After yesterday's post on what other think of the economy vis-a-vis the dollar, here is my far more simplified and stripped down opinion. Sometimes it is impossible not to get bogged down in dogma and finance is no different. The world has changed rapidly over the past two decades with secretive hedge funds, algorithmic trading, exotic financial products and an explosion of ETFs dominating markets.

Sometimes, however, we have to step back to the most bare bones qualitative analysis. Maybe it is because I am so amped up to go watch Moneyball this weekend, but I am tempted to toss out the sabermetrics and spreadsheets and speak clearly, bluntly and simply on a subject which is not as murky as the industry often makes it out to be.

The U.S. Dollar and Why I am Bullish

Many of you might think me mad for this sort of outburst. Certainly, just about every financial pundit has said the opposite over the past couple of years. It has certainly been true. But things change and they usually change too fast for the majority to profit, so I am telling you now like I have been telling it for a while. That dollar jump... it's coming. Exactly when and exactly where I cannot (or maybe... will not) say for sure.

All I can say is that my rationale comes from simple competitive analysis. I am not looking at statistics, the Wins Above Replacement and OPS+ in baseball geek terms. I am looking at the field. I am looking at the competition weakening and getting tired. I am looking at those who would be our greatest economic threat and competition bent over, dry heaving and blinking constantly from the endless sweat dripping down their foreheads and into their eyes.

There are certainly a ton of arguments for and probably more against the dollar's rise, but I am betting on it and I will give you three reasons why.

1) Hungry Arabs

Okay, so this may not seem politically correct. Fuck it. The real reason behind the Arab Spring of 2011 is simple as pie. Better yet, as simple as the ingredients going into that pie. The Arab (read, OPEC) world of prodigal spending has stood for many decades on America's hunger for oil. Things are changing, however, and there is less money to spread around to the plebs who support the sheiks and kings. Bottom line, people are hungry. Hunger is the only thing which will truly drive man to revolt and that is why we have seen the uprisings in MENA that we have. Why is this good for the dollar, you ask? Well, do a little homework if you don't already know who the world's top producer of corn, wheat and a great many other food commodities is. We will soon see a day where the lack of food resources in MENA, combined with global inflation will create a situation where American ags and softs greatly boost the dollar's strength.

2) Lazy Europeans

Laughing at European's and their love for ideologies of all shapes and sizes is my favorite past time. I won't bother you guys with it. Simply put, the Euro is in trouble and the long term structural issues cannot be fixed without the type of rampant austerity that will shut down the EU machine. Much as we rap about Greece, it is Italy and Spain who are the long term cancers on the European system. For those of you who went short the Euro a couple of months back...life's good ain't it? This is a trend which will see the Euro and the Dollar back to the exchange rate of 2003 sooner rather than later.

3) Global Inflation

For anyone with a passport as pimped out as mine, something cannot be missed. Everything everywhere is more expensive. This shouldn't be a surprise if you are in a BRIC country or one of their satellite states. What should be surprising is anyone who tells you that this sort of growth can remain. Remember, markets can spike and an economy can grow but the amount of time it takes for the trickle down to ensure entire huge societies get to a point where they can enjoy said growth...can take forever.

Brazil is in trouble, they just don't see it yet. Russia essentially needs $120/bbl oil into perpetuity. India is the only name on this list that is not in serious danger from economic competition with the U.S. That should be of no surprise as they are the only BRIC not competing with America with as much directness and aggression. China has been in trouble, sees it all too well and doesn't know what to do. Rather than argue this last point with Sinofiles I will post the ultimate reason for China's downfall in tomorrow's post.

I realize this post is dragging on and that in the last paragraph I have essentially taken four books worth of material and simplified them to death in a none-too-pedantic swing of the sword. The reason is not an unwillingness to debate. The reason is that I see our competitors getting tired. I see their competitive and comparative advantages dwindling. I see America's and the globe's top currency benefitting from it and putting more green in the back's of American's pockets and more goods in their baskets for the money in coming years.

Who is a dollar bull like me? Let's see where WSO stands on the subject.