US Dollar Seen Rising in 2011 After Rough 2010

This is the last piece of spin for 2010.

The dollar remains the ultimate safe haven," Prasad said.

My response to this tireless spin argument is bull.

Gold trend, priced in a composite of fiat (paper currency), is up. The market has established gold as the ultimate safe haven. It's the only expert that matters.

Gold London PM Fixed and U.S. Dollar Major Currencies Index Ratio:


Gold London PM Fixed and U.S. Dollar Broad Index:

Never mind the lackluster economy, the huge trade deficit or the government's piles of debt: The U.S. dollar is still expected to outperform most of the world's major currencies next year.

"By all rights, the dollar should be declining in value, but it's not," says Eswar Prasad, economics professor at Cornell University. "For the dollar to decline in value, you must have currencies on the other side that will" rise.

Bad as things are in the United States, they look worse in Europe and Japan, making the yen, the euro and the British pound riskier bets in 2011. A notable exception is the Chinese yuan, which is likely to rise next year as Beijing fights inflation.

"The dollar remains the ultimate safe haven," Prasad said.

Source: abcnews.go.com