek help.

Re: why are you not massively shorting the dollar?
 

our country has lots of issues now that will create inflation which will drive up interest rates and the dollar as well. i wouldnt be to sure its going to fall to far from here. but picking the direction of currencies is like picking your nose, you never are sure what is coming.

Re: why are you not massively shorting the dollar?
 

The dollar is going to crumble massively in the next few months/years...........how can it not?

Re: why are you not massively shorting the dollar?
 

[ QUOTE ]
Also, if you find that you are successfully able to predict currency changes, you might want to ask Alan Greenspan for a job as he has maintained that exchange rates are unpredictable. So I'm sure he will be very impressed when you prove him wrong!

[/ QUOTE ]

http://www.reuters.com/article/bonds...71147920070917

Greenspan told weekly Stern it was "absolutely conceivable that the euro will replace the dollar as reserve currency, or will be traded as an equally important reserve currency," the magazine said in a preview of this week's edition.

Re: why are you not massively shorting the dollar?
 

[ QUOTE ]
Currency bets are best left to the experts as they are essentially a zero sum game. You can be a moron day trader and still come out ahead (if you keep transactions cost somewhat minimized) as the stock market is NOT a zero sum game.

As far as the USD, folks had good reasons to think it might fall and it did (we are talking 25% are so in round numbers). That is really a huge fall for something like the dollar which is still THE world currency when you get down to it. But there are limits on how far it can fall and it's not clear how much farther it should -- lots of people think the euro is over-valued now, for example.

Anyway, I am a currency guy, but I will at least note that part of the recent fall is b/c the US economy is weakening and a rate cut was expected and delivered (other things equal, there tends to be an drop in a currency in response to that country's Real interest rate dropping *relative* to other countries).
If Europe and other areas follow the US downturn, the USD will rebound against other countries. I'm not predicting, just sayin, keep that kind of stuff in mind.

Bottom line: play craps if you like high variance coin flips. You will at least get free drinks out of it.

[/ QUOTE ]

Re: why are you not massively shorting the dollar?
 

[ QUOTE ]
our country has lots of issues now that will create inflation which will drive up interest rates and the dollar as well. i wouldnt be to sure its going to fall to far from here. but picking the direction of currencies is like picking your nose, you never are sure what is coming.

[/ QUOTE ]

I'd rather pick dollars from my nose then, yuan, rubels, or euro's. I know what is coming and that is a showdown with Iran. When that happens, the rest of the world will want guaranteed US investments, even at a low interest rates.

I said it before, and I'll say it again, I ain't trusting the Chinese or the Ruskies with my money, in whatever currency.

Re: why are you not massively shorting the dollar?
 

[ QUOTE ]
The dollar is going to crumble massively in the next few months/years...........how can it not?

[/ QUOTE ]

A dollar collapse is a global economic collapse. Canned foods and small arms are my investments along with smaller positions in barbed wire and North Dakota real estate for this scenario.

Re: why are you not massively shorting the dollar?
 

[ QUOTE ]
our country has lots of issues now that will create inflation which will drive up interest rates and the dollar as well. i wouldnt be to sure its going to fall to far from here. but picking the direction of currencies is like picking your nose, you never are sure what is coming.

[/ QUOTE ]

um

you do realize that further inflation means the further decline of the dollar, dont you?

the thing confounding the issue is the depth of the housing/credit bubble. its surely bigger than most imagine, as indicated by the FEDs sharp .50pt cut in rates. if credit contracts faster than the FED can keep up cutting rates, perhaps youll see the dollar improve as deflation comes in

Re: why are you not massively shorting the dollar?
 

[ QUOTE ]
[ QUOTE ]
The dollar is going to crumble massively in the next few months/years...........how can it not?

[/ QUOTE ]

A dollar collapse is a global economic collapse. Canned foods and small arms are my investments along with smaller positions in barbed wire and North Dakota real estate for this scenario.

[/ QUOTE ]

Reality bites, however honest it may be.