I'm looking at an emerging market index and a ETF that tracks the same. Having completed a price study on both, It's been calculated that continuing strength in this emerging market together with weakness in the dollar is being sold on the US markets at a deep discount to the same compared to the offer price within the emerging market itself. To put it simply; Sellers of risk (I presume in the US), are selling risk on the cheap. The risk to them them being that the global economy remains strong. It puzzles me weather strong hands in the US know something everyone else does not, Or if, these players have mis-priced the risk? If we presume that these sellers of risk do have strong hands in the markets, then their prices indicate that they are poisoning for (a) weakness in emerging markets, and, (b) massive strength of the US dollar: into 2011. Looking at the US yield curve, we see positive signals over the last year, with a hint of flattening right now, and certainly a general expectation of further flattening before any potential major down-turn in the global economy. And that would be at odds with the positions of the strong hands. How can this be explained? If these strong hands are positioning to profit on a sucker rally in 2010, and then in 2011, by selling into a negative yeild curve and buying gold hand over fist into 2012, their future position - in the event of such a crisis -would be enviable to say the least. I find it particularly interesting that Japan has been talking up the strength of its own currency recently... as if that's going to help Japanese exports! Also I've noticed that a few alpha countries such as Indonesia are pushing bonds into their own retail markets. Other sovereign wealth funds are exiting the bond market altogether. In this respect, the "alpha" looks to be positioning itself for this eventual move also. Comments?