Comments on: U.S. Dollar Rallies as Economic Foundation Crumbles http://www.dailyreckoning.com.au/us-dollar-7232/2008/08/18/ An independent perspective on the Australian and global investment markets Sat, 21 Nov 2009 10:39:45 -0600 http://wordpress.org/?v=2.8 hourly 1 By: Curt http://www.dailyreckoning.com.au/us-dollar-7232/2008/08/18/comment-page-1/#comment-35858 Curt Mon, 18 Aug 2008 15:47:17 +0000 http://www.dailyreckoning.com.au/?p=3370#comment-35858 The dollar may hold for a while, but eventually the fundamentals will come to light and the dollar will just as suddenly lose its gain one day. Predicting that day is not easy, but I'm not going to risk it. The weakness in Europe and Japan are primarily due to losses from borrowing money to the US that we cannot pay back. Foreign nations will soon begin to reduce lending to the US and that will pull the legs out from the dollar. The dollar may hold for a while, but eventually the fundamentals will come to light and the dollar will just as suddenly lose its gain one day. Predicting that day is not easy, but I'm not going to risk it. The weakness in Europe and Japan are primarily due to losses from borrowing money to the US that we cannot pay back. Foreign nations will soon begin to reduce lending to the US and that will pull the legs out from the dollar.

]]> By: Ross http://www.dailyreckoning.com.au/us-dollar-7232/2008/08/18/comment-page-1/#comment-35848 Ross Mon, 18 Aug 2008 12:08:52 +0000 http://www.dailyreckoning.com.au/?p=3370#comment-35848 My guess is the latter (manipulation), has had the opportunity for the first time in years to carry the day due to the former (excessive leverage) being unable to sustain any defence or call the bluff Soros-sterling style. The perverse can be seen in equities too with several Aust property stocks positively jumping out of the sin bin in the last month in full face of a recession. Be it equities, currencies, or commodities those leveraged positions are being attacked an punished. The narrative for the kiwi's rise against the AUD is ridiculous, as is the pound's ability to push back against the Euro. I am no backer of the AUD in the medium term but I back the USD dead dog bounce theory and will be holding onto to the select equity portfolio. My guess is the latter (manipulation), has had the opportunity for the first time in years to carry the day due to the former (excessive leverage) being unable to sustain any defence or call the bluff Soros-sterling style.

The perverse can be seen in equities too with several Aust property stocks positively jumping out of the sin bin in the last month in full face of a recession. Be it equities, currencies, or commodities those leveraged positions are being attacked an punished.

The narrative for the kiwi's rise against the AUD is ridiculous, as is the pound's ability to push back against the Euro. I am no backer of the AUD in the medium term but I back the USD dead dog bounce theory and will be holding onto to the select equity portfolio.

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