Use the Dollar Rally as a Shorting Opportunity

Anyone who understands the real reasons why the dollar has been getting killed over the past few years should also understand why any rally represents another chance to short it. It's called a bear trap – you know – similar to what we have seen in the US stock market. The fact is the dollar will not only remain weak for some time to come, but there is also SIGNIFICANT downside from here in my opinion.

Main Reasons the Dollar is Weak:

• Record US debt
• Record trade deficits
• Declining US overall competitiveness (free trade effects)
• High (underreported) inflation caused by Fed banking bailouts

These trends simply aren't going to reverse overnight. You'd be best advised to wait for the rally to top out then short the dollar. I like the Yen the most right now. You can buy the Yen/dollar ETF (FXY) to take advantage of this strategy.

For those of you who are just reading my article for the first time, I might suggest you read my previous archives so you'll better understand my position and track record.

Stock position: None.