Faisal Humayun

Jim Rogers Predicts Dollar Collapse, 'Inflationary Holocaust'

For sure the long term trend for the Dollar is downwards...But In my opinion we might not have hyperinflation...We might have very high inflation...This will force the Fed to push up interest rates...This in turn would increase the interest payment on U.S. debt significantly...maybe at one point of time we will have the entire tax payer money going in servicing debt...Then the Government will print more money and that would lead to the demise of the Dollar...

But as Marc Faber says, the Dollar demise might be associated with some kind of major war...

Dubai's Debt Woes Could Further Unhinge U.S. Commercial Real Estate Sector

Through the present policies, the Government and the Fed are sure that they can solve almost any problem in the world by printing money...So, if we have more trouble, there will be some more money printing...

For sure the global economy is still on shaky grounds...The recovery in the economy has been largely lead by Government spending where the private sector is still shrinking or stagnant...The recovery in asset markets have been largely lead by easy money which has fuelled speculation on all asset classes...

Thus, things are just being made to look good and I would not be surprised if the Government comes out with another stimulus package next year to try and make things look even better superficially...

Why I'm (Cautiously) Optimistic About the Future

Its good to be optimistic...Its even better to be opmistic and realistic..The fact is that U.S. is the largest economy and will remain so for years to come...The reality is that things might not be really wonderful for years to come if the Government does not change some of its policies...

A greater emphasis needs to be put not on just Wall Street but on the common man who is struggling to maintain his standard of living...

A greater emphasis is needed not on more consumption but on saving and capital spending...

A greater emphasis is needed not only on cost saving by outsourcing jobs to other countries but on job creation through keeping jobs at home for the jobless...

What has zero interest rates done for the common man...what has the big stimulus package done for the common man...Americans need to ask these questions to themselves and then to the Government...

I am sure that the great country like America can still save itself if it changes its policies and if the Americans realize what is being done and what needs to be done...

Should Emerging Markets be Renamed 'Emerged Markets'?

For sure the standards of living is going up in the emerging economies and it is stagnant in the developed world or declining in some cases...

The emerging economies however still have a long way to go before then get even any close to the world's biggest economy...

But in general, it is a great time to be in China or India...

Economy Watch: Is There a (Second) Downturn on the Horizon?

The stimulus package has helped the economy grow when the private sector is still shrinking or stagnant...Thus, as the effect of the package wanes down, the economy will again start to look weak...

Warren Buffett said few months back that U.S. would need another stimulus package...I think that will surely happen sometime next year...I am not sure how great an idea that would be for the long run...But the Government has not done really great things so far...

Which Sector Will Be the Next Decade's Home Run?

In general, for any economy or markets, one should look for where the greatest challenges are...I think most of the great opportunities lie there...So if pure water is a big challenge for the world...it also has plenty of great opportunities...there are many other such examples which a common man can get from his day to day life and experiences...

Oil: Ready to Break Higher?

I think oil might correct in the near term...It is already up over 100% from it lows this year...Moreover the Dollar sentiments are very bearish and there is a long impending trend reversal in the Dollar (for a while)...This should be negative for all asset classes including oil..

So, in my opinion, oil might not go back to $100 mark so soon...But it should trend higher if interest rates are at zero and if there is a substantial recovery in the Asian economies...

JPMorgan Bullish on the Short Dollar / Long Beta Trade

I think in the near term it is a good idea to get bearish on the short Dollar trade...The sentiments on the Dollar are very negative...last time when we had such negative sentiments, there was a sharp counter rally for six months on the Dollar...I am not sure if it will happen for so long again...But in the very near term the Dollar should go up...

In the long term it should trend downwards...I think that a much easier call to make...

The Great Credit Crunch Is Deepening

There is no doubt that the public at large and the private sector are deleveraging...However, we have the Government which is leveraging...I think if that was not the case things would have been better off...

Moreover, in the present system, it is debt which creates money...So when banks are not lending the Government has to create the money in order to keep the huge debt servicing cycle going...

Historical Bull Market Returns, Duration Suggest More Upside for the Current Rally

Its always good to look back at history...it does give us some evidence as to where we are headed...However, the financial crisis has brought about lot of fundamental changes in the way things work...Moreover, we have a totally different scenario in terms of interest rates, stimulus packages, credit growth and many such factors...So by just looking at historical data and drawing a conclusion might not be good enough...

However, i must say that the markets should go up in nominal terms...I am not sure how much it will go up against hard assets...

Why You Can't Short This Market: The Expectation Ratio

shorting a liquidity driven market is always a dangerous idea...Things might look expensive but still go up...Moreover, there are a hell lot of people out there who are still skeptical about the rally...Generally speaking, when the sentiment is very bullish, it is the time to short...the same is not the case now...still you have many bears out there...

In March, no one wanted to put their money in the markets...Since then we have gone up more then 50%...So very bullish or very bearish times are the best times to go contrary...

We have none now...markets seem to be confused about the direction in which the economy is headed...

Is the Bernanke Doctrine a Disaster?

Actually if you look at whom high interest rates would have hurt the most...it might be the private sector to a large extent...High interest rates would have been good for a majority of the 300 million Americans...

Moreover, how has low interest rates benefited?

It has just helped big banks and IB's to get cheap money and speculate worldwide...I am not there in America but you will be able to tell me how has low interest rates benefitted the masses...

Also, I doubt there is no inflation in the U.S....I think an average household has at least 5% inflation...if not more...It would not be a great idea to take Government numbers...As far as I can see, healthcare cost is going up...insurance cost is going up...education cost if going up...and food cost is also going up...

I also think that if the government wants to do something then no amount of opposition can stop them...and if they dont want to do something then they take refuge in oppositions...So Bernanke would have lowered rates anyways...If he did not....some big players would have cried out...but it would have helped the masses...


On Nov 18 12:30 PM William M. Wright wrote:

> Good article. Many excellent educational comments.
>
> I do agree that as the article concludes "Mr. Bernanke, by working
> overtime in his printing press has ensured that the Dollar is no
> longer a store of value". But we must keep in mind it's not the Job
> of Fed. Chairman to maintain the USA dollars value. It's his job
> to maintain Inflation in check and to help the economy grow and employ
> workers. Inflation is in check but employment is not.
>
> While I agree with many of the negative comments against such an
> easy money policy and would add it comes at the expense of savers
> (with trillions in MMFs and low yielding savings accounts) Bernanke
> is just doing his job.
>
> Can you image what the press and public would now be saying about
> Ben Beranke had he said, "Hell no I will not lower interest rates"
> back in early 2008?

Trade Deficit with China Rises Again

I think China should have let its currency appreciate a long time back...I hope they do it now...As for U.S. the problem of deficits will remain and will grow larger as long as their policies target consumption...

They need to taeget capital spending and savings...They need to make their exports more competitive...The weak Dollar is surely going to help...But U.S. need to produce...

Consumer Sentiment Key Element of Today's Economic Calendar

The consumer sentiment has fallen yet again in today's report...Yet the markets are trending higher...In my opinion, the recent dips in consumer sentiment are indicative of the declining impact of the stimulus....

It remains to be seen what the Government does next...Stimulus package -2 can't be ruled out going by the past record of problems and actions taken...

The Fed's 'Extended Period' - How Long Is Long?

There is no doubt that the Fed would be very reluctant to raise rates so soon. The reason is that if the rates go up then the interest payment on debt will soar...That will create additional problems for the US...

Moreover, as far as I understand, the policies in US is still targeting consumption and not saving...Higher rates wouls still give some incentive to masses to save money...But zero interest rates would force then to spend or speculate....