The coming US dollar crisis Message Board

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Strategies & Market Trends : The coming US dollar crisis

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To: RockyBalboa who wrote (3101)	12/28/2007 7:41:22 AM
From: Real Man	Read Replies (1) of 71456

Barring a large derivative meltdown, the carry trade will certainly continue to rule the currency markets in the immediate future and maybe beyond. The World Feds will certainly continue to fight systemic meltdowns such as the carry trade meltdown. So, here we are - the dollar must go down over the next year even against the Euro, unless the ECB or Fed policy changes. Derivatives are completely obscene, and must melt down at some point like all pyramid schemes do. However, it is impossible to predict that event. Well, either that or the World CBs flood the World with money. So far the latter happened whenever the threat of carry trade meltdown materialized, and I think it will keep happening. Such cash floods cause the derivative pyramid to grow and become even more powerful. How much further can interest rates and currency swaps grow? 1 quadrillion? 2 quadrillion? Good question. I have no idea. My guess is that an acceleration of the dollar slide, unforeseen by authorities in Basel, Switzerland, may be the eventual cause of derivative pyramid meltdown.

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