US Dollar Index and Japanese Yen are going to 90

Most of my current fx exposure are on the yen, usd and cad. I plan to stick with this because I'm suspecting USD index and the yen are going to 90(3-9 month outlook here)
They are rallying on risk aversion and fear, the yen apparently because of the carry trade and the dollar because of the safe haven status and repatriation, since I think things will get worse from here it looks clear that they will keep rallying inspite people expecting the USD to go under because of the debt and the deficit explosion. One thing I'm looking at is the treasury market, it sold off some days last week, thats not good but I believe this is temporary

thoughts?

 

your intuitive thought is on target. in a panic it will be 90 yen/$ very quickly. if not a panic it will more slowlyreach that target.

 

Very, very worried about the socialist policies the US is heading for in the next 4/8 years. Assuming we have a down economy for some time, the only way we can pay for stimulus payments/ future bailouts, and other spending programs is by printing money. While I can't speak for the Yen specifically, the usd's rise could easily just be a short squeeze in an overall long term devalution. I think the fear of a Euro collapse and a worldwide recession are actually already priced in. If i had a long position in the usd index, I would def be taking profits if you look at the big picture. But maybe i am wrong

 

Citifx is coming out saying the same thing
http://www.hemscott.com/news/static/tfn/item.do?newsId=68240588026612

the JPY im quite sure wil outperform the USDindex, the USD is more risky. But I think we could have a 'soros' situation here, everybody and their mothers are focusing on what mattered in the past 'easing of fed funds' and current account. they dont seem to be focused that carry might not longer matter and developed world safe havens will prevail over riskier countries. the question becames how much of a hit the dollar will take with huge deficits

 

if the crisis recedes, NO
if the crisis continues, definitely yes.

 

Treasury sell-off is recapitalisation of the banks. They borrow short and sell treasuries pocketing the spread in rates.

 

If McCain wins the election look for dollar and stocks to go down, keep your stops close.

 

The dollar and equities down

So what are people putting their money in, or are they holding cash? Gold maybe?

 

Bernanke gave green light for more stimulus packages and the dollar held up strong. stocks soared and yet bonds went up as well. This could mean deficits wont mean anything for the short-run