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Showing posts from April, 2008

10 Reasons Why the Dollar Will Strengthen

By Louis Basenese. Mr. Basenese is the Associate Investment Director of The Oxford Club and regular contributor to Investment U. The following article first appeared in Investment U. The world is short the dollar right now. But that could be a big mistake… The outlook for the ailing greenback – finally – is getting healthier, which makes it the perfect time to go long. I know this is a wildly unpopular and completely contrarian stance, so let’s get right to it. Here are the 10 reasons I think the dollar’s headed for an inevitable reversal: 1. If Not the Dollar… Then What?
With the greenback getting clubbed, China shocked the world recently by suggesting it would diversify away from the dollar. To which I simply say – into what? The likely suspect is the euro, but there’s not enough liquidity to handle the demand. Plus, it’s still a pre-pubescent, experimental currency that not one government can invest in with 100% faith. Moreover, with two-thirds of foreign reserves in dollars, it w…