Posted on 09/21/2014 9:20:27 AM PDT by Kaslin
Way to cheer on Obama’s economic policies. Prepare for disappointment, Mr. Kudlow.
Larry Kudlow loves saying *King Dollar*.
The dollar will rise as it remains the reserve currency.
As more countries turn to direct conversion (rubles to yuan, etc) there will be less need for reserve banks to maintain as many dollars in their vaults. When they have to have more yuan or rubles or gold for their direct transactions, they will sell dollars to buy them. That will increase the “availability” of dollars on the market, dropping the strength.
So, as long as everything stays exactly the same as it is today, and as it has been since 1944 this story is accurate.
The question is what are the odds that things will stay the same over the next few years?
Bull Sperm.... inseminating the uninformed..
The question is who is buying how much of the currencies that are falling.
JMHo
“A strong dollar is a sign of a strong America”
Relying so much on a strong dollar is a sign of a stupid America.
Things haven’t been the same since 1944. You forget about Nixon closing the gold window.
Ping me at $1.00 = €1.00 then the dollar will be king!
Way to cheer on Obama’s economic policies. Prepare for disappointment, Mr. Kudlow.
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Obama has nothing to do with the rising dollar. That’s all about rising US oil production, the end of QE, europe and japan devaluing their currencies and instability everywhere else. (well that instability is caused by obama so he can get some credit.)
As more countries turn to direct conversion (rubles to yuan, etc) there will be less need for reserve banks to maintain as many dollars in their vaults. When they have to have more yuan or rubles or gold for their direct transactions, they will sell dollars to buy them. That will increase the “availability” of dollars on the market, dropping the strength.
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This is definitely in the cards. The countervailing force is that the dollar is at the beginning of a long term secular rise. Any central banker worth anything knows this. So its not altogether wise to get rid of an appreciating asset—which the dollar as a reserve currency is becoming..
TROLL ALERT!!!
House of Burgesses
Since Sep 12, 2014
Things haven’t been the same since 1944.
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Make that read 1974,
There are pros and cons to everything.
The debts at all levels of government are the elephant in the room along with balance of payments deficits (trade imbalances). It’s all borrowed, and borrowing is stupid. The dollar is internationally unnaturally high with respect to the lack of manufacturing (American-”based” manufacturing on foreign soil not included). That’s conservatism. The debt regime’s anti-Americanism and artificial scarcities (supported by bipartisan animal worship and environmentalism) are as low as it gets. Call it communism, fascism or empire. It’s all the same centralized tyranny, and we see that it is shrieking during its weakening stage.
Possible explanations:
* Foreign investors are buying low (low priced assets today, like stocks in manufacturers and commodity producers) with the expectation it will rise in value in a few years. Whether due to a resurgence after Obama is out or sky high inflation is a different question.
* Our proven oil and gas reserves keep growing. If we finally drill on the East and West coast and Alaska for oil and all the natural gas formations around the world, the US will become a major petroleum exporter. Buying American could be an investment in the skyrocketing value of those energy companies once allowed to produce and export.
* While our economy is lousy, our odds of expropriating a foreigner’s holdings may be seen as lower than if the person’s money stayed in their own country. Thus we are simply the least bad investment option.
Yep. It's hard to kill the belief that somewhere, sometime, adults will be in charge again. People around the world still tend to believe that will be in the USA.
I was speaking ONLY of the reserve currency status.
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