A Jaded Joe

How the Dollar's Continued Rise Affects Exports

You may be right short term, but I am a dollar bear on a 6 month view. The Treasury is launching US$1 trillion in new issuance in many different maturities. Who will buy them? China or Asia? Unlikely. Over here China is desperate to keep its economy from sliding into recession, and may need to actually convert some of its existing forex reserves to renminbi. They are far and away the largest foreign holder of US government securities, and will see their appetite wane significantly as US issuance goes up. As go T-bills, so goes the dollar.

Once this temporary period of 'flight-to-quality' herd mentality relaxes, the dollar will go the other way again.