Is the dollar heading for a fall in the future? Depend on whom you talk to. Even economic gurus never always get it right, the legendary Keynes himself got almost wiped out in the crash of 1929. More recently, LTCM with its array of Nobel prize winning economists made some wrong bets leading to the global crash in 1998. Their idea of converging government bonds was essentially correct, but what they didn't realize was what Keynes had said earlier: "although markets do tend toward rational positions in the long run, "the market can stay irrational longer than you can stay solvent."
Well whatever.
Warrent Buffett and William H. Gross, managing director of PIMCO are betting against the dollar.
Niall Ferguson, has some interesting analysis where he talks about china financing the twin American deficits on its budget and current account.
Jim Jubak of MSNBC fame talks about how speculative excesses had built up due to low interest rates (cheap money) the world over and how the rising bond prices point to a slowing economy.
On the contrary, a motley collection of foreign observers point out the optimistic side for the US economy here.
All this is good reading not just from a personal investment perspective, but from a globalization perspective as well. Its really exciting how the world is coming together due to vastly improved technology and fiscal infrastructure.
More about this and maybe also about the housing bubble in the coming posts.
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