What No One Will Tell You About the Dollar in 2010 (Hint: But All the Biggest, Most Respected Investors Already Know)

By Kat Von Rohr

A silent stampede is taking place on Wall Street. While most investors cling to the hope of a rising stock market – some of the world’s wealthiest traders are doing something else.

With each passing week, they’re funneling billions into the most hated… beaten-down investment in the world: the U.S. dollar.

Don’t believe me?

Let’s look at the black-and-white figures.

  • Daily volume on the market’s most popular “dollar stock,” PowerShares DB U.S. Dollar Index Bullish fund (UUP) recently soared beyond 15,000,000 shares – five time higher than normal.
  • This intense interest caused the fund to sell out…and halt the issuance of new shares for 18 days.
  • Meanwhile, call options on this dollar bull fund outnumber puts by a factor of 25 to 1.

Obviously, all these investors all believe the dollar is about to rise. But what (or who) is driving this quiet dollar rally?

Nobody knows for sure. But…

A Few Dollar-Bears Have Stepped Forward with a Shocking Confession!

Jim Rogers is one of the most ardent dollar-bears in the world. So much so, that he moved his family to Singapore, three years ago.

But now, he’s stocking up on dollars…

“I have been buying U.S. dollars in the last two months betting on [a] near-term rebound.”

Bond king, Bill Gross has joined the party. Until recently, his massive Total Return Fund held a $13.9 billion short position on the dollar. But just a few weeks ago, he unwound this bet and shifted billions into cash.

Marc Faber… yes that Mark Faber who claims that gold will hit $3,000 an ounce… now says the buck could soar 10% or more this year.

These aren’t exactly “Joe Blow” investors.

So why is this story so far off the mainstream radar?

Simple… Most Americans do not hold gold, foreign equities or currencies; assets most likely to dip in value as the dollar ticks higher.

For that reason, the press has banished this story to the back pages – when they cover it at all.

Federal Government Confirms: Dollar Demand is on the Rise

Luckily our research analyst, Evaldo Albuquerque, has been tracking this development.

Last week, he placed a call to the Securities and Exchange Commission (SEC) and confirmed that intense investor interest has caused PowerShares to issue 240 million new shares of their Dollar Bullish fund, UUP.

According to records filed at SEC.gov, this is the second time in 60 days that the fund has sold out.

In light of this new development, Evaldo has put together a special briefing for FX University Daily readers. In this 12-page document, he explains the rising-dollar phenomenon and reveals how small investors can exploit it over the next 30-60 days – and target returns of 36% to 301% without risky leverage.

As I mentioned, this story is still unfolding. My fellow editors will have more later this week. Stay tuned.

P.S. The last time our currency team spotted this movement in the US dollar index, we were able to pinpoint a strategy that turned every $400 invested into $1,268. This similar pattern has been spotted again. For full details, click here.

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