Raybyrnes, I bought inverse index funds a couple weeks ago. I only put 10% of our money in it. The rest is in cash. When our 3-month TBill expires, I plan to put some of that into alternative currencies (Merk fund, gold) and inverse index funds.
Zeal’s articles on the dollar bear are worrisome. US Dollar Bear 4: “From its peak in mid-2001 to its trough in late 2004, the US Dollar Index lost a staggering 33.3% of its value in the world currency markets! ” Zeal writes the US dollar is in a secular bear market, and the 7% rise off the low in December 2004 is just a short lived rally within a much longer secular bull. They say the dollar has a long way to fall.
One problem is that the Federal Reserve increases the dollars in circulation by 8% – 9% annually. This increased supply lowers the value of each dollar.
Add to that rising dissatisfaction among the international community with having so much of their money in the US dollar, and the start of diversification. Demand is falling, very slowly, but falling. Will this lowered demand turn around?
We have rising supply of dollars, falling demand… Not a good picture.
