PowerShares DB US Dollar Index Bearish (AMEX:UDN)

The dollar continues to be so strong that the Fed can confidently keep interest rates at essentially zero. Unlike Japan, which has been doing this for decades, the U.S. have the global might (particularly vis-a-vis the Euro) to pull this off for a very, very long time. For all the warnings from the goldbugs, inflation continues to remain a non-problem in American history, whose abiding themes are an overabundance of commodities and a shortage of labor. I'd be much more worried about deflation. However, I don't know about UUP as an investment vehicle, so I'll just red-thumb UDN with absolute confidence.

Inflation will kill the value of the dollar. Until the Fed stops printing money, I will have a green thumb on this.

Weak US dollar will continue.

End of QE2, end of gold and silver.

the dollar sucks and we don't have too much to back it besides tax & debt obligations. It's only a matter of time until something else takes its place in the world-- just like the euro being the currency of choice for the world petroleum sales

No!

Be careful when betting against the dollar.

While it's true that the long-term reality for the USD is that it will need to learn to live with a currency duopoly with the Euro, and maybe even SDRs (the IMF's currency) and/or renminbis in the future, at this point it still consists of over 60% of foreign currency reserves.

In the context of CAPS, it seems silly to me to pick UDN with the expectation that the dollar will fall faster than the S&P 500 will grow. The transition away from dollar domination is going to be glacial; hold your horses and bet on it for the long term.

Within the next 12 months, the U.S. Treasury will have to refinance $2 trillion in short-term debt. And that’s not counting any additional deficit spending, which is estimated to be around $1.5 trillion. Put the two numbers together. Then ask yourself, how in the world can the Treasury borrow $3.5 trillion in only one year? That’s an amount equal to nearly 30% of our entire GDP. And we’re the world’s biggest economy. Where will the money come from?

countries that default or appear to be a default risk don't have strong currencies

One of many currencies I have recently made an underperform call on.

If a currency outperforms the s&p for an extended period of time with this little leverage, it will be the new "American dollar" from a new global powerhouse with the military, economic conditions, tax base, stability, and political will similar to the U.S. China is my vote for the future global safehouse, but I can't see global investors trusting their capital with a communist regime. The consensus seems to be that the dollar will be slowly replaced by a basket of stable currencies, and as such, the S&P should outperform these currencies in the long run.

--Wh1sp

Contrarian pick. You almost never hear anything bullish about the US Dollar.

Slow economic recovery combined with excessive "quantitative easing" programs by the Fed will result in a decrease in prominence of the US dollar as a perceived store of value and international reserve currency.

With China, Russia, India, Pakistan, and Iran forming an official financial and military area to get America out of Eurasia there is no way the dollar will remain the world's reserve currency for long. When that occurs, UDN will soar higher than anyone can even anticipate. Good luck everyone! God speed!

greenthumb if 10/30 week MA crossover

Forex struggles

Every developed nation is racing to devalue their currency. My bet: Helicopter Ben will win by a mile.

I'm going long on the yen & yuan and shorting the dollar & the bond market.. From what I've been reading years of near zero yen money has fueled the carry trade. Japan can't sacrifice it's currency just to prop us (& many other currencies) up. As they raise interest rates carry traders who have borrowed cheap yen and reinvested in other equities will have to sell positions to pay back earlier than expected to avoid the increased payback cost against the gains they were banking on in their "safe" higher yield plays, like bonds & Tbills

The bond market is also now derivitve based because it is insured exponentially less it's than current multibillion dollar investment level. I've read 100 to 1 in some bear forecasts. If there are too many defaults the whole pyramid comes down.

I welcome comments on this strategy. My understanding is obviously pretty basic and rough but my gut (with Peter Schiff mixed in there) tells me this is a necessary hedge against my long plays especially US equities. I'm not looking to day trade these positions. I expect to see an initially slow gain over maybe months if I'm in the right vehicles. I'm still trying to figure out how to short the dollar directly against the yen but maybe some direction from the pros out there...?

(Thanks Abitare for sending me on this quest for info after I watched your recent posts of Youtube clips of Schiff predicting our current crisis with oracle like accuracy as early as 2006-and being riducled for it over and over by the other commentators)

US$ is junk. Enjoy the ride.

With the massive cutting of U.S. interest rates the Yen Carry Trade is coming to a sad end along with some of the companies who chose to leverage tons of debt and make stupid bets on the carry trade. But now we will see a coming Dollar Carry Trade into other higher interest rate currencies of the world and the long term effect of such actions will be a weaker USD.

Dollar is weak now!