The Dollar Has Bottomed

Or rather, it bottomed about 2 weeks ago. How do I know? I´m living in Spain, and about 2 weeks ago, three Americans started talking about how the dollar will keep going lower. They were talking about "making some money off it."

These people aren´t traders and don´t even follow any sort of market, yet they´re talking about shorting the dollar. This has to be like the truck driver daytrading right before the bubble popped in ´99.

 

Warren Buffett also thinks the dollar is going lower. I know that doesn't mean it will happen, but he has made some money in his time.

 

JML -- I didn't read the shareholder letter -- did he say that in the letter? I know he said so previously, but haven't seen his latest comments.

Thanks...

 

"three Americans started talking" in Spain does NOT mean the USD has bottomed.

The dollar is on a 5 year slide just like it did a few years back (fact). It has at least another 2 to 3 years to go.

Remember the upcoming 44 trillion dollar hole.

Buy yen. Hold yen. Get rich.

Sam

 

Buffett is holding 12 billion units short USD.

From the NY Times:

"Warren E. Buffett, the billionaire investor, has a $12 billion bet against the United States. Mr. Buffett said over the weekend in an annual letter to shareholders of Berkshire Hathaway Inc., his holding company, that he began investing in foreign currency for the first time in 2002 and expanded his positions in 2003.

"By the end of 2003, Berkshire Hathaway held foreign-exchange contracts valued at $12 billion that were spread among five unspecified currencies, he said in the letter, which was released on his company's Web site."

 

Somehow I doubt Buffett will give advance warning before he takes profits.

 

Yeah, well, nothing he indicates has changed in the structure of why he shorted USD to begin with. The market price probably hardly fluctuated during his short in and probably won't reflect his cover.

Sam

 

Maybe Buffet is letting everyone know he's short so he can
get someone to take the opposite side of his trade when he
covers.

 

Nah, stats put losing traders at 99%. He'll have no problem finding anyone to take the other side.

 

OK Sam, now your're talking. That makes sense. Stating that we are in a secular down market is a valid arguement. I'm happy you are off the Japan controls the world kick in this forum.

Remeber, Japan wants a STRONG dollar in every way possible (exports and value of holdings in US). There is nothing they can do about it though.

Jay