Fighting Yoda

Is the U.S. Dollar Headed for a Mighty Crash? Part I

We are certainly heading towards dollar debasement, just a couple of headlines today:
Timothy Geithner - "Obama administration is committed to reducing the federal budget deficit after concerns rose that the U.S. debt rating may eventually be threatened with a downgrade."
Pimco's Bill Gross: "U.S. eventually will lose its AAA grade. "

Strength of currency is dependent on credibility of the US Govt. and its policies. US has abused its power as issuer of reserve currency - world feels deeply cheated. Japanese Yen has appreciated from 300 Yen/$ to now 100Y/$ over last 20/25 years, how do Japanese feel. Same with China now - Yuan had to appreciate 20% in last 2/3 years. So our trade partners keep losing money by holding $s. They would realize the folly and engineer an exit - will not happen overnight, but China definitely is taking definite steps towards that.

Creditor nation’s currency are sought – that is how Britain gained and then lost its position, and now US too will.

Burst Bubble? Commodities' Long-Term Story Remains Intact

Commodity is good long term story, however we have the speculator unwind. Commodity markets are very very small as compared to equity markets - speculators can drive them up very easily. That is what was happening last few months. Now banks are asking hedge funds to deleverage (calling back loans). So the bubble prices that were rercently seen in oil, gold, Ag etc are gone for some time now. All these china/India demand stories extremely over blown.

Wait for major pullback and play long term.