You raise some interesting points. Personally, I believe that...

You raise some interesting points. Personally, I believe that investors price in their expectations long before interest rate hikes are announced or inflation data is released.

For example, from the time the Fed started talking normalisation in April 2014 to the time of the US Presidential election in November 2016, the USDX jumped from the high 70's to over 100.

Further, subsequent to Trump's election, his inflationary policies (i.e. tax cuts and increased spending) have coincided with the USDX cooling back down to its current level at just over 90.

To me, this appears consistent with the widely accepted theory of interest rate parity.

IMO, the short term positions that pile on around rate announcements are likely to be either speculators hoping for something unexpected or investors hedging against something unexpected. This would explain why these positions unwind so quickly after the status quo is maintained.

Regarding the emerging markets carry trade, it can be a highly profitable but it is also very risky. It isn't money for nothing. If the domestic currency begins to appreciates against the foreign currency, the investment could suffer a large capital loss very quickly. You either need the currency pair to remain stable, or the domestic currency (with the lower interest rate) to depreciate.

Lastly, I am not sure that most think BDR is going bankrupt. From what I have read on this forum shareholders are fearful of further dilution. Which isn't surprising given how frequently this company rattles the tin. As a holder myself I am hoping BDR can survive without a CR until some outstanding drill results are announced. "Tell him he's dreaming"

All IMO. Cheers.