Here is part of article on why the dollar will end it's reign as the world's favorite currency.Found at www.museletter.com.
The other likely trigger would be a collapse of the US economy from within resulting from a bursting of the mortgage bubble. The recent US economic "recovery" arose almost entirely from low mortgage rates (set ultimately by the Fed), which allowed families to refinance their homes, cash out some of their equity, and use the money for immediate consumption. With oil prices soaring, the Fed will eventually have to raise interest rates steeply in order to contain inflation. But this may cause millions of homeowners to default on their currently low-interest adjustable-rate mortgages. In that event, property values would plummet, and with them would go the stock market and the economy as a whole.
LMFAO!!! The world knows if the dollar goes down it's screwed. They will support it or the entire world's economy is going into the crapper, just as our strong dollar policy in the 90's lifted the world economy out of it.
It's funny that all the people who were bitching about us losing our manufacturing base are now bitching about a weak dollar and inflation risk.
Perhaps you've been travelling to the deepest of Amazon jungles to not know that oil price has declined steeply from $56 to low 40's in just a few weeks.
I posted at that time that the HB's would rally strongly since oil price had been artificially pumped up by new hedge funds with huge fresh money flow. Those inexperienced hedgies couldnt find any good trade but on the commodities market. The result was ugly; the inexperienced got killed buying the "uptrend" at $50's with largely leveraged money.
If you want to invest/trade, listen to the markets. Dont listen to the stupid newsletters who have been preaching doom-and-gloom since 2000 tech bubble burst. Certainly there are sectors of economy that are growing nicely. Those newsletters and the perma-bears have been losing shirts since the 1980's. Sooo, how do they keep their shirts (i.e. still make money)? BY SELLING EXPENSIVE BUT STUPID ADVICES TO UNINFORMED CASUAL INVESTORS.
To add to that, oil is only expensive in dollars. It's much cheaper in Euros, Pounds, and Yen.
Bears do on occasion make money, but if you look at the average length of bullish periods to bearish ones, being bearish is an uphill battle.
If someday when people realize they are buying companies instead of stocks, they'll think these things through a little more from a profitability standpoint rather than Vegas odds. There are macroeconomic forces that affect profitability both positively and negatively. But to place your "bet" or investment decision entirely on those forces is flawed thinking.
More money is lost on Wall Street by paying too much for a company than is lost by deteriorating business climates. But hey, that's what makes the candlesticks on a stock chart.