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Wednesday, November 11, 2009

IMF: Dollar carry trade is risking global collapse

First it was NYU economist Nouriel Roubini, now the International Monetary Fund (IMF).

Like many others, the IMF is growing concerned that a global dollar carry is trade pushing up assets worldwide — and risking a collapse if U.S. interest rates begin to rise.

The “trade” in question consists of borrowing dollars to take advantage of miniscule U.S. interest rates and then putting those dollars into assets around the world, including U.S. stocks and junk bonds...

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