The USD fall has begun – diversify out of USD now!

The FED has set interest rates to zero, pretty much. There is nothing more to give. Today the dollar slid dramatically. I say this is it, the fall has begun. You must diversify out of USD now, immediately. If you are long dollars or dollar, US based assets you must sell and diversify now. Buy a portfolio of assets in various currencies. The Euro will eventually fall as well, but before that the ECB will do a fight with the markets. You will do well in Euros for the next 1-2 years (and maybe longer, we will know when the market/ECB fight is on). I would also sell US bonds, they are bound to reverse sooner or later – why take the risk with the good money that has been made in US bonds.

I would not short USD, that is to risky. But diversify out – definitely.

Gran Canaria, Spain. Hans Lysglimt December 17. 2008

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