The Return (for now) to the dollar

I've been hearing for some time now of a return to the dollar in my industry. We've seen the signs of this as foreign investors race to buy dollar-denominated assets stateside as a hedge for worse to come.

I'm in commercial real estate, and while we are still suffering, don't tell that to the Germans or the Chinese or even some of the middle easterners, who have been quietly buying up distressed properties with long-term holds in mind.

Anecdotal is one thing, but I think this story, in my mind, is a harbinger of things to come: Iran is converting some of its holdings to dollars and gold.

In essence, they're practicing Depression economics. Regardless of our debt, right now, Treasuries are considered one of the safest harbors to invest outside of precious metals.

reply to post by behindthescenes


It doesn't sound like that to me.

They are basically double shorting Euro and hedging themselves with the dollar.

They are basically hedging themselves in the longrun, which is obviously pretty smart. In the long run when the dollar gets higher gold goes lower and vice versa. Right now we are seeing a divergence, but this is temporary and they know this as well.

Gold is fueled by retail buying * me included * and if you study commodities this is the run that all commodities have at least once in their history. It is just "gold's turn" literally.

When this gravy train ends for gold it is going to take the elevator down and fast. Just don't be last in line to get out when JP and Friends decides it is time to drop the hammer.

See

1)Lumber

2)Sugar

3)Tulips

4)Oil

5)Corn

6)You name it




[edit on 2-6-2010 by GreenBicMan]

reply to post by GreenBicMan


Off topic; but everytime I read your signature I have to laugh for a few minutes.

reply to post by CORN IS NUTS


It is funny, and if you saw the original thread it is WAY more funny.