Why I think the dollar will fall again, have you heard of Option ARM?

[Anton]

---

the ARM in Option ARM basically stands for adjustable rate mortgages. Which plainly means that you have an option to put off payment on the principal. And even an option to choose how much of the interest to pay. This attracts alot of would-be home owners raring to avail of the low interest rates. At first glance this may look like a steal of a deal....

But then the low interest loans don't stay that way forever. After the introductory period, the interest rates go up. And this is where the crash comes in, when borrowers find themselves not being able to make the payments, foreclosure steps in. And this is where the real problem comes, because in 2009, thousands of option ARM loans are resetting, and coming with it a new wave of foreclosures. Much like what happened when the US sub prime loans crashed.

Here's a business week article, if you're interested: The Next Real Estate Crisis

[chadix24_7]

this will be good for some of us.

[d`monyita]

this will be good for some of us.

kazi, imvortid imu sellingables

[chadix24_7]

kazi, imvortid imu sellingables

hahaha! dugaya nako naka get maam oi. LOL

[d`monyita]

hehehehe good for you but bad for me eh?

[Anton]

Yeah, this will be pretty bad for those earning in dollars. This will also be worse for the export industry, the industry hasn't even gotten back up from the sub-prime crash, and now this.

Anyway currently, I'm planning to hedge against a dollar weakness, Im just waiting for the dollar to rise some more, most likely after the US elections. Then probably that's the time I will hedge against USD weakness to the AUD.

[d`monyita]

ay how does one do that anak anton?

[Anton]

Ma'am Hedge's are quite risky or rather are very risky, specially when you are not sure about what you're going into. Basically what I'm doing is buying a futures contract to sell the dollar at a set amount in the future.