Don't Like a Weak Dollar? Might as Well Get Used to It

[dkf]

Weakness in the US dollar, which is causing everything to go up—including gas prices, food and stocks—is unlikely to go away soon as a selling frenzy hits the currency market.

CNBC.com
The greenback is approaching pre-financial crisis lows and threatening to smash through its all-time low when measured against the world's predominant national currencies.

A combination of factors accounts for the weakness, with the Federal Reserve's easy-money policies, huge national debts and deficits and the consequential possibility of a debt downgrade because of the financial mess in Washington leading the way.

In short, as trader Dennis Gartman noted Thursday, "the rout of the US dollar" is in full effect.

"Panic dollar selling is setting in," Gartman, a hedge fund manager and author of "The Gartman Letter," wrote in his daily commentary. "This may carry farther than any of us dream of or, worse, have nightmares of."

http://www.cnbc.com/id/42703813

[dencol]

1. Just until QE2 stops.

It seems deflationary pressures are going to be a much bigger soon once the printing presses stop. With unprecedented numbers of dollars being destroyed by loss of home values, lines of credit, reduced wages, etc, it doesn't seem like this will be much of a concern for long. After all, the dollar is the worst currency, with the exception of everything else.

[DCKit]

2. +1 nt

[girl gone mad]

4. I think you're half right.

Deflationary pressures are still overwhelming our economy. Monetary stimulus has been a dismal failure and fiscal stimulus was far too weak.

I disagree with your assessment of quantitative easing. It's an easy scapegoat since most people don't really understand what exacty the Fed is doing, but QE/QE2 is ultimately an exercise in futility. Money was not actually being printed, and it was definitely not pumped into circulation, but liquidity was increased, fueling the 'risk on' trade (big time speculation).

Those who are genuinely concerned about dollar devaluation should be demanding higher taxes, but I never hear the inflationistas making that case so it's difficult to take them seriously.

[Dj13Francis]

3. I read this over the weekend.

http://www.zerohedge.com/article/china-proposes-cut-two-thirds-its-3-trillion-usd-holdings

Today, if you have any savings, take it and buy all the silver you can. And hang on tight. This is gonna be a bumpy ride.

davidjamesfrancis.com