Skip to search.

Falling U.S. Dollar: It's Lack of Demand, Not Rising Supply, Pharo's Dow Says

Posted Nov 17, 2009 11:37am EST by Heesun Wee in Investing, Recession, Banking
Related: ^gspc, ^dji, dia, spy, uup, udn, tbt

When it comes to the collapsing dollar, hedge-fund manager Mark Dow is a contrarian. He doesn't blame the Fed. 

Those dollar bears that do take aim at Chariman Bernanke are, "right in terms of the direction of the dollar, but for the wrong reason," says Dow, who manages $2.5 billion at the hedge fund Pharo Management.

Dow notes the Fed is not tirelessly printing money and debasing the dollar as many think. The Fed balance sheet has remained relatively steady at about $2.1 trillion since October last year.

But wasn't there a big spike leading up to that period and thus overhang?

Standing by his thesis, Dow adds the shrinking dollar instead reflects a drop in money demand as the world deleverages and diversifies.

(Next time you're on holiday overseas, see if the cabbie wants greenbacks or their local currency.)

Currency diversification didn't happen overnight. Countries gradually have been diversifying their holdings outside the dollar, which is falling back to its weakest international level since the 1960s.

Click here for Henry's take on Bernanke's secret plan to raise rates too late. (Faster economic growth and erosion of real value of our debts.)

 

 

 

 

 

 

 

 

 

Go to Tech Ticker

There are no comments yet

Post a comment

Sign in to post a comment, or Sign up for a free account.
Quotes delayed, except where indicated otherwise. Delay times are 15 mins for NASDAQ, NYSE and Amex. See also delay times for other exchanges.

Quotes and other information supplied by independent providers identified on the Yahoo! Finance partner page. Quotes are updated automatically, but will be turned off after 25 minutes of inactivity. Quotes are delayed at least 15 minutes for NASDAQ, NYSE and Amex. See also delay times for other exchanges. Real-Time continuous streaming quotes are available through our premium service. You may turn streaming quotes on or off. Fundamental company data provided by Capital IQ. Financials data provided by Edgar Online. Historical chart data and daily updates provided by Commodity Systems, Inc. (CSI). International historical chart data, daily updates, fund summary, fund performance, dividend data and Morningstar Index data provided by Morningstar, Inc. Analyst estimates data provided by Thomson Financial Network. All data provided by Thomson Financial Network is based solely upon research information provided by third party analysts. Yahoo! has not reviewed, and in no way endorses the validity of such data. Yahoo! and ThomsonFN shall not be liable for any actions taken in reliance thereon. All information provided "as is" for informational purposes only, not intended for trading purposes or advice. Neither Yahoo! nor any of independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. By accessing the Yahoo! site, you agree not to redistribute the information found therein.