Betting Against the U.S. Dollar

It is easier than you think. There is an exchange traded fund, PowerShares DB U.S. Dollar Index Bearish (UDN), that shorts futures contracts on the U.S. dollar versus other currencies. As the Treasury continues to borrow money from China and lend it to U.S. banks, the long term outlook for our currency is bleak, to put it nicely.

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Comments

[EUARTE:]

Yes, in ordinary times you would be right. However, today with fiat currencies the Dollar is still a good purchase. Why? The other currencies are worse and will raise in value only after the current crisis seems on the mend.

Jan 18 07:59 AM

[sstro:]

It's still a little early to get in this fund now. After the new spending bill,sold to us as stimulus starts it's way through the system and it's affects show little or no real stimulus that's the time to jump in.

Jan 18 08:56 AM

[Trevose_Lion:]

What do you think about shorting the Euro?

Jan 18 12:13 PM

[know nothing:]

Everyone jumping on the Obama band wagon has it's dangers also, I've seen overly optimistic people all love someone at once,but as time goes on and people's expectations are not satisified, look out! We the people can turn into rattlesnakes. Obama has a hugh job in front of him, with all the economic problems,People may have to high of expectations of the new ladd. When they finally realize that it maybe more than one person can handle,we could be in for a real wild ride. Especially in the instant gratifacation society,we want it all and we want it now! The next 4 years should prove to be interesting. Keep your powder dry!

Jan 18 12:34 PM

[Deegan:]

The dollar is doomed. In a year or two it will no longer exist as the world's reserve currency. Who knows what will replace it. I expect to see a new currency come out of the ME that will be based on oil or gold or even both.

Why would the Arabs or the Chinese trust the US dollar? They see that this country is living beyond its means. Besides the Chinese are starting to have problems of their own with huge masses of unemployed. They all need a place to sleep and food to eat. The govt. is going to have to supply it to them somehow.

Maybe they will use some of their dollars to buy US foodstuffs since commodities are in the dumps. Really everyone should buy some gold or silver "just in case" the dollar collapses.

Jan 18 02:27 PM

[Glen Bradford:]

TBT is what you should be holding.

seekingalpha.com/artic...

Jan 18 07:47 PM

[Bad Dog:]

The real body blow to the USD will come in the form of some very big bank failures yet to come that may necessitate at least a partial nationalization of part of the banking sector. In November we started seeing capital outflows - around $56 billion. That can only accelerate as foreign governments try to shore up their own economies through domestic spending that incidentally will make the USD weaker and some foreign currencies stronger. The selling off of USD will accelerate in the next few months. By the end of the year and into 2010, as the stimulus package starts to impact the economy and the declining USD starts to fuel inflation, we will begin to flip over into a nasty inflationary cycle. That's my hunch anyway. Lots more ups and downs in this crisis.

Jan 18 09:30 PM

[L Boyd:]

My problem with UDN is that, as far as I can tell, it doesn't short against the dollar by going long the Chinese Yuan - which, IMO, is the most important one. It does, however, go long the Euro and the British Pound which is very troubling indeed as both of these currencies are probably worse off than the dollar.

Does anyone know of any other similar short USD investment vehicles that include the Yuan?

Jan 22 05:29 PM