The Turkish lira extended its winning streak to two on Friday, buoyed by the central bank raising interest rates more than what the market had anticipated. The lira had been struggling over the last month following its incredible that started in November. Now that Turkey has shown its willingness to tighten monetary policy, could the lira break below 7 against the US dollar?
On Thursday, the Monetary Policy Committee (MPC) completed its March meeting. Officials agreed to raise the benchmark one-week repo rate by 200 basis points to 19%, beating the median estimate of 18%. This is the first rate hike since December.
Policymakers noted that the central bank made the decision to tighten policy based on inflation and pricing risks in the broader economy. Last month, the annual inflation rate climbed to a 20-month high of 15.61%, up from 14.97% in January. Until inflation eases and prices stabilize, additional monetary tightening will be implemented.
The MPC has decided to implement a front-loaded and strong additional monetary tightening.
The tight monetary policy stance will be maintained decisively, taking into account the end-2021 forecast target, for an extended period until strong indicators point to a permanent fall in inflation and price stability.
Next week, the MPC meeting minutes summary will be released.
Overall, financial markets are celebrating the decision, with industry analysts noting that Governor Naci Agbal had passed the credibility test, something that the institution had been lacking for quite some time.
Jason Tuvey, the senior EM economist at Capital Economics, wrote in a research note:
Ağbal is clearly keen to embellish his inflation-fighting credentials and thus was willing to go above and beyond what investors had demanded.
Bringing inflation down on a sustained basis will require the central bank to break with the past and move slowly with monetary easing to keep real interest rates high for a prolonged period.
Ankara also reported that foreign exchange reserves came in at $52.66 billion in the week ending March 12. This is down from $53.25 billion in the previous, but it is the ninth consecutive week that forex reserves have topped $50 billion. Still, the weekly figure is hovering around a one-year low.
In other economic data, Turkey’s automobile production plummeted 9.3% year-over-year in February, down from the 3.3% contraction in January.
Over the last month, the lira weakened as much as 5% before renewing its rally against many of its major currency rivals. Before its slide, the lira had been one of the world’s top-performing currencies since November.
The USD/TRY currency pair tumbled 1.09% to 7.2452, from an opening of 7.3246, at 15:07 GMT on Thursday. The EUR/TRY slumped 1.34% to 8.6101, from an opening of 8.7275.
us dollar monetary policy inflation
CFTC Fines Bitfinex, Tether $43MM For “Misleading” Claims About Reserves
CFTC Fines Bitfinex, Tether $43MM For "Misleading" Claims About Reserves
Years ago, several anonymous accounts on twitter, reddit and other…
Years ago, several anonymous accounts on twitter, reddit and other social media platforms complained that tether, one of the original stablecoins, and Bitfinex, the crypto exchange that helped create tether, were conspiring to drain the reserves from Tether's bank accounts, something that Bloomberg appeared to confirm in a report published earlier this month.
The SEC has been saying for months that regulating stablecoins is a priority, just like finally legalizing a bitcoin ETFs. But stablecoins present a unique threat to the US dollar, as one Treasury official explained earlier. Their lack of volatility (even tether continues to trade at roughly $1 despite reports about tether's reserves) mean they could be used for payments, making them a competitor to the dollar (while bitcoin and altcoins are more accurately compared with precious metals).
The agency said Friday that tether and Bitfinex will pay a combined $42.5MM, with $41MM of that coming from tether, and the remaining $1.5MM coming from Bitfinex.
Tether's fine was imposed over the company's claims that its stablecoin was "fully backed" by US dollars (which, as Bloomberg demonstrated, it's not). Bitfinex, meanwhile, will pay $1.5MM over findings that "Bitfinex engaged in illegal, off-exchange retail commodity transactions in digital assets with U.S persons on the Bitfinex trading platform and operated as a futures commission merchant (FCM) without registering as required," according to the statement.
The CFTC took a few seconds to pat itself on the back in its press release as the feuding over which agencies have jurisdiction over crypto continues to intensify.
"This case highlights the expectation of honesty and transparency in the rapidly growing and developing digital assets marketplace," said Acting Chairman Rostin Behnam. "The CFTC will continue to take decisive action to bring to light untrue or misleading statements that impact CFTC jurisdictional markets.”"
The CFTC added that it imposed these charges in keeping with its Congressional mandate to protect American investors from scams and fraud.
"As demonstrated by today’s actions against Tether and Bitfinex, the CFTC is committed to carrying out its statutory charge to promote market integrity and protect U.S. customers," said Acting Director of Enforcement Vincent McGonagle. "The CFTC will use its strong anti-fraud enforcement authority over commodities, including digital assets, when necessary. The CFTC will also act to ensure that certain margined, leveraged or financed digital asset trading offered to retail U.S. customers must occur on properly registered and regulated exchanges. Moreover, as the Bitfinex order reflects, the CFTC will take decisive action against those who choose to violate CFTC orders."
The penalties stemmed from the same findings about tether's lack of verifiable reserves that Bloomberg disclosed earlier this month. Since..."at least June 1, 2016 to February 25, 2019, Tether misrepresented to customers and the market that Tether maintained sufficient U.S. dollar reserves to back every USDT in circulation with the “equivalent amount of corresponding fiat currency” held by Tether and “safely deposited” in Tether’s bank accounts. In fact Tether reserves were not “fully-backed” the majority of the time."
The CFTC also found that tether only held the amount of fiat reserves that it advertised during only 27.6% of the days in a 26-month sample time period from 2016 through 2018.
The investigation also showed how Bitfinex helped tether essentially launder its reserves. "...[I]nstead of holding all USDT token reserves in US dollars as represented, Tether relied upon unregulated entities and certain third-parties to hold funds comprising the reserves; comingled reserve funds with Bitfinex’s operational and customer funds..." Tether also neglected to complete mandatory audits during this time. The company even went so far as to put up tether's reserves to cover Bitfinex losses when it was struggling with a hacker-induced "liquidity crisis."
Traders Are Pushing Oil, Rates, & The Dollar. Are They Right?
Traders Are Pushing Oil, Rates, & The Dollar. Are They Right?
Authored by Lance Roberts via RealInvestmentAdvice.com,
With inflation fears getting stoked by the mainstream media, traders are pushing oil, interest rates, and the dollar higher. Are they right? Or, are they about to get smacked by a slower economy and deflationary headwinds?
Once a quarter, I dig into the Commitment of Traders data to see where speculators are making their bets. Such is an excellent metric to watch from a contrarian view. Generally, when traders are positioned either very long or short in a particular area, it is often a good bet something will reverse.
The COT (Commitment Of Traders) data, which is exceptionally important, is the sole source of the actual holdings of the three critical commodity-trading groups, namely:
Commercial Traders: this group consists of traders that use futures contracts for hedging purposes. Their positions exceed the reporting levels of the CFTC. These traders are usually involved with the production and processing of the underlying commodity.
Non-Commercial Traders: this group consists of traders that don’t use futures contracts for hedging and whose positions exceed the CFTC reporting levels. They are typically large traders such as clearinghouses, futures commission merchants, foreign brokers, etc.
Small Traders: the positions of these traders do not exceed the CFTC reporting levels, and as the name implies, these are usually small traders.
The data we are interested in is the second group of Non-Commercial Traders (NCTs.)
NCT’s are the group that speculates on where they believe the market will head. While you would expect these individuals to be “smarter” than retail investors, we find they are just as subject to “human fallacy” and “herd mentality” as everyone else.
Therefore, as shown in the charts below, we can look at their current net positioning (long contracts minus short contracts) to gauge excessive bullishness or bearishness.
Since 2012, the favorite trade of bullish speculators has been to “short the VIX.” Shorting the volatility index (VIX) remains an extraordinarily bullish and profitable trade due to the inherent leverage in options. Leverage is one of those things that works great until it doesn’t.
Currently, net shorts on the VIX are still very elevated but reduced from 2020 levels. However, speculators have once again started to increase their net short-positioning over the last several weeks as the market declined.
The current positioning is large enough to fuel a more substantial correction if markets fail current support levels. Moreover, as noted on Tuesday, weekly signals suggest that downside risk is present. To wit:
“The recent decline triggered both weekly signals for the first time since the March 2020 correction. (The chart below is the same model we use to manage 401k allocations. You can see therelated models and analysis here)“
Given that volatility has remained compressed during the entirety of the September correction, a break below recent support will trigger short-covering of VIX options. Such would also be coincident with a more significant decline in the index.
Crude Oil Extreme
Crude oil has gotten a lot more interesting as of late. After a brutal 2020, the price of oil futures going negative at one point, oil is now pushing above $80/bbl. Given current views of “inflation” from the massive liquidity infusions and supply chain disruptions, the focus on speculative positioning is not surprising.
As shown in the monthly chart below, the price advance in crude oil is now back to historical extremes that have previously denoted tops in oil prices. As a result, the current extreme overbought, extended, and deviated positioning in crude will likely lead to a rather sharp correction. (The boxes denote previous periods of exceptional deviations from long-term trends.)
The speculative long-positioning is driving the dichotomy in crude oil by NCTs. While levels fell from previous 2018 highs during a series of oil price crashes, they remain elevated at 398,307 net-long contracts and rising quickly.
The good news is that oil did finally break above the long-term downtrend. However, it is too soon to know if these prices will “stick.”
Furthermore, the deflationary push and the dollar rally will likely derail oil prices if it continues.
U.S. Dollar Rally Is Here
As I stated earlier this year:
“There are two significant risks to the entire ‘bull market’ thesis: interest rates and the dollar. For the bulls, the underlying rationalization for high valuations has been low inflation and rates. In February, we stated:
Given an economy that is pushing $87 trillion in debt, higher rates and inflation will have immediate and adverse effects:“
The Federal Reserve gets forced to begin talking tapering QE, and reducing accommodation; and,
The consumer will begin to contract consumption as higher costs pass through from producers.
“Given that personal consumption expenditures comprise roughly 70% of economic growth, higher inflation and rates will quickly curtail the ‘reflation’ story.‘
A few months later, the Fed started to talk about tapering their balance sheet purchases.
With the market currently priced for perfection, the disappointment of economic growth caused by the rising dollar, interest rates, and a contraction in consumer spending is a significant risk to the market. As shown, the rally in the dollar is already starting to weaken the inflationary impact of higher import prices and suggests a peak in CPI.
The one thing that always trips the market is what no one is paying attention to. For me, that risk lies with the US Dollar. As noted previously, everyone expects the dollar to continue to decline, and the falling dollar has been the tailwind for the emerging market, commodity, and equity risk-on trade.
As noted previously,
“Whatever causes the dollar to reverse will likely bring the equity market down with it.”
The dollar has been rising very quietly, and traders are becoming more aggressively long the dollar trade.
Interest Rate Conundrum
Over the latest several years, I have repeatedly addressed why financial market “experts” remain confounded by rates failing to rise. In March 2019, I wrote: “The Bond Bull Market,” which followed our earlier calls for a sharp drop in rates as the economy slowed.
At that time, the call was a function of the extreme “net-short positioning” in bonds, which suggested a counter-trend rally was likely. Then, in March 2020, unsurprisingly, rates fell to the lowest levels in history as economic growth collapsed. Notably, while the Federal Reserve turned back on the “liquidity pumps,” juicing markets to all-time highs, bonds continue to attract money for “safety” over “risk.”
Recently, “bond bears” have again returned, suggesting rates must rise because of inflationary concerns. However, again, such is unlikely as economic growth is quickly stalling as liquidity runs dry.
Currently, traders are more aggressively long contracts suggesting rates could still rise a bit further. However, while there is upside to rates, it is likely limited to less than 2% before economic growth gets impacted.
The markets are oversold enough on a short-term basis to rally. However, numerous headwinds are mounting from higher rates, inflation, oil prices, and the dollar. So while traders are piling into inflationary trade, they are likely going to be disappointed.
While the markets can undoubtedly discount these headwinds short-term, they won’t be able to do it indefinitely. Such is why we remain concerned over the weekly and monthly “sell signals,” which are suggestive of increasing risk.
The biggest problem is that technical indicators do not distinguish between a consolidation, a correction, or an outright bear market. As such, if you ignore the signals as they occur, by the time you realize it’s a deep correction, it is too late to do much about it.
I suggest that with our “sell signals” triggered, taking some action could be beneficial.
Trim back winning positions to original portfolio weights: Investment Rule: Let Winners Run
Sell positions that simply are not working (if the position was not working in a rising market, it likely won’t in a declining market.) Investment Rule: Cut Losers Short
Hold the cash raised from these activities until the next buying opportunity occurs. Investment Rule: Buy Low
There is minimal risk in “risk management.” In the long term, the results of avoiding periods of severe capital loss will outweigh missed short-term gains.
Is the US willing to give up the world’s reserve currency to fix its trade deficit?
The balance of trade is an important barometer of a country’s economic health. A trade deficit occurs when the value of its imports exceeds…
The balance of trade is an important barometer of a country’s economic health. A trade deficit occurs when the value of its imports exceeds the value of its exports, with imports and exports referring to both goods and services.
A trade deficit simply means a country is buying more goods and services than it is selling. This situation generally hurts job creation and economic growth, although it is good for consumers who are able to buy cheap imports due to the deficit-running country’s currency being stronger than its trading partners.
The widening trade gap especially with China was a prominent theme in the 2016 US presidential election, and a primary reason that the former US president launched a trade war soon after taking office. Trump thought that cutting the trade deficit by slapping tariffs on goods imported from China, mostly, along with the EU and Canada, would bring back US jobs lost to out-sourcing, and strengthen the economy.
It didn’t work.
The online magazine ‘Reason’ quotes Scott Lincicome at the Cato Institute stating “The tariffs that the Trump administration imposed on Chinese imports harmed U.S. consumers and manufacturers, deterred investment (mainly due to uncertainty), lowered U.S. GDP growth, and hurt U.S. exporters (especially farmers but also U.S. manufacturers that used Chinese inputs).”
Despite this, the tariffs remain and will likely be increased. In an end of September interview with Politico, US Trade Representative Katherine Tai said that the Biden administration plans to build on existing tariffs on many more billions of dollars in Chinese imports and confront Beijing for failing to fulfill its obligations under a Trump-brokered trade agreement.
Indeed the administration appears more focused on cultivating ties with other countries to present a united front against China, than returning to a (mostly) tariff-free arrangement with its largest trading partner.
Meanwhile, writes Reason, While tariffs are pitched to the public as a way to help domestic workers or boost U.S. competitiveness, they always penalize domestic consumers through fewer choices and higher prices.
As for the US trade deficit, is has gone up since Trump left office in January 2021. CNBC reported the deficit hitting a record-high $73.3 billion in August, boosted by imports as businesses rebuilt inventories drawn down during the pandemic.
Goods imports rose 1.1% to $239.1 billion, led by consumer items such as pharmaceuticals, toys, games and sporting goods. Imports of services increased $1.3 billion to $47.9 billion in August. Overall, imports shot up 1.4% to $287B, the highest on record, CNBC said.
Forbes chipped in that the annual trade gap is on track to top $1 trillion for the first time, suggesting that Trump’s tariffs on China and Europe have had a limited impact on slowing US imports.
The article, by subject expert Ken Roberts, notes that Vietnam is a big part of the reason for the deficit increasing. America’s trade gap with its former Cold War adversary through June topped $42 billion, third behind China and Mexico. For every dollar of US-Vietnam trade, only 11 cents is a US export.
The other reason is the unusual situation US consumers find themselves in. Prone more to spending than saving, a lot of Americans hunkered down during the pandemic, preferring to hold off on major purchases and pay down debt. Roberts explains:
There has been and still is a lot of money in the pockets of consumers and businesses, thanks to the largesse of the U. S. Congress and its efforts to stave off the ill effects of the Covid-19 pandemic on the economy, and to the Federal Reserve’s interest rate and other policies, with the same goals. Those efforts have succeeded, perhaps too well.
The economy continues to grow rapidly, though it is perhaps beginning to show signs of slowing, with demand outpacing the supply chain’s ability to keep up, leading to inflation.
The inflationary theme is one we at AOTH have picked up on and written a number of recent articles about.
The US Federal Reserve’s official line is that inflation is only temporary, however we see things differently.
In June the US consumer price index (CPI) surged by 5.4%, the most since 2008, as economic activity picked up but was constrained in some sectors by supply bottlenecks.
The pandemic has put tremendous pressure on supply chains, and the prices of many agricultural commodities such as grain, corn and soybeans, have skyrocketed, as shown in the food inflation chart above.
Several industrial metals have enjoyed significant price gains, too, including copper, nickel, zinc, lead and aluminum.
The US government is reportedly stepping up efforts to relieve the “supply chain nightmare” that has led to shortages of some goods, higher prices, port congestion, skyrocketing freight rates, and now threatens to slow the economic recovery.
CNBC wrote Wednesday that the White House plans to work with companies and ports to alleviate bottlenecks. Measures include getting the Port of Los Angeles to operate 24/7, something its rival Long Beach already does, thereby increasing the time spent unloading ships and getting more vessels currently at anchor into available berths.
President Biden apparently told an audience of port operators, truckers’ associations, labor unions, and executives from Walmart, FedEx, UPS and Target, that “For the positive impact to be felt all across the country and by all of you at home, we need major retailers who ordered the goods and the freight movers who take the goods from the ships to factories and stores to step up as well.”
Walmart, the nation’s largest retailer, has committed to a 50% increase in moving goods during off-peak hours. FedEx and UPS will also increase their overnight operations.
To address the truck driver shortage that has added to supply chain woes, the Department of Motor Vehicles is expected to increase the number of commercial drivers’ licenses it issues.
This is all well and good. However I would argue it misses the point completely. The problem isn’t US supply chains, it’s not a shortage of containers, rail cars, truck drivers, nor is it the fact that there are 100 freighters sitting at anchor, waiting to unload. If the United States had done things differently, they wouldn’t have a $73-billion-dollar trade deficit closing in on $1 trillion annually, and there would be much fewer container vessels stacked with cheap Asian goods, certainly not the number currently clogging up the country’s port, rail and road infrastructure.
Had the federal government been focused on protecting American jobs and the US manufacturing base, the current trade flows might actually be reversed, with more goods leaving American shores than are piling up on them.
The reality is, the United States hardly makes anything of importance, it is primarily a services-based economy that sucks in cheap goods from Asia — that is the fundamental problem.
Moreover, don’t be fooled into thinking these supply bottlenecks are all about the pandemic and that once relieved, trade flows will increase and help alleviate the trade deficit.
Successive administrations one after the other have gutted America’s manufacturing base. Gung-ho on globalization, they let overseas merchants supply everything from t-shirts and golf clubs to critical minerals — future-facing metals such as rare earths, lithium, graphite and cobalt.
The result has been a surge in imports and a slowing of exports. According to The Balance, 2020’s trade deficit was much higher than that of 2019, $676.7B versus $576.3B. Last year the United States imported $2.3 trillion in consumer goods while exporting only $1.4T worth, creating a $909.9B goods deficit that was the highest on record. In 2020 the country had a half-trillion-dollar deficit with its five largest trading partners; imports from China, Mexico, Canada, Japan and Germany out-paced US exports to these countries by $551.2 billion.
Sounds like a lot, but what’s wrong with a trade deficit? As mentioned at the top, deficits generally hurt job creation and economic growth. The Balance adds that an ongoing trade deficit is detrimental to the US because it is financed by debt:
The U.S. can buy more than it makes because it borrows from its trading partners. It’s like a party where the pizza place is willing to keep sending you pizzas and putting them on your tab. This can only continue as long as the pizzeria trusts you to repay the loan. One day, the lending countries could decide to ask America to repay the debt…
Another concern about the trade deficit is the statement it makes about the competitiveness of the U.S. economy itself. By purchasing goods overseas for a long enough period, U.S. companies lose their expertise and even the factories to make those products. As the nation loses its competitiveness, it outsources more jobs, which reduces its standard of living.
Key to understanding the trade deficit is the rise and fall of the US dollar. Basically a weak dollar helps exports and a strong dollar helps imports. Exporting countries thus prefer to keep their currencies weaker in relation to their trading partners, while nations that rely more on imports want to keep their currencies strong, benefiting consumers by making imports priced in other currencies cheaper.
The United States is uniquely beholden to trade deficits because it has the world’s reserve currency. While many including US President Trump have used the trade deficit as a kind of punching bag, while advocating for a lower dollar, the reality is the US dollar’s reserve-currency status goes hand in glove with a trade deficit. Politicians don’t seem to know this, but economists do, as do we at AOTH. What does it mean?
The Triffin Dilemma
The dollar as the world’s reserve currency can only go so low because it will always be in high demand for countries to purchase commodities priced in US dollars, and US Treasuries. Nor should it be allowed to go too low, because that would risk the dollar losing its “exorbitant privilege”.
Because the dollar is the world’s currency, the US can borrow more cheaply than it could otherwise, US banks and companies can conveniently do cross-border business using their own currency, and when there is geopolitical tension, central banks and investors buy US Treasuries, keeping the dollar high – self serving act, keep the dollar high, your currency low. A government that borrows in a foreign currency can go bankrupt; not so when it borrows from abroad in its own currency ie. through foreign purchases of US Treasury bills. The US can spend as much as it likes, by keeping on issuing Treasuries that are bought continuously by foreign governments. No other country can do this.
The cost of having this privileged status is the country that has it, must run a trade deficit with the rest of the world. It can’t have the strongest currency, and also keep the currency low in order to increase exports.
This is explained in a previous AOTH article titled ‘The Triffin Dilemma Will Create a 3G World’. Here is an excerpt:
When a national currency also serves as an international reserve currency conflicts between a country’s national monetary policy and its global monetary policy will arise.
“In October of 1959, a Yale professor sat in front of Congress’ Joint Economic Committee and calmly announced that the Bretton Woods system was doomed. The dollar could not survive as the world’s reserve currency without requiring the United States to run ever-growing deficits. This dismal scientist was Belgium-born Robert Triffin, and he was right. The Bretton Woods system collapsed in 1971, and today the dollar’s role as the reserve currency has the United States running the largest current account deficit in the world.
By “agreeing” to have its currency used as a reserve currency, a country pins its hands behind its back. In order to keep the global economy chugging along, it may have to inject large amounts of currency into circulation, driving up inflation at home. The more popular the reserve currency is relative to other currencies, the higher its exchange rate and the less competitive domestic exporting industries become. This causes a trade deficit for the currency-issuing country, but makes the world happy. If the reserve currency country instead decides to focus on domestic monetary policy by not issuing more currency then the world is unhappy.
Becoming a reserve currency presents countries with a paradox. They want the “interest-free” loan generated by selling currency to foreign governments, and the ability to raise capital quickly, because of high demand for reserve currency-denominated bonds. At the same time they want to be able to use capital and monetary policy to ensure that domestic industries are competitive in the world market, and to make sure that the domestic economy is healthy and not running large trade deficits.
Unfortunately, both of these ideas – cheap sources of capital and positive trade balances – can’t really happen at the same time.” — ‘How The Triffin Dilemma Affects Currencies’, investopedia.com
For the United States, the only way out of the Triffin Dilemma is for the US to quit the dollar being the world’s reserve currency. That would give the central bank the freedom to raise or lower interest rates, and increase or decrease the money supply, without fear of denting the value of the dollar in relation to other currencies which also lessens the government’s ability to borrow from its trading partners (through issuing Treasuries) to finance its debts and spending.
An analysis of reserve-currency alternatives is beyond the scope of this article, however suffice to say there are essentially three options, explained in detail in this Wall Street Journal piece: 1/ muddle along under the current “dollar standard”; 2/ turn the International Monetary Fund into a global central bank that issues “special drawing rights”, a kind of international reserve asset; 3/ adopt a modern international gold standard.
I’m not suggesting the country is anywhere close to dropping the dollar as the reserve currency. I only wish to point out there is a fundamental disconnect, in the United States, between domestic policy and the international monetary order.
Consider: despite everything that Trump did to try and lower the dollar, including badgering Fed Chair Jerome Powell and accusing China of devaluing the yuan, yet failed, Biden is attempting to do the same thing.
A New York Times article explains how Biden, like Trump, wants to revive American manufacturing. To deliver, he has to do something about the strength of the dollar, which according to a US dollar index chart DXY below, has mostly moved higher. Starting the year at 89.14, DXY currently sits at 94.00.
The president has reportedly hired a handful of senior economic advisers who are concerned about the dollar’s strength and have explored ways to reduce it. Sound familiar?
The Times notes the dollar’s strength over the past few decades has bloated the trade deficit which tripled as a share of gross domestic product in the 1990s and has remained high.
At its simplest level, the trade deficit represents a kind of leakage from the U.S. economy: Americans buy more in goods and services from abroad than the rest of the world buys from the United States, and the country takes on foreign debt to pay for the difference. If Americans bought more domestically made products and fewer imports, the spending would create jobs for U.S.-based workers and require less debt.
The above paragraph more or less summarizes my position, which is that the United States can’t continue to hold the world’s reserve currency if it wishes to devalue the dollar, thereby returning lost manufacturing jobs, increasing exports, and lessening the trade deficit which, at nearly $1 trillion, is getting as out of control as the $28 trillion national debt.
It can do one or the other, but it can’t do both. Time to stop seeing the dollar as a means of instant gratification and look to a more permanent solution that will allow the US to escape the Triffin Dilemma.
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