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Beware of the US Dollar's Fake Rally
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Beware of the US Dollar's Fake Rally

Money – Don't mistake the U.S. dollar's recent rally for strength. If anything, it's a head fake of legendary proportions. In fact, the dollar's recent run-up is actually a warning that risks are escalating.

Tags: dollar, decline, rally, temporary, warning

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he so-called "dollar rally" is illogical, irrational and is unfolding at precisely the wrong moment - which means that many investors who are long on the dollar could get a nasty surprise if they don't temper their enthusiasm a bit in the months to come.

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We are facing the perfect economic storm falling real estate values, inflation, unmanageable person debt, record oil prices, falling dollar (long trend) and government debt that can't be serviced.

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I don't trade currency, but if I did I would be long the dollar at this point (against the Euro).

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I'm in it for the long hall. I don't have the fortitude to trade a lot.

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I think simonsez has a good point. The dollar doesn't need to be worth more in absolute terms to be worth more as compared to the Euro. It just has to drop at a slower rate.

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As for the fake dollar rally, how about the fake economy. The US economy is a paper tiger backed by, well- paper, not actual wealth or even cash. I suspect that the only companies that have actual cash on hand are big oil, big agri and big drug companies. The stock market speculates more then evaluates. The speculation is based on consumer consumption, 70 percent of our economy. Now that oil is a few months away from $200 per barrel, kiss the consumer economy bye bye. And then we'll actually see how the short "cash burn" cycle is as it becomes obvious that most US corporations have not real cash on hand and won't sustain a downturn. This is going to get ugly!

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The big boys are global.

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