"ALL CAPS IN DEFENSE OF LIBERTY IS NO VICE."

Monday, March 07, 2011

DOLLAR SHORTING = NEXT FINANCIAL CRISIS?

It is reported that short selling of the US dollar has increased significantly.

This is connected to expectations that the ECB will increase interest rates in Europe.

In the context of the fast pace of the rise of oil and commodity prices this situation might be seen as a precursor for the reemergence of an international financial crisis.

Of course a concerted effort on behalf of Chinese, US and European Central Banks to stabilise the dollar may force hedge-funds to cover their shorts - which will strengthen the dollar.

If this move fails then we all need to run for cover.

UPDATE: RELIAPUNDIT ASKS:

I WONDER IF THIS RUN IS A RESULT OF CERTAIN PEOPLE EXPECTING SOME BIG ATTACK ON US INTERESTS OR INSIDE THE USA?

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