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America Has A Problem. And The Only Solution Is Dollar Weakness
America has a problem. A lot of them, actually. Don't get me started. We'll be here all day. And nig
In the past, USD weakness has tended to be bullish for US equity prices as an expression of +ve risk sentiment, but I think that this kind of USD weakness won’t necessarily be.
Absent the +ve sentiment factor, seems like mechanically – USD –> + US inflation + US yields + large/small – US asset px.
Good points JL. Perhaps we need to start looking at UST partly as EMG bond investors look at their world?
Problem is I barely know how US bond investors look at their world, much less EM . . . just an equity simpleton here.
And now we’re back to taking gold…
*talking.
You got it. This couldn’t be more straightforward and no one has any idea. Trump of course had it ass-backwars at this inaugurationthat day was the end not the beginning. Thr U.S. has so many natural advantages that we should pull it out in 20 to 40 years. Thr U.S, has screwed it up by overspendig but Jacques, John Exter and thei buddies know that being the gold pivy was the way to destruction. H. I expect toill fight you to the death on gold or some so far unknown neuter asset must be the way out of what Trump is likely to do. Trump 2.0 is dead, Trump 1.0 will not be nough – if that is true, then the printing press follows. And, then….
There is an out in the long term, as democracy, social-democracy, is the best gowervment and this oountry has great physical assets and great borders to allow striving new immigrants in to make us stronger. .
Damn John. I respect your performance record and breadth of experience which almost matches mine.
But I resent how your posts sometimes challenge mine when it cpmes to spelling errors which lead to “confusing” conclusions. At least for me.
I agree – my proofing is the worst. I will try harder.
🙂 I’m your nasty old 7th grade English teacher brought back to life!
Won’t this just lead to eventual yeld curve control? The fed making US banks hold more treasury’s on thier balance sheets, which would also lower lending by those same institutions.
I think the bank capital requirements, e.g. Supplementary Leverage Ratio, can and will be changed to permit banks to hold more Treasuries without impacting their lending.
From following some banks, my sense is bank lending capacity isn’t the problem. Demand for loans is weak.
I know Prince Donald of the Very Tiny Hands is not logical but I need some help here. Tariffs were supposed to pay for budget needs and tax cuts. They won’t apparently. DOGE was supposed to reduce waste, blah blah. All it accomplished was an under-the-radar attack on the worst of the “libs” and other meddlesome priests, without saving anything material. Now comes the “huuuge” bill with a corresponding huuuge addition to the deficit. So all this pain to cut down the Prince’s enemies list a bit just leave us far worse off fiscally. Finally, given the need for the weaker dollar, we get a rise in interest rates, not the decline devoutly to be wished by the Prince. I never liked marco economics much. The problem with macro econ is one you can never get two things one desires at the same time. Econ is more of a Newtonian Physics kind of dismal science. The Prince not only hates democracy, but he also hates the inexorable power of economic markets.