In this interview via Reuters, Mr. Rogers talks about his desire to short treasuries (eventually), which he says will be “one of the great shorts of our time”. Also discusses why he’s currently long the dollar, and why the world needs a “controlled disaster” before something much more volatile inevitably occurs.
Iraq has not done so well post-“liberation”, at least when it comes to life expectancy. Will Libya fare better? I certainly hope so, but remain skeptical of this endeavor. The War Nerd offers quite a non-traditional take on Libya, over at ex-Taibbi haunt The Exiled.
Please bear in mind that the DX dollar index will become increasingly irrelevant because of its outdated structure, heavily weighted to the euro yen and the pound, to the exclusion of the emerging currencies and the precious metals.
The shorter term chart has been rallying largely on euro weakness. We might see another eurodollar short squeeze if things continue to deteriorate in the European banking system.
A stronger dollar is something that the wealthy and the financial sector may enjoy, to the detriment of the rest of the country and any hopes of economic recovery. However the realities of things make a stronger dollar problematic.
So the next best thing is to slowly devalue the dollar by printing money and selectively distributing it, with tax benefits, to the most powerful and fortunate members of society.
In a ‘free market’ for currencies the dollar would have been much lower by now because of the persistent trade deficit, and the enormous dollar balances held by some of her trading partners.
The financial engineers favor a slow decline so as not to disclocate any of the major banking concerns. The currency discussions between China and the US are political theater for their respective peoples and the currency tourists, i.e. the small speculators who provide a snack for the wolves.