If you’ve seen Rick Santelli on CNBC lately, you probably caught him in the middle of some tirade about the weakening US Dollar, and he was probably blaming the massive debt and Ben Bernanke for causing what he sees is a gigantic mess.
Look, there’s undoubtedly a lot to be concerned about with respect to fiscal and monetary policy, and it’ll be painful if foreign investors really do lose confidence in the dollar. But that’s not what’s happening now.
What’s happening now is that the Dow is over 9200, the S&P 500 is back over 1,000 and the NASDAQ is over 2,000. There are also signs of an improving global economy, so investors are putting their money into commodities and the like. In a sense, all these investments and speculations are implicit dollar shorts. Thus, it would be pretty hard to fathom a run like we’ve had since March without some serious dollar weakening — especially since the financial crisis pushed the dollar into nosebleed territories. Again, everybody is going short the dollar by going long other things.
The real clincher is gold, which for all its fans and for all the nervousness continues to be a disappointment. Sure, you can come up with some excuses for why gold hasn’t broken $1,000 (it’s housewives in India, selling their jewelry!), but if the decline in the dollar we’re really part of some skittishness about the currency, gold would be steadily pushing higher. It’s not.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.