Debt Rattle December 3 2016
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[See the full post at: Debt Rattle December 3 2016]This ascribing motive to Yellen, to hurt Trump, is the worst sort of nonsense. As if she like everyone didn’t expect Clinton to win, But even that matters not, The Fed is almost powerless against the forces causing the dollar to rise. What remains of it’s tattered credibility makes more QE or pretend rate cuts impossible. Global forces are driving the dollar higher.
Money is fleeing Europe and China. Since the ECB began their QE in 14 they have printed 1.8TN Euros yet European bank deposits are only up 250bn. That is money leaving Europe. Just to be clear, central bank bond purchases of necessity create bank deposits, period, no ifs ands or buts. It is the mechanism. I have no numbers on money fleeing China and i don’t think anyone really does but again much is fleeing into dollar prices assets.
Besides which can you imagine Trump thinking a weak dollar would show America’s strength? Well who knows what’s in that mind. It seems mostly to be whatever sells at any given moment. To the extent he can think strategically on technical l things like monetary matters then his America First idas must conclude that the key thing is Americas relative strength. What better way to be strong than to have others weak.
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