‘Mighty Dollar: Economist Contrarian Cover Nails The Top’
Concerns about the US dollar are in the news:
Mighty Dollar: Economist Contrarian Cover Nails The Top
July 19, 2017
Magazine covers tend to coincide with extreme sentiment. The Economist is particularly good at offering contrarian articles.
In December of 2016, The Economist nailed the peak in the US dollar with its “Mighty Dollar” issue.
The dollar has been gradually gaining strength for years. But the prompt for this latest surge is the prospect of a shift in the economic-policy mix in America. The weight of investors’ money has bet that Mr Trump will cut taxes and spend more public funds on fixing America’s crumbling infrastructure. A big fiscal boost would lead the Federal Reserve to raise interest rates at a faster rate to check inflation. America’s ten-year bond yield has risen to 2.3%, from almost 1.7% on election night. Higher yields are a magnet for capital flows.
The trade deficit will widen as a strong currency squeezes exports and sucks in imports. In the Reagan era, a soaring deficit stoked protectionism. This time America starts with a big deficit and one that has already been politicized, not least by Mr. Trump, who sees it as evidence that the rules of international commerce are rigged in other countries’ favor. A bigger deficit raises the chances that he act on his threats to impose steep tariffs on imports from China and Mexico in an attempt to bring trade into balance. If Mr. Trump succumbs to his protectionist instincts, the consequences would be disastrous for all. …
About That Trade Deficit
The Economist seems to think a falling dollar will help exports. https://www.investing.com/analysis/mighty-dollar:-economist-contrarian-cover-nails-the-top-200201966
Yesterday by: Michael Hunter
Gridlock in Washington, slower economic data and fund flows moving back into European assets: It’s not a good look for the dollar, with the index tracking the world’s reserve currency mired at levels last seen before the election of Donald Trump. Expectations for a reflationary package of tax cuts and fiscal stimulus that followed the president into office are floundering, as the administration’s inability to repeal Obamacare leaves them dashed and the dollar looking especially vulnerable. The currency is falling against its developed world peers, as well as across emerging markets, with only the pound bucking the trend after UK inflation data missed forecasts. Lee Hardman, a currency analyst at MUFG, called the events in Washington “a significant blow,” pointing out that the dollar “had already been left vulnerable by building expectations that the Fed will slow the pace of monetary tightening by potentially delaying the next rate hike until next year.”
The euro is established back above $1.15, up 0.65 per cent at $1.1553, while the yen has strengthened past Y112 per dollar for the first time in two weeks, before settling up 0.3 per cent at Y112.27. That comes even as the Bank of Japan looks set to underline its status as the world’s most dovish central bank at its meeting on Thursday, when it is expected to underline its commitment to economic stimulus. https://www.ft.com/content/d750e45c-7d08-32e9-bc5f-4157e217afcc
Now, there was some strengthening of the value in the US dollar during parts of today. For a while, we will see ups and downs. But the long-term trend is not positive.
It was not just The Economist magazine that made a prediction about the trend of the US dollar dropping. Notice something from a few months ago:
April 25, 2017
The Euro is set to gain ground versus the Dollar and rise to 1.2000 by the end of 2017 says HSBC.
The key driver behind what promises to be a notable rise in the Euro to Dollar exchange rate is actually an expected weakening in the US Dollar due to a shift in focus to the structural realities that stand in the way of President Donald Trump’s efforts to further stimulate economic growth.
Theses include the country’s twin budget and trade deficits.
However, an uplift for the Euro will come from a mixture of fading political risk and the European Central Bank (ECB) unwinding their stimulus programme.
This bullish stance on the Euro mirrors a similar stance held by Nomura who we today report expect the Euro / Dollar exchange rate to rise to 1.15 by the end of 2017.
USD Faces Headwinds
Donald Trump’s political promises are seen to be fading quickly as Congress stands in the way of deeper reform. … Even if the government goes ahead and implements them they are not likely to be self-financing as some of Trump’s advisors claim and thus will require borrowing to fund…
With the President’s honeymoon now over the harsh realities of government are likely to weigh on the Dollar.
The incompatibility of Trump’s protectionist trade policies with a strong Dollar are likely to lead to him delaying implementation of certain dollar-positive policies such as the repatriation of overseas profits at a one off 10% tax rate as well as a blanket border tax. https://www.poundsterlinglive.com/eur/6665-eur-usd-to-reach-1-20-by-end-of-year-forecasts-euro-bullish-hsbc
What about the US dollar vs. the Euro? Back in 2013, I posted the following:
There once was a movie that had two men camping outdoors. Suddenly, one man yells, “Run, a bear!” The other man yells back, “You can’t outrun a bear.” The first man responded with, “True, but all I have to do is to outrun you.”
The implication is that the first man only needed to be better in the site of the bear than the second one, which presumably the bear would consider to be weaker, and then catch and destroy.
From an economic perspective, the story basically is that the economy of Europe does not need to be perfect, only perceived to better than that of the USA to someday surpass it. (Thiel B. BlackRock cautioning against USA stocks; European finance ministers meeting. COGwriter, December 10, 2013)
Because of massive USA debt, and an outlook for that debt to massively increase (e.g. CBO points to massive debt: Can the depth of a coming financial crisis be known?), the US dollar will not forever be considered as a ‘safe haven.’
What about the Euro?
Well, it has problems too. But, here is an opinion from Daily Reckoning’s Jim Rickards:
The Euro Is Stronger Than You Think
April 24, 2017
The euro is the currency of the largest economy in the world, but it gets little respect. …
My view is the euro is here to stay, and will grow stronger in the years ahead.
The evidence backs me up. Since the European sovereign debt crisis emerged in early 2010, not a single member country has left the euro, and three new member countries (Estonia, Latvia, and Lithuania) have been added. This brings the total to 19 member countries. I expect other countries will join in the years ahead, including Scotland, Croatia, and the Czech Republic. …
Why is the euro consistently disparaged and denigrated by analysts who should know better? Why doesn’t the euro get respect?
The answer is cognitive bias. U.S. analysts in particular receive a lot of their information about “Europe” from UK sources, especially the London-based publications Economist and Financial Times.
Those publications have opposed the euro for decades and continually denigrate the European project consisting of the EU, the Eurozone, the euro, and their predecessors. Americans lean on London because of the language and travel barriers of consulting German, Greek or other continental sources. Still, this distorts their views. …
The EU is pursuing a number of initiatives consistent with the idea of More Europe. These include unified banking regulation, unified bank deposit insurance, and unified application of the new “bail-in” rules … Citizens of Eurozone countries strongly support the euro. …
The population of the EU is about 508 million; significantly larger than the U.S. at about 310 million. The members of the Eurozone collectively hold about 10,000 tons of gold — more than the U.S., which has about 8,100 tons of gold.
Thinking of the EU and Eurozone as a gaggle of separate small countries, some of which have serious economic dislocations, produces a distorted view of the strength of the euro. When population, GDP, gold, and other metrics are viewed in the aggregate, what emerges is a formidable competitor to the U.S., Japan, or China as a leading global economic power. https://dailyreckoning.com/euro-stronger-think/
Here is something I wrote related to the Euro in my book Donald Trump and America’s Apocalypse:
Since many are now questioning the role of the US dollar as the world’s reserve currency, more are looking into other currencies as well as gold. Gold will set records in US dollar terms.
It has been proposed that various nations around the world are already in the process of accumulating gold to one day overthrow the U.S. dollar—and that the “U.S. is unprepared for this strategic alternative to dollar dominance.” (Rickards J. Axis of Gold. The Daily Reckoning, December 20, 2016)
When the U.S. dollar totally collapses people all around the world will consider that even if the Euro (or something similar) is strong, having a more gold-backed currency would be safer.
The collapse of the USA dollar will shake a lot of the world’s confidence in non-gold backed currencies.
The Europeans do not have to have a perfect currency, only one that is perceived to be in better shape than the USA dollar.
Having the European power acquiring more gold to back the Euro or possibly another future European currency (that might potentially replace the Euro or even a basket of currencies) may greatly increase European credibility, prosperity, and influence around the globe, even if the backing is only implied.
The debt accumulation policies of the Obama Administration, which are a massive acceleration of the previous policies of the Bush Administration, look like they will be continued by Donald Trump.
The increases in America’s debt are heading the world into the time when something other than the U.S. dollar will be valued as its reserve currency.
A Donald Trump Administration would need to make massive changes to possibly prevent this.
The USA and its dollar are at serious risk. (Thiel B. Donald Trump and America’s Apocalypse. Nazarene Books, 2017)
Whether or not the EU keeps the Euro, the Bible shows that Europe will become the world’s leading economic power (Revelation 13) for a time (Revelation 18). The Bible also shows that Europe’s coming King of the North leader will acquire more gold (cf. Daniel 11:43; see also The Plain Truth About Gold in Prophecy. How Should a Christian View Gold?).
Plus, the Bible shows that an indebted end time power will be taken over (Habakkuk 2:2-8). The Bible also shows that the strongest military power will be taken over by a European power in the end (Daniel 11:39; see also USA in Prophecy: The Strongest Fortresses).
Well, since the USA is the most indebted nation in the history of the world and currently has the world’s strongest military, end-time prophecies are consistent with the view that the US dollar will one day essentially be worthless.
The Bible shows that although Europe will have problems (Daniel 2:41-43), that it will rise up anyway and dominate for a time militarily (Daniel 11:39-43) and economically (cf. Revelation 17 & 18). But it too, will come to an end (Daniel 11:44-45; Revelation 17:14; 18 & 19).
Some items of possibly related interest may include:
America’s Day of Reckoning 2017 Dollar Collapse? Economist James Dale Davidson says that a financial bloodbath will hit the USA and there is nothing that Washington can do to stop it. He claims that at least 57 nations have gotten together to dethrone the US dollar as the world’s reserve currency. He claims this can happen any day or in a few months. He mentions China, Russia, the AIIB, and gold. He claims his track record in predicting massive shifts in the past should assure people that he is right about this. He claims that there will be massive unemployment, near elimination of social security benefits, and more. Is James Dale Davidson possibly right on any of this? Dr. Thiel goes over many of his claims and explains what the Bible shows related to the coming collapse of the US dollar. This is a video.
Twelve ‘grey swan’ events to watch for in 2017? The Japanese financial firm Nomura put out a list of ‘ten grey swans’ events to look out for in 2017. Indirectly based upon ‘black swan’ theory, these are events that Nomura believes could greatly impact financial markets in 2017–some of which are related to the election of Donald Trump. Dr. Thiel expounds on each of these ten and adds two additional ones. What is a ‘grey swan’ and how may events in 2017 impact the future? What were two events in 2016 that look to have significant impact in 2017? Dr. Thiel brings out biblical prophecies that Nomura did not refer to so that you can better understand what will happen, as well as when certain events will not happen.
Collapse of the Euro and Dollar? War in 2020? Larry Edelson of Money and Markets described aspects of current economic difficulties and explained why he felt matters would get a lot worse. He said war, like World War III, could break out as early as 2020. What did he call the ‘granddaddy of all cycles”? Will matters go as he said? What does the Bible teach? Dr. Thiel provides biblical insights that secular sources often miss. This is a video.
The Plain Truth About Gold in Prophecy. How Should a Christian View Gold? What do economists and the Bible teach about gold? Gold and silver may drop in value. Inflation/deflation? What do Christians need to know about gold? A video of related interest may be: Germany, Gold, and the US Dollar.
USA in Prophecy: The Strongest Fortresses Can you point to scriptures, like Daniel 11:39, that point to the USA in the 21st century? This article does. A related sermon is titled: Do these 7 prophesies point to the end of the USA?
Who is the King of the West? Why is there no Final End-Time King of the West in Bible Prophecy? Is the United States the King of the West? Here is a version in the Spanish language: ¿Quién es el Rey del Occidente? ¿Por qué no hay un Rey del Occidente en la profecía del tiempo del fin?
When Will the Great Tribulation Begin? 2017, 2018, or 2019? Can the Great Tribulation begin today? What happens before the Great Tribulation in the “beginning of sorrows”? What happens in the Great Tribulation and the Day of the Lord? Is this the time of the Gentiles? When is the earliest that the Great Tribulation can begin? What is the Day of the Lord? Who are the 144,000? Here is a version of the article in the Spanish language: ¿Puede comenzar la Gran Tribulación en 2016 o 2017? ¿Es el Tiempo de los Gentiles? You can also see the English language sermon videos: The Great Tribulation from the Mount of Olives and Can the Great Tribulation begin before 2020? A shorter video is: Will the Great Tribulation Start in 2017?
World War III: Steps in Progress Are there surprising actions going on now that are leading to WWIII? Might a nuclear attack be expected? What about WWIV? Does the Bible promise protection to all or only some Christians? How can you be part of those that will be protected? A related video would be Is World War III About to Begin? Can You Escape?
Does God Have a 6,000 Year Plan? What Year Does the 6,000 Years End? Was a 6000 year time allowed for humans to rule followed by a literal thousand year reign of Christ on Earth taught by the early Christians? Does God have 7,000 year plan? What year may the six thousand years of human rule end? When will Jesus return? 2023 or 20xx? There is also a video titled The 6000 Year Plan: Is the end of humanity’s reign almost up?
The Plain Truth About Gold in Prophecy. How Should a Christian View Gold? What do economists and the Bible teach about gold? Gold and silver may drop in value. Inflation/deflation? What do Christians need to know about gold?
Who is the King of the North? Is there one? Do biblical and Roman Catholic prophecies for the Great Monarch point to the same leader? Should he be followed? Who will be the King of the North discussed in Daniel 11? Is a nuclear attack prophesied to happen to the English-speaking peoples of the United States, Great Britain, Canada, Australia, and New Zealand? When do the 1335 days, 1290 days, and 1260 days (the time, times, and half a time) of Daniel 12 begin? When does the Bible show that economic collapse will affect the United States? In the Spanish language check out ¿Quién es el Rey del Norte? Here is a link to a video titled: The Future King of the North.
Europa, the Beast, and Revelation Where did Europe get its name? What might Europe have to do with the Book of Revelation? What about “the Beast”? Is an emerging European power “the daughter of Babylon”? What is ahead for Europe? Here is a link to a video titled: Can You Prove that the Beast to Come is European?
European Technology and the Beast of Revelation Will the coming European Beast power would use and develop technology that will result in the taking over of the USA and its Anglo-Saxon allies? Is this possible? What does the Bible teach? Here is a related YouTube video: Military Technology and the Beast of Revelation.
Anglo – America in Prophecy & the Lost Tribes of Israel Are the Americans, Canadians, English, Scottish, Welsh, Australians, Anglo-Saxon (non-Dutch) Southern Africans, and New Zealanders descendants of Joseph? Where are the lost ten-tribes of Israel? Who are the lost tribes of Israel? What will happen to Jerusalem and the Jews in Israel? Will God punish the U.S.A., Canada, United Kingdom, and other Anglo-Saxon nations? Why might God allow them to be punished first? Here is a link to the Spanish version of this article: Anglo-América & las Tribus Perdidas de Israel. Information is also in the YouTube sermons titled Where are the Ten Lost Tribes? Why does it matter? and British are the Covenant People. A short YouTube of prophetic interest may be Barack Obama and the State of the Apocalypse.
The Gospel of the Kingdom of God This free online pdf booklet has answers many questions people have about the Gospel of the Kingdom of God and explains why it is the solution to the issues the world is facing. Here are links to three related sermons: The World’s False Gospel, The Gospel of the Kingdom: From the New and Old Testaments, and The Kingdom of God is the Solution.
Donald Trump in Prophecy Prophecy, Donald Trump? Are there prophecies that Donald Trump may fulfill? Are there any prophecies that he has already helped fulfill? Could a Donald Trump presidency be apocalyptic? A related video is titled: Donald: ‘Trump of God’ or Apocalyptic?
Donald Trump and America’s Apocalypse This 188 page book is for people truly interested in prophecies related to Donald Trump and the United States, including learning about several that have already been fulfilled and those that will be fulfilled in the future. The physical book can be purchased at Amazon for $12.99 from the following link: Donald Trump and America’s Apocalypse.
Donald Trump and America’s Apocalypse-Kindle Edition This electronic version of the 188 page print edition is available for only US$3.99. And you do not need an actual Kindle device to read it. Why? Amazon will allow you to download it to almost any device: Please click HERE to download one of Amazon s Free Reader Apps. After you go to for your free Kindle reader and then go to Donald Trump and America’s Apocalypse-Kindle Edition.
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