"...it appears that "everybody" knows the greenback is the best choice for safety, quality and security.
But is that really the case? To me, the dollar is looking more and more like a colossal short that could wind up being one of the biggest moneymakers of the year for traders gutsy enough to take a stand.
From Leader to Laggard?
Given that the dollar soared 11% through the end of May (see accompanying graphic), I'm sure some experts will call me crazy for going against the dollar at this point in history. But here's my thinking:
•Our $14 trillion fiscal hangover, weaker-dollar policies and increased spending will lead to additional dollar weakness in the immediate term. Longer-term, this is a foregone conclusion: The high debt load relative to U.S. gross domestic product will erode growth - studies prove this - and all the extra money that we've printed will fuel inflation, as always happens..
•Foreign central bankers - especially China - are actively diversifying away from dollar reserves and dollar-denominated securities. They can't and won't "dump" the dollar in a wholesale manner. But this shift away is nothing less than a long-term decrease in demand for the dollar - and we all know that when demand for an asset declines, so does its value.
•The Organization of the Petroleum Exporting Countries (OPEC) - and what's left of the non-OPEC nations - are still pressing for non-dollar-denominated oil deals. Expect some of those deals to take place in the wake of the BP PLC (NYSE ADR: BP) Deepwater Horizon disaster, which will bring about major regulatory changes and cause onshore reserves to command a major premium. This group, incidentally, isn't to be dismissed, given that it contains such heavyweights as China, Japan, Russia, most of the Arab nations and, of course, France"
at http://www.marketoracle.co.uk/Article20191.html
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