PeakOiler

Massive Opportunity to Short the Dollar

No, no, no. The dollar is strenthening because credit is drying up. The credit markets create 'play' money, ie. US dollars, and when they are plentiful and growing, the value of that growing currency must drop. When that 'play' money (credit) is contracting (as now), the shrinking currency must rise. Credit is shrinking (in case you've been asleep for the past year) because the banks and near-banks are scared witless to lend, and consumers are hunkering down to pay of debt. Capice?

Only when credit begins to grow anew will the US dollar begin it's final approach to zero. When will that be? Perhaps after the coming bail out of Lehman Bros. These bailouts are extremely inflationary in the long run. In the short run, they shore up the Republican base for the vote November 5th, 2008, to no avail, Sarah (Pitbull) Palin notwithstanding.