The US dollar is currently surging against all major currencies, as North Korean threats and the impending collapse of the euro-zone means a massive flight to safety. The Europeans, led for months by a listless and conservative Germany, are badly botching the situation. The value of the US dollar will surge in the coming weeks and months.
If you remember back during the G-20, the Germans slammed the US for our Quantitative Easing, accusing us of weakening our currency. At the same time, the Germans expressed confidence that Ireland would be fine. It took less than two weeks for the Germans to be proved wrong. Since QE2, it is the euro that has lost ground against the dollar, falling from $1.42 to $1.33, as the markets lose faith in Germany's ability to manage the European crisis. Investors are fleeing to the safety of the US dollar:
Dollar/Euro:
Dollar / Japanese Yen:
I suspect more North Korean sabre rattling is hurting the yen. The dollar continues to rally against it.
Dollar / Pound:
Look at that steady decline this morning - relentless. The UK is too tied to the euro-zone and austerity measures won't save it if the zone collapses.
Dollar / Australian Dollar:
The Australian dollar is highly tied to the strength of the Chinese economy.
Dollar / Canadian Dollar:
Dollar / Swiss Franc:
Switzerland is a conservative European country that wisely stayed out of the euro. But look at that hockey stick. They will feel the pain.
In short, when the jig is up, investors still have confidence in one place only: Not China, not Germany, but the United States of America.
Update: I am removing some investment advice that was originally posted here. Sometimes, where you put your money can have moral implications, and in the heat of typing this diary, I forgot that, which goes against the values of that I think this site tries to promote.