dollar collapse

[jjf]

I suppose eventually the demand to liquidate every toxic asset must come to an end and the dollar will resume it's downward journey.
The question is when is this likely to happen

in a month
3 months
6 months
a year or more

what are your thoughts

 

[makloda]

My thought: What if it doesn't happen?

 

[empee]

If your liquidating every 'toxic asset', and since the dollar is the world reserve currency (and of course the one for the USA), wouldn't that put more demand for dollars?

ie, to sell an asset you are exchanging it for dollars.

In this case, the more assets sold, the more bullish for USD, since people are moving away from "assets" (sell) and wanting cash (buy USD)

If so, what asset would people move their dollars into to weaken it?

Alternatively, will the US govt rint enuff to offset the hoarding behavior of people.

 

[jjf]

Quote from empee:

If your liquidating every 'toxic asset', and since the dollar is the world reserve currency (and of course the one for the USA), wouldn't that put more demand for dollars?

ie, to sell an asset you are exchanging it for dollars.

In this case, the more assets sold, the more bullish for USD, since people are moving away from "assets" (sell) and wanting cash (buy USD)

If so, what asset would people move their dollars into to weaken it?

Alternatively, will the US govt rint enuff to offset the hoarding behavior of people.

Exactly, but the selling of assets and hoarding of cash will end, it always does.
But when?

 

[dt.trader]

It will be up 30% plus within next 3 months. Just check out a spy-vs-oil chart.

 

[jjf]

Quote from dt.trader:

It will be up 30% plus within next 3 months. Just check out a spy-vs-oil chart.

Why makes this a directional indicator of the dollar

 

[Ivanovich]

Quote from jjf:

Exactly, but the selling of assets and hoarding of cash will end, it always does.
But when?

You're contradicting yourself. First you say that all toxic assets will be liquidated, and then you say the hoarding of cash will end. The liquidating and deleveraging is causing a run to dollars.

What currency do you think will be better off once this is done?

 

[tradersboredom]

foreign investors are looking for USD because owning USD is like owning assets based on USD.

USD is in high demand as lots of assets are in USD

USD could be like the EURO, all the other currencies 'peg' fix their currency to the USD

Quote from empee:

If your liquidating every 'toxic asset', and since the dollar is the world reserve currency (and of course the one for the USA), wouldn't that put more demand for dollars?

ie, to sell an asset you are exchanging it for dollars.

In this case, the more assets sold, the more bullish for USD, since people are moving away from "assets" (sell) and wanting cash (buy USD)

If so, what asset would people move their dollars into to weaken it?

Alternatively, will the US govt rint enuff to offset the hoarding behavior of people.

 

[tradersboredom]

inflation is tame in the US compared to other third world countries who have inflation at double digits.

Quote from Ivanovich:

You're contradicting yourself. First you say that all toxic assets will be liquidated, and then you say the hoarding of cash will end. The liquidating and deleveraging is causing a run to dollars.

What currency do you think will be better off once this is done?

 

[Ivanovich]

Quote from tradersboredom:

inflation is tame in the US compared to other third world countries who have inflation at double digits.

Ok, what does that have to do with my question or the OP's comment?