An interesting phenomenon is happening globally. As prices rise, countries demand more and more USD in order to buy fewer and fewer things. Contagion is setting in and countries are defaulting on their loans, destroying dollar reserves banks thought they had. So the dollar is becoming very strong, holding prices in USD much lower than they should be. You can think of it as all fiat currencies falling against the value of goods, but the dollar is falling much, much slower than all other currencies.
So the USD is getting a free subsidy right now because it is still the reserve currency of trade.
However, once the new BRICS asset backed currencies are fully in play, banks get all their foreign currency correspondent accounts opened and established, and countries start shedding USD in order to balance their reserves with BRICS accounts, that artificial demand for the USD is going to plummet. (India just announced yesterday that all trade henceforth will be in INR)
That is when real inflation will start. That is when the dollar will weaken...a lot. This is just spring training. Expect the season opener in a couple of months.
Inflation hasn't really kicked off yet.
An interesting phenomenon is happening globally. As prices rise, countries demand more and more USD in order to buy fewer and fewer things. Contagion is setting in and countries are defaulting on their loans, destroying dollar reserves banks thought they had. So the dollar is becoming very strong, holding prices in USD much lower than they should be. You can think of it as all fiat currencies falling against the value of goods, but the dollar is falling much, much slower than all other currencies.
So the USD is getting a free subsidy right now because it is still the reserve currency of trade.
However, once the new BRICS asset backed currencies are fully in play, banks get all their foreign currency correspondent accounts opened and established, and countries start shedding USD in order to balance their reserves with BRICS accounts, that artificial demand for the USD is going to plummet. (India just announced yesterday that all trade henceforth will be in INR)
That is when real inflation will start. That is when the dollar will weaken...a lot. This is just spring training. Expect the season opener in a couple of months.
Solid analysis!
...just in time for the midterms....
...compelling observation, nicely stated and framed....