Quote:
Originally Posted by JesseD
I would short! The US exports are increasing pretty dramatically. This should raise the dollar. OPEC, if it can, will start pumping more gas. Again, raise the dollar. The only thing at this point that could keep the dollar lower is lower interest rates in the US. But even that might not be enough at this point.
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Ooops!
It will take a lot more than "dramatic" exports to resolve the current problem and to even reach the increasing level of imports - and fat chance of that happening to a level which would raise the dollar.
OPEC are not the problem - there is enough gas. Oil is being used in hedge investments because the dollar is volatile. If that element of speculation did not exist oil would be priced around $50-$60 at the moment.
Gutty feeling - the Fed will reduce interest rates before the year end basically as a tool to keep a possible recession at bay. Sure, this may reduce the dollar, but the alternative could be far more damaging.
This is not a problem which started a few years ago - it's a massive problem which started almost 30 years back and triggered by home loans etc recently. It will take a decade or more so see the first signs of improvement - assuming someone actually starts addressing the problem now.