Felix Salmon on the dollar carry-trade

Here is a nice comment on Roubini's "mother of all carry-trades" claim.

No need to say how much I agree with this. I was the first to point out how unnatural this carry-trade situation looks like.

Here is my comment on Felix Salmon's post:

There is something unnatural to borrow from a country that is a net borrower itself. This kind of financial flow will have to be reversed sometime in the future. Where you may have had gradual build up of short dollar positions, once the trend is reversed, even by a small amount, the dynamics of the system can change significantly. That is, nobody likes to be the last person out, so the pure momentum of people rushing for the exit, first for locking their profits and later for cutting their losses, will lead to spectacular dollar comeback.