The coming US dollar crisis Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The coming US dollar crisis

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: DebtBomb who wrote (14851)	11/22/2008 10:25:44 AM
From: TheSlowLane	2 Recommendations Read Replies (2) of 71474

From what I understand, a lot of the demand for US Dollars recently has been driven by hedge funds selling off foreign investments to meet redemption demands. The proceeds for those sales are converted to USD and then repatriated to meet redemptions. Another source of demand has been the foreign institutions that loaded themselves up with US agency paper (Fannie/Freddie). They put on USD shorts as a hedge against all that paper they had bought. As the value of that paper diminishes or as they sell those positions down (or both), then the size of the hedges need to be reduced proportionately. That means covering the USD shorts, which drives demand for USD. This scenario is different than buying USD for fundamental reasons and once it has run its course, then the USD is likely to resume the trajectory described by Mr. Schiff.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next