Buy, Hold or Sell? The U.S. $
Once upon a time in a land called Back Then...there was a currency. A piece of fiat loved and respected throughout the world. The almighty U.S. dollar opened doors and brought greasy sweat beads to the palms of those who saw as much as a single Andrew Jackson in their future.
So popular and respected was the mighty greenback, we had to come out with a whole new line due to all the copycats. These tricksters with their printers made the literal "making" of dollars and industry all it's own. If only they had gotten an internship with Greenspan, things may have been better for all of us.
Funny how times have changed. The faces that once lit up at the sight of U.S. currency are now turning to dead stares and dismissive mumbles.
The situation can be explained by multiple factors, related to the far different global and domestic economic environment of the past decade. The real question, however, is how long will the dollar flux last? It is not just the Fed's policy which effects the currency issues playing with the dollar .
It seems that the U.S. having so little competition in the financial realm for so long is a prime factor (not discussed or recognized) our spastic monetary confusion. More and more I feel like we are following the trends of others, rather then setting our own. Something our bumbling regulators refuse to address. Something they refuse to even acknowledge.
Whenever their is a lone dissenter in any situation, I tend to want to hear him/her out. Whenever someone dissents to Fed policy, my ears perk up even more. When that person is Tom Hoenig I put down my coffee and focus all my attention.
"Monetary policy is a useful tool, but it cannot solve every problem faced by the United States. In trying to use policy as a cure-all, we will repeat the cycle of severe recession and unemployment in a few short years by keeping rates too low for too long."
I wish free money was really free and that there was a painless way to move from severe recession and high leverage to robust and sustainable economic growth, but there is no shortcut."
Over the past year or so, I have spoken to several dozen currency traders who flip at the mention of the $. Some are wary, but most speak excitedly about an undervalued asset (some would argue, commodity) which can be depended on as a long term vehicle for growth.
"I am long the dollar, period".
My question is always the same, "how long?".
I rarely get a straight answer to that one.
Do you guys trust the dollar? My head and my heart are still in debate over the issue.