Minyan Mailbag: Bernanke and the USD
Editor's Note: Minyanville is a community of people who share an interest of fiscal literacy. As perspective is an important aspect of our daily routine, we share this email with hopes that it adds balance to your process.
Dear Prof. Reamer,
I am just wondering how you reconcile your bullish view of the U.S. dollar and your bearish opinion of Fed-head Bernanke? If Bernanke's printing press is going to usher in economic pain, won't the U.S. dollar be the primary victim?
Thanks for all of the insightful commentary.
Minyan Jeff Diamond
As with most things in life Jeff; it's all about timing. Long term I am extraordinarily bearish on the US Dollar (and Bernanke et al); they are now and will in the future be vigorously planting the seeds of hyperinflation. But that harvest won't be sown for several years because the secular forces of deflation are so strong (which will help the USD appreciate vis-a-vis other currencies). Once those secular forces of deflation abate (end of the decade is a good guess) the nascent hyperinflationary forces will start to grow. THAT is when the absolute bottom starts to fall out from underneath the USD. Till then, I suspect the EU vote, a significant economic weakening in the rest of the world, and diminished risk appetites will provide a nice bid to the USD.
n on this website solely reflects the analysis of or opinion about the perf=
ormance of securities and financial markets by the writers whose articles a=
ppear on the site. The views expressed by the writers are not necessarily t=
he views of Minyanville Media, Inc. or members of its management. Nothing c=
ontained on the website is intended to constitute a recommendation or advic=
e addressed to an individual investor or category of investors to purchase,=
sell or hold any security, or to take any action with respect to the prosp=
ective movement of the securities markets or to solicit the purchase or sal=
e of any security. Any investment decisions must be made by the reader eith=
er individually or in consultation with his or her investment professional.=
Minyanville writers and staff may trade or hold positions in securities th=
at are discussed in articles appearing on the website. Writers of articles =
are required to disclose whether they have a position in any stock or fund =
discussed in an article, but are not permitted to disclose the size or dire=
ction of the position. Nothing on this website is intended to solicit busin=
ess of any kind for a writer's business or fund. Minyanville management=
and staff as well as contributing writers will not respond to emails or ot=
her communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.<= /p>
Daily Recap Newsletter