Anyone Else At The Panic Point On The Dollar?

[nineinchal]

I'll panic when I go to the corner store and they ask to be paid in euros.

[ArturiusX]

[ QUOTE ]
If my parents are old enough to take money out of thier retirement annuity, I'm really thinking of asking them to put it all into commodities and foriegn CDs.

I'm flat out scared at this point. Our CPI statistic might as well have been scribbled in cryon by a child and the person in charge of our central bank is f-ucking insane.

[/ QUOTE ]

And this, my friends, is when the worst is over. When the late comers start to really panic.

[Mort10]

I see your point, and the dollar is probably bound to rally for a little while just due to people reversing their dollar shorts.

I do realize that they have this information too. The difference is that they don't use it They believe the Feds forecasts. They believe that the weak dollar is good for the US. They don't think the current situation is bad for the US economy. I guess it all comes down to how much foreign capital you can attract in the future. If the markets go on a rally than the dollar will probably appreciate. However, I do not think this is the case and that is why I would not hold dollars.

The same would for example stand for the S&P500. If I was American I would have shorted the S&P500 because I see a lot of problems ahead. However, a lot of investors that are a lot smarter than me are long. People are bound to take different positions. Some will be right and some will be wrong. At the end of the day you just have to process the information the best you can and go with your decision.

[lehighguy]

I've been short USD with my own money the whole time people have been saying "the sub prime problem is contained". It has saved my skin, and I think it will continue to save my skin.

[lehighguy]

Being a contrarian works when you've got solid analytical reasons why the rest of the market is in a frenzy. By contrast, there is no reason to be buying the dollar. Leaving aside that disaster in the domestic financial markets, my personal opinion is that people haven't fully gotten thier head around the fact that the CPI is being manipulated. That insulting 0.8% CPI in Q3 really woke me up and got me digging on the subject. Eventually people are going to realize it is being systematically understated (some do, hence the last five years).

As for diversification I'm an American citizen who lives hear, gets paid in dollars, etc. I have a HUGE exposure to dollars in my life, this is good diversification. If I'm wrong that would be FANTASTIC. I'll take a 20% decline in my commodities holdings before a hyperinflationary depression.

[Mort10]

[ QUOTE ]
Being a contrarian works when you've got solid analytical reasons why the rest of the market is in a frenzy. By contrast, there is no reason to be buying the dollar. Leaving aside that disaster in the domestic financial markets, my personal opinion is that people haven't fully gotten their head around the fact that the CPI is being manipulated. That insulting 0
.8% CPI in Q3 really woke me up and got me digging on the subject. Eventually people are going to realize it is being systematically understated (some do, hence the last five years).

As for diversification I'm an American citizen who lives hear, gets paid in dollars, etc. I have a HUGE exposure to dollars in my life, this is good diversification. If I'm wrong that would be FANTASTIC. I'll take a 20% decline in my commodities holdings before a hyperinflationary depression.

[/ QUOTE ]

Great post! I also strongly believe that inflation is a huge danger and can't for the life of me understand why the Fed doing anything about it. Still, it's good to see that others are thinking in the same lines and that I'm not delusional... [img]/images/graemlins/smile.gif[/img]

[mmctrab]

[ QUOTE ]
If everyone already knows that the dollar is going to get weaker, the price would already be at that weaker level.

[/ QUOTE ]

That's right,except "everyone" doesn't already know the dollar is going to get weaker. People routinely underestimate how bad things are going to get, and come to believe that the worst is already past. But, they often don't understand that things can continue to get worse for quite a bit longer than they thought.

Things can get quite a bit worse for the dollar, because the economy in the US will likely get quite a bit worse over the next several years. I'm not saying the dollar will keep going down, but I don't think the dollar is pricing in everything that can wrong by a long shot. There are too many reasons to not buy the dollar and buy other higher yielding currencies.

[kimchi]

[ QUOTE ]
I'll panic when I go to the corner store and they ask to be paid in pieces of silver .

[/ QUOTE ]

[T50_Omaha8]

[ QUOTE ]
That's right,except "everyone" doesn't already know the dollar is going to get weaker. People routinely underestimate how bad things are going to get, and come to believe that the worst is already past. But, they often don't understand that things can continue to get worse for quite a bit longer than they thought.

Things can get quite a bit worse for the dollar, because the economy in the US will likely get quite a bit worse over the next several years. I'm not saying the dollar will keep going down, but I don't think the dollar is pricing in everything that can wrong by a long shot. There are too many reasons to not buy the dollar and buy other higher yielding currencies.

[/ QUOTE ] But there is no real economic evidence in this post.

The only evidence apparent to me is that imports are flat while output and exports are skyrocketing. Europe can hardly afford to import lots of goods into the US anymore, nor compete with US imports into their domestic markets. Companies that ignore this are being censured strongly by the business press for missing out on staggering cost savings.

If nothing else we have far and away the best freight infrastructure on Earth (every other country is completely lol except a couple in Asia) and an extremely well educated and skilled workforce. And we a like to be paid in dollars. And that's not going to change any time soon.

Please explain to me how American labor productivity has collapsed in the last few months and maybe I'll heed your conclusions. The fact that people routinely underestimate problems is just as irrelevant as the fact that people routinely overestimate problems, unless you have some basis that the whole market (not just some people) are underestimating the problem.

[disjunction]

[ QUOTE ]
That insulting 0.8% CPI in Q3 really woke me up and got me digging on the subject. Eventually people are going to realize it is being systematically understated (some do, hence the last five years).


[/ QUOTE ]

Can you elaborate on this. I agree that the CPI has been understated. What I haven't seen evidence for is the conspiracy-theory aspect. Who has both the motive and the power? Who is putting pressure on whom to understate it? Why has there not been a scandal or even a hint of a whistle-blower?

I know all about the core inflation thing, but that was a long time ago.