Jim Rickards is a failed hedge fund manager turned newsletter writer. I’d like to see his cumulative performance numbers, averaged out by year, both at his fund and his newsletter.
The problem with his thesis is that he posits that the dollar’s reserve currency status is the reason for the size of US economy. In reality, the size of the US economy is the reason for dollar’s reserve currency status. In many ways, the strength of the dollar is a brake on the US’s economic performance.
A strong dollar is great for American consumers. The problem is that it’s also a drag on the performance of American exporters. Everything they sell abroad is more expensive than it could be, to their foreign customers. US exporters are happy to see the dollar’s value fall relative to foreign currencies.
The reason the dollar stays stubbornly strong? Names like Microsoft, Amazon, Google, Boeing, Pfizer, Caterpillar, GE, Bank of America, and so on. Large US corporations at the top of their game that are among the best at what they do globally, peddle their goods and services abroad and receive large sums of foreign currency profits that they repatriate to the US by selling that currency and buying US dollars.
When foreign company products and services replace the American names listed above, that will be the time the US economy starts to stumble. Until then, the caterwauling about reserve currency status is just a carnival barker’s way of peddling his wares to a bunch of people he considers rubes. What I’d like to see is where Rickards’s money is actually invested - the wares he plays up or a mix of index and bond funds. Truth in advertising almost requires it.
“Until then, the caterwauling about reserve currency status is just a carnival barker’s way of peddling his wares to a bunch of people he considers rubes. “
That is funny and perfectly nails the reality of these death if the dollar hucksters.
T. Rex ruled his era.
American management is now of decreasing quality.
The Federal Reserve and Congress have undermined bank depositors, creating a bullish stock marker that foreign investors have bought into.
However, the Chinese rich know after seeing Russian oligarchs slammed that Western democracies are dangerous places to invest money.