Bo Peng

U.S. Dollar Can and Will Drop

Everybody has her own investment philosophy. Mine is not to try to pick the top/bottom, but follow the trend.

I think USD will drop once the world economy stabilizes. In the interim it depends on the timing of events. The current rally is based on the premise that US economy will rebound ahead of Europe/Japan. But even if this turns out to be true, USD will drop once the cloud clears over Europe/Japan, which could easily be a year away.

That said, I'll let the market tell me what to do. Everybody knows about the Turtles by now. Even idiots can use it. But I'm not sure how many people really get it AND have the capacity to follow it.

Good luck!


On May 01 02:36 PM Just Say Whoa! wrote:

> >But I'll be ready to flip USD in short order going forward.
>
> What's the "BUY" indication?
>

U.S. Dollar Can and Will Drop

Not sure about supply destruction, Mashuri. The capacity in Germany, Japan, China, and Korea has been reduced, but not damaged, not unless the depression lasts a few more years. If inflation does surge as expected, it'd be due to pure monetary factors rather than supply and demand of goods/services.

U.S. Dollar Can and Will Drop

I'd like to add one point: as a commenter pointed out, USD devaluing is not all negative. It could stimulate jobs and export. But such a transition would require a fundamental transformation of global finance and trade, as well as the economic structure in the US. Abrupt changes would be disruptive and even destructive. After Fed's QE, the chance of abrupt USD devaluation some time within the next year or so has increased dramatically.

U.S. Dollar Can and Will Drop

Excellent analysis, Stephen. The race to the cliff -- competitive QE -- is just waiting for the sound of next shoe dropping.

In a way it's unfair to US. UK and Japan started it way earlier. But once Fed did it, now the moral inhibition against QE has disappeared. Instead of being the last resort, the world will consider QE the first choice when the next crisis trigger event hits, if only to protect their self-interest. A classic example of Prisoner's Dilemma.