What will happen to dollar when the mortgage lending related financial meltdown takes place?
Peter Oberois
Mar. 14, 2007

The dollar is carefully building a base that will take the dollar index to all time new highs over the next decade. The dollar index that stands at 84 currently is projected to test 160 in the next seven to ten years.

The biggest question is what happens to Dollar if mortgage lending related financial meltdown takes place. Can dollar really rise during deep self-fueling deflation?

The answer to that lies in the way Dollar index is created. It is a basket of currencies. Dollar will definitely go down compared to yen as deflation unfolds. Dollar will actually rise against all other currencies except the Canadian Dollar. The gold will first rise in a sharp spike and then collapse due to deflation.

The dollar will actually rise. During financial meltdowns, the currencies trade based on their strength of consumer buying power. Su has the biggest consumer base and that will push the dollar index to the highest levels.

What will happen to dollar when the mortgage lending related financial meltdown takes place?
Peter Oberois
The dollar index that stands at 84 currently is projected to test 160 in the next seven to ten years.
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