Apr 242010
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Since December, the dollar has risen 9% against a basket of currencies.
Versus gold, it has risen about 1/3 of a percent. Is the dollar rallying or are other currencies falling at a faster rate?
The chart to the right takes a long look at the dollar. Does it make you believe that a) the rally is real?” or b) the dollar is one sick puppy?
Comparing the dollar to other currencies is like comparing particles in a septic tank. At any point in time, one particle may be rising or falling vis a vis another particle. But so what! We all know what is in septic tanks.
Your septic tank analogy is accurate.
I am still shorting the dollar by holding two Canadian companies in my US margin account: ABX (gold miner) and ERF (oil and gas). So far this carry trade has netted me some nice profits. You know that the dollar has fallen to parity with the loonie recently.