US Dollar? Going Further Down?

[mecha]

Does anyone have any forecasts on where the US Dollar is heading?

[Ray Zee]

everyone. same as with the market. if they could be accurate they would be having lunch with george soros.

[maroondude]

In general, I am long the USD vs. every major currency except the JPY which could continue to firm up relative to the USD. In terms of the Euro, it has been at or near the all time high for the past few days. I think a sell off/ profit taking may be in the making and you could see retracement to the 1.25 level by year's end. Having said that the Euro has been trading in a very tight range since the election and the big boys and the banks are just waiting to push the market and knock out many smaller trader's stops. What I really like is the CHF which is trading at about 1.1775. Barring a major attack on the US or Palistine really heating up, this should be a very good buy.I am a registered broker, give me a call at work 1-800-371-3581 if you want to talk about this more.

[PhatPots]

I hope it goes up. I am from Canada and it kills my cash outs /images/graemlins/confused.gif I got 1.17 CAN for every US dollar the other day, insane! Very bad for the Canadian export industry, very bad indeed

[adios]

Bad for a lot of countries exports. Part of the Bush administration economic policy methinks.

[maroondude]

In terms of the USD/CAD it is down over 7.3 % for the year and sitting at or near its 12 year low. My guess is that given this there will be a strong rally for the USD over the next 6 months to a year. Given that the US will probably raise short term interest rates another 25 basis points in the next few months, I see a positive long term trend. Sorry that this has hurt your cash out status. If you want to hedge some of your exposure or speculate in the FX markets, give me a call 1-800-371-3581.

[laserboy]

Well Warren Buffett is sitting on about $20 billion worth of foreign currencies after never having invested in foreign currency for decades, if that means anything to you.

[arabie]

Really? Thats very intersting, do you have a news link?

[laserboy]

http://www.smartmoney.com/bn/ON/index.cfm?story=ON-20041105-000996-1915

[ QUOTE ]
Berkshire's foreign-currency position, which involves eight currencies and is widely referred to as Mr. Buffett's bet against the U.S. dollar, grew in value to about $20 billion, up from $19 billion at June 30.

[/ QUOTE ]

Here is an article of his written about a year ago (the dollar is down over 10% vs. the Euro since then):

http://www.pbs.org/wsw/news/fortunearticle_20031026_03.html

[Scuba Chuck]

If anyone has any serious interest in understanding where the dollar is going, spend some time studying the current account deficit.

The current account deficit is -5.7% of GDP. An All time high. The previous all time high was -5.0%. That was in 1929. The next high is -3.4%. That was in 1987. The dollar saw significant declines following those periods, besides the obvious stock market implications.

How far has the dollar fallen before? Well during the 1970's, the dollar lost over 70% of its value. With the likely coming oil shocks, I would consider the dollar depreciation a 90% likely probability over a 2-4 year time period. Next 6 months - who knows.

Is my money where my mouth is? Hell yeah.

[laserboy]

The fall of the dollar will be ugly not only for the United States but for the entire global economy. When you think about it, much of the global economy is built around selling crappy consumer goods to overleveraged American hyperconsumers. All the major currencies are flawed in one way or another, which is why guys like Buffett are holding like eight different currencies. That will make making money in this environment somewhat difficult.

It certainly sounds like we are on the same page though. Any good investment ideas or reading material suggestions? Right now I am holding a lot of mining, energy, and commodity stocks in addition to a number of value stocks that I have had for a long time. I have been building a position in FXI and am reading everything I can on China until I know enough to start picking individual Chinese stocks. I highly recommend both of Jim Rogers' books btw, "Investment Biker" and "Adventure Capitalist", and am really looking forward to his new book on commodities investing.

[Scuba Chuck]

Laser, it looks like you're on the right track already. Personally, I study the economy. I read articles, periodicals, subscriptions on the economy. It allows me to articulate my own investment ideas, and how I want to carry them out. Personally, I believe that WATER will become the best investment to own over the next 50 years. But I have been unsuccessful to locating a good investment idea in this area. Any ideas?

[Ray Zee]

buy yourself a vacation cabin on a river where you can get some senior water rights. you get to use it and have fun and become very rich someday, even if the water thing doesnt pan out. also you can just buy water rights.

[Benal]

Buy a few lakes up here in Canada. We have lots to go around LOL

[laserboy]

Interesting... Not sure I follow you on the water thing. How do you see that playing out?

Off the top of my head, I would have to agree with Ray and Benal. Real estate would be the most logical investment. Maybe investing in emerging frontier towns with ready access to waterways and governments that invest heavily in public works infrastructure? Farmland and agricultural companies in fertile undeveloped regions that will become the lost cost producers of fruit and vegetables (like tropical Africa)? If the world really does become one giant dust bowl, then areas with water will thrive while areas without will wither away. That's a long time off though, so hopefully I'll already be dead by then. /images/graemlins/grin.gif

[Scuba Chuck]

Very interesting insights. I'll buy into your ideas. But don't stop there. There has to be more...

For example, I would have been very interested in US Filter, but unfortunately GE gobbled it up. Do you think they see this very same trend?

Another idea is desalinization plants. Could this be a viable resource for drinking water?

Smith Barney has been writing about this since their first report in 1997. Unfortunately, depending on your age, you will experience this. Alas, it is no where in the near term, and for most of the MTV-attention deficit society, that is not close enough. (PS - I do not work for, or at Smith Barney - or Citigroup)

Some general themes to consider, research to be done on your own...

1) Unusual weather behavior of the Southwest United States. Recent reports reveal that for the last 60 years, region has been much more arid than the norm.

2) Pollution in China - discussed earlier

3) Public awareness in organic foods. A major trend. A slow, but most likely, a growing stock over the coming decade will be Whole Foods Market (Investment Idea - free, take it for what its worth). Many offshoots of ideas here - for example, preventative medicine vs. reactive medicine (read Western medicine here).

More to come, I'm tired from all the Turkey...

I invest to help me keep my money. To gamble, I play poker.