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  • 3 Stocks That Benefit From Cheap Dollars
    Screens by Jack Hough (Author Archive) 3 Stocks That Benefit From Cheap Dollars

    To the short-sighted, the dollar’s decline over the past seven months is a panic. An index that tracks its value against those of six key currencies -- including the yen, euro and British pound -- has fallen from 89 to 75. To those with a slightly longer view, the decline is merely a return from a panic. The index jumped from 71 to 89 between March 2008 and March 2009, as financial markets deteriorated and the world hoarded U.S. Treasury bonds.

    An even longer view shows the dollar is indeed in a humble state, if not quite a shattered one. The dollar index is based on a starting value of 100 and a starting point of March 1973, when the world’s major trading partners permitted their currencies to float freely against each other. (For index values prior to the euro’s introduction in 1999, predecessor currencies like the French franc, Dutch guilder and German mark are used.) Thus, the buck has been only slightly weaker and a lot stronger.

    Last month I argued that the U.S. dollar now looks undervalued next to rival currencies, based on comparisons of local purchasing power, and that America is in no worse financial shape than its rich peers. If the dollar is to remain cheap for a while, though, expect U.S. firms that sell overseas to benefit, along with their stockholders.

    Oct 28 12:43 PM | Link | Comment!
  • The World's Biggest Money Printer
    he USD still remains the leading reserve currency ( is the most widely held). However, central bankers are slowly decreasing their dollar holdings.

    In a crisis, people flee to the dollar. This was true in past crises, but I am doubtful it will remain true going forward.

    Because nearly every country is printing currency like its going out of style, NO fiat currency is a safe form of holding wealth. Fiat currencies have always been risky. They have become even more risky since the global flood in liquidity. The dollar is vulnerable to devaluation, but so is the Pound and Euro. Putting 100% of one's wealth in Dollars is very risky.

    As a side note: Due to rampant printing, money supply has exploded in the Dollar and Euro and Pound at roughly the same amounts (within 10%). That having been said, due to rampant growth in Federal Debt, I think that the Dollar is fundamentally weak.

    Who is the biggest printer of them all ?

    Surprisingly, it is the Chinese. They have had the largest recent increase in monetary base of all the important currencies. By far, China has printed more currency and has expanded its monetary base much more than the Western Economies.

    Surprisingly, the Yuan still remains undervalued and China is experiencing 6-7 % deflation. If the Brits, Europeans and/or Americans printed money like the Chinese, we would almost certainly experience high inflation.

    Oct 21 9:22 AM | Link | Comment!
  • The Top 10 Housing Markets for the Next 10 Years <snippet>
    The Top 10 Housing Markets for the Next 10 Years Home prices in these 10 cities will appreciate handsomely over the next decade

    By Luke Mullins

    Posted: June 4, 2009

    With home prices at the national level down a painful 32 percent from their 2006 peaks, it's easy to overlook real estate's benefits as a long-term investment. But the truth is, despite the ongoing housing bust, the overwhelming majority of America's real estate markets will appreciate over the next 10 years—although some more handsomely than others. "In the long run—subtracting from the ups and downs of the business cycle—house prices should grow at the rate of household income," says Mark Zandi, chief economist at Moody's "If people's incomes are rising, then they will buy more housing and house prices will rise." Income growth, in turn, is linked to the strength of the area's economy. Moody's


    Oct 16 10:19 AM | Link | Comment!
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