THE KING DOLLAR IS FINALLY IN DEEP TROUBLE
Jim Willie
All important factors are finally putting tremendous pressure on the USDollar. The weak economy will result in lower interest rates, thus more downward USD pressure. The enormous USGovt debt will result in further bond dumps in addition to trade settlement outside the USD, thus more downward pressure. The resentment for threatened hot wars, trade wars, economic sanctions, and SWIFT obstructions will result in amplified resentment. They will respond with a global boycott of the King Dollar, dumping of USTreasury Bonds, and thus more downward pressure. Worse, a global currency war might erupt in the very near future, which might have basis in competing interest rates from monetary policy in addition to competing bond yields. The remarkable fact that has come to the table in the last few weeks is that foreign sovereign bond offerings are having strong demand despite lower bond yields offered than USTreasurys. However, the USTreasury auctions are being gradually noticed as failures, despite higher bond yields offered. The message is crystal clear, that collateral for the huge debt is far more important than the carry, namely the bond yield. Finally the USGovt debt is being questioned, as it rises past the $22 trillion level, as the debt limit is suspended, and as the over $20 trillion in missing funds is publicized. The USGovt financial room is a recognized crime scene.
The global bond market crisis has begun. It will eclipse the Lehman subprime mortgage bond crisis from 2008 in a big way, like with three to five times the impact. The reason is simple. All the errors were repeated from ten years ago. New arrogant errors have been committed. The notion has been........
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https://www.investmentwatchblog.com/the-king-dollar-is-finally-in-deep-trouble/