I use to follow Rick Ackerman’s writings a long time ago(even had a few email exchanges with him about some trades) because he does come up with some good trading ideas from time to time. This one theme that he has had for thirty plus years, I have challenged him on and have even posted about here before. Yes, you can get a short squeeze by big money institutionalized trades in the market specifically for stocks that have a finite number of shares outstanding. And you can have significant spikes in the dollar index like we have had recently. I agree the dollar is going to lead to an eventual collapse in the US economy and standard of living, but not because of deflation but because of the type of runaway inflation that has led to the collapse of every previous fiat currency that WASN’T BACKED BY GOLD. Rick’s and many others ultimate mistake is calling for deflation in a system where the currency isn’t backed by gold. There has never been and never will be deflation, except when the currency in question is backed by gold(or silver). During the history of the US, those periods when real deflation took place (not disinflation) were ALWAYS when the US was on a gold backed dollar standard.(Why do you think the FED is so scared of and opposed to a gold backed dollar. Because if you make a mistake in monetary and or fiscal policy you can experience deflation). I wish he and everyone else who keep writing about the strength of the dollar would move on to something more useful. The dollar index is just a comparison of the dollar vs the yen, EURO, british pound and a few more fiat currencies that are all worthless paper. None are backed by anything and all the proof you need is that since Russia started tying the Ruble to oil and indirectly to gold, it has soared against the dollar and the rest of the fiat currencies. If a currency isn’t backed by real money(gold or silver) how it bounces up and down vs it’s worthless peers means nothing.

Rick’s Picks – Rick Ackermen