1) I think most economist types would call the dual budget and current account deficits the major causes for sustained dollar weakness. Technically speaking, the budget gap is closed by Treasury borrowing. That sops up the extra dollars from the system (put there by gov’t spending), but puts other pressures on the currency. In the final analysis it’s always the net demand for dollars vis-a-vis other currencies which is the main factor, and that plays out in trade and capital flows, which are current account items.

2) Yes, I’m mainly dismissing the pros. Prominent investors and money managers like Tudor Jones, Sores, Rogers, etc. tend to have relatively transitory impact on prices. The markets may react to their comments, of course, but even they aren’t big enough to move markets for very long if the flows and sovereign interests are going the other way.

A couple of questions:

1. “Things like running big government deficits is generally something that will weigh on a currency”. Early in this decade, the US turned a significant budget surplus into a large deficit. From then on, the deficit kept on growing. Coincidentally, the US Dollar has been suffering a long term depreciation since then. In macro terms, trying to single out the major factor behind the currency’s fall, is the deficit the most significant? Or would you choose a different one?

2. “There are prominent money managers, economists, and other professionals”, and then this: “The government and central banks speakers, however, are a different story”. Are you dismissing the professionals then? How about respected ones like Paul Tudor Jones saying he is buying gold? Given that his statement was part of his letter to the hedge fund’s customers, he is talking and doing. Recently several other pros have joined the gold party. Do their combined words and actions have significant or only minor influence?