Friday, August 13, 2010

Don't Fight Slides Of Dollar Or Equities

If investing is about fundamentals, then currency investing is about betting on a country's overall health.  The U.S. dollar's slide is a sign that the rest of the world is discounting U.S. assets.  The next shoe to drop:  U.S. equity markets should soon follow the dollar down.  The increasingly jobless recovery is a forewarning for those who choose to listen.  We're not as bad as Greece yet but we'll get there soon enough. 

Any good news for America lately?  Well, a weaker dollar will help exports.  The Russian drought isn't the only reason U.S. grain exports are rising; a cheap dollar makes them more competitive.