Despite the “Dollar’s Collapse,” the USD remains in its 3-year range and a lot higher than it was before.
By Wolf Richter for WOLF STREET.
The Dollar Index [DXY], which represents a basket of six currencies dominated by the euro and the yen, the two largest trade currencies behind the USD, “plunged” or whatever to 99.78 today, down from 109 at the beginning of the year.
And all kinds of theories have been concocted why this dollar-collapse scenario is playing out:
OMG the dollar is still in the three-year range: The DXY’s range from April 2022 through today went from 99 to 114. In July 2023, the dollar was lower than today, and at the beginning of April 2022, it was lower than today.
Today was the first time the DXY plunged below 100 since… July 2023.
And it’s far higher than it was before that 3-year range. In early 2021, the DXY was climbing out of the basement, after having dropped below 90.
Just a few months ago, in late 2024, people were complaining how the dollar was way too strong and was killing earnings from US companies with business overseas, and was killing US exports, and emerging market debts, and whatever parade of horribles a strong dollar engenders, and that the Fed needed to do something to whack down the dollar:
OMG the dollar is still fairly high historically. For a lot of time since the 1970s, the DXY was below 100, and for some periods below 80, and as low as 71. So over the long term, at around 100, the DXY is in a “good place,” as the Fed would say.
Look, I was having a little bit of fun here with the dollar collapse theory? Chaos is never good. And now there is chaos. More chaos than most people are comfortable with. Entrenched businesses hate chaos and love high and continually rising stock prices. Everyone loves those. Free money, but from the private sector.
But chaos is also good because it allows for new stuff to germinate, for new ideas to elbow their way to the surface. And it pushes entrenched companies to change. The US economy is most dynamic when jostled a little. Businesses adjust. And lower asset prices – maybe as foreigners lose interest in gobbling up US assets at whatever prices? – after 15 years of the most astounding Everything Bubble, caused by money-printing and interest-rate repression, aren’t that surprising. And a return to some sort of normalcy might not be such a bad thing. And the dollar is just fine, doing its job indefatigably day-in and day-out.
In terms of the dollar as the dominant reserve currency, well, it still is, with a share of 58.7%, and well ahead of the next one in line, the euro with a share of 20%, and well ahead of a gaggle of smaller currencies, but that dominance has been declining very slowly: Status of US Dollar as Global Reserve Currency: Central Banks Diversify into Other Currencies and Gold
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I saw a utube video of you an someone else but you basically called this recent stock market downturn
Howdy Folks. Wallstreet and China sure is fighting whats coming. Who will win?
Nobody ever wins a trade war.
Howdy SoCal. A reciprocal trade war will make the consumers winners.
How do you figure that?
Howdy Troy. China cheats and steals.
Well we have the ace in the hole the FED and I hope the average american in 2 years wins as we finally have good jobs again instead of trying to do 3 things a week to pay rent or save up to buy a house. And we support better countries like Mexico, Vietnam, S Korea, etc instead of a horrible government that is a one way street.
Howdy A A. If 70 or 75 countries reciprocate, we are well on our way.
So many are tired of the leaches and cockroaches around the world.
Howdy DFB. If the world has true Free Trade, countries following the rules like they should. The world wins and especially USA. We buy the most stuff with the most sober/drunken sailors and deserve to be the winners…….
Its time to smash the leaches and cockroaches. They are dead to me…..
The dollar collapsing shit is the funniest thing I’ve heard in awhile. Everyone is so short term focused.
“OMG the Dollar Is Collapsing, or Whatever”
I’ll go with the Whatever!
The title could have been:-
“OMG the Dollar Is Collapsing, or Whatever” and the US 10yr Tr yield is rising!
And J P Morgan claims there is a liquidity problem.
The 10-year yield is back where it was a few weeks ago (mid-February) and is still too low for this inflationary environment. It should have never plunged like it did earlier this year, when it dropped from 4.8% to 3.8%. It’s now back to 4.5%, and just recovered part of the drop.
I’m still hoping for the 5 or 10 year to hit 5%. Then I will load up the IRA! No longer than 10 years, though, as my life clock is running out.
I agree. I would not buy the 10-year bond at this rate. Historically, since 1950, the effective (average) annual inflation rate has been 3.5%. Say the 10-year pays 6%, after taxes 4%, net 0.5%.
I wonder: Why is the 10-year bond not 6% or higher? Who, except for insurance companies and central banks, buys at 4.5%? If the answer is “prudent investors”, I will say that the only certainty is that they will lose money in constant terms.
It’s collapsing since Trump took office. Is that not true?
🤣 The BS never ends, endless supply of BS, no BS shortage ever. It was collapsing three times during Biden’s time, including in 2022 when it collapsed from 114 to 100, much more than now. Look at chart #2.
It’s not “collapsing” at all, it’s in a trading range. RTGDFA, you doofus
In 2022, gold barely moved. In the meantime, gold was already up 23% YTD. You can argue that the dollar is within “healthy range” against the basket, but its value against gold is definitely collapsing.
You can also say that since the basket is also depreciating against gold, the dollar doesn’t look odd. But what about its purchasing power? Remember we are still in QT.
Gold is an asset. The dollar is a currency. Apples and oranges. You don’t invest in a currency. You invest in assets. Your bank account is an asset (a loan you made to your bank and get paid interest on). Stocks are an asset. RE is an asset. Compare gold to other assets, such as stocks or RE. Compare currency to currency. So how did gold fare against stocks, that’s a valid comparison. How did the dollar fare against the yen is a valid comparison.
62% of the increase during 2021 and 2022 erased, while the trade deficit has increased. The result of the huge trade deficit during 2020 and 2021 was an inflation rate of around 10%, that’s why the yields had to increase so much, to attract the needed amount of capital to balance the huge deficit of the current account, and the dollar appreciated. Now, the deficit is even higher than 2021, and the dollar weaker, so how much will be the inflation rate this time?? On the other hand, 4.5% 10 year yield is not enough to stop the capital outflow, and equities can’t attract more capital inflow, because both markets have been damaged by the huge volatility caused as consequence of Tump’s trade policy. If you check IG fixed income yields you will notice a very concerning patern, which indicates that if the IG yield breaks above 5.8%, there is a huge probability that we will see a significant upside movement in IG yields, with minimum level above 6.5%. So, if 4.5% 10-year yield is not enough to stop the dollar devaluation, and yesterday spread between the 10 year government notes and IG was at above 130 basis points, what do you think will happen next week?? Also don’t forget the current state of the banking sector, Comercial RE and Private Credit. Have a look at the movements of bank shares prices of the last 2 days. To make it easier for you: will we have hyperinflation or a Financial crisis??
One of my all time favorite roasts on this site. Quick and to the point. Just thought I’d leave that here…..
Every guest Adam Taggart has had the last 2 weeks has been saying the Reckoning is Now and recession is next. Wolf has been on multiple times.
About time we had one the last recession was 2009 2020 did not count we all stayed at home in our PJs and got stimulus checks. Businesses had so much cash they gave it back. I had 3 associates that got 200k+ just deposited in their account they did not apply for at the end of the loan portion of the stimulus in 22 with an email and the documents saying sign this or return it at like 3% interest after the first year. I believe much of our consumer entitlement and social issues stem from not having to sacrifice in any meaningful way for 16 years. Under 35 you have no idea what it means to sacrifice anything. I was a senior in high school for 1987 and had no idea it was happening until I studied it in college 5 years later.
AA – …no comment…(…and the sub-35 that might are no longer able to answer…).
may we all find a better day.
The dollar may decline to the mid 80’s. Then we’ll have something to write about. Until then ho hum.
Mr. Wolf writes: “The Dollar Index [DXY], which represents a basket of six currencies dominated by the euro and the yen…”
It seems that if all six fiat currencies are declining as well, that the dollar may appear better relative to those currencies, but may explain the dollar’s performance against the price of gold.
If you do not like the dollar try some gold. It has been around a while.
When in doubt…
Zoom out!
So…
Dogs and cats are not living together…yet?
US dollar???
I kinda prefer Charmin.
Thank you very much.
I’ll trade you. All your worthless US dollars for my 6-pack of Charmin.
Careful, a Canadian might take you up on that offer as it is their go to crisis impulse buy.
Is this not what’s intended by Besset and his papers?
Get the foreign owners of US assets to sell them, and in turn, repatriate their assets, which in turn lowers the dollar and changes the trade balance to favor exports.
He’s talked in interviews about having to get other buyers to buy some of the critical assets like treasuries, but if that was the game plan, it seems right on schedule?
US Treasury Sec. Bessent: US has a strong Dollar policy
NEWS | 04/09/2025 12:06:52 GMT | By Eren Sengezer
Seems like when tariffs get to this level and stay there trade virtually stops. US share of Chinese exports is about 13% so not insignificant but not huge. Part of Chinas GDP about 2%. US will need to find other markets for things like soybeans as China will just shift to Brazil. Not sure a little up or down in the dollar matters if things stay this way.
I’ve been thinking about China’s “shift to Brazil” so to speak. China has 1.4B mouths to feed. If they stop buying food from the US and instead buy from Brazil or the EU or whoever, then the global food supply shifts but ultimately most of the food is still purchased and consumed. I doubt there is a surplus of food being purposefully grown then dumped in the landfills. – it all goes somewhere to feed someone.
We sell China food and they sell us plastic toys and TVs. Who can really go a year without that shipment?
In the current context, if Trump is making America great again, people were not expecting the dollar to buy less. So it looks like a 10% decline. When you look at a longer time frame, the last few months don’t look all that serious….but the chances of a downturn are pretty high. And there is that pesky $37 trillion of federal debt on which we must pay the interest or very bad things happen.
A lower dollar is good for the economy (though not for consumers), which is why the Trump administration advocated for a lower dollar back in March.
If every country tries to push down their currency, it’s called a currency war. And it’s frowned upon.
Wolf, long time reader, but first time commenting. I really appreciate your economic commentaries.
In this scenario, softening dollar, inflation, shaky stock market in which the big players are waiting for opportunity a la Warren Buffet with his piles of cash…where is this capital actually sitting? Are they putting it in high yield bank accounts? I can’t imagine anyone with that kind of money is truly content to receive a small amount of interest in the name of patience. Or are they?
Buffett told everyone where his cash is sitting: In T-bills. There are $6 trillion in T-bills outstanding. There are $18 trillion in bank deposits. There are $7 trillion in money markets (some is double-counting the T-bills). There is commercial paper and other short-term investments that are held as cash.
The question isn’t “are they content receiving 4.3% in interest on their cash” but “when will they deploy their cash to buy?” Earning 4.3% on cash, or even 0%, is a heck of a lot better than losing 50% on risk investments. Then when investments that you don’t hold have dropped 50%, you can buy them with your cash. That’s the actual thought process you’re asking about.
Strong Currencies rule the World .One of the problems of the so-called Emerging Economies is a strong $.They may have some relief.
I thought consumers WERE the American economy?
Consumers, as such, aren’t exporters, right? By proxy as stockholders, somewhat.
I’m a prof with lots of foreign students, which makes me a services exporter, as well as an exporter of supposed instruction about the Constitution and “the rule of law” in the USA, but we’ll see all how that goes, as the new mass reality TV reality eats the world ….
Consumers are only part of the American economy. The other parts are businesses and governments. Consumption and investment by all three figure into the GDP formula.
Consumers are in the group called “taxing Units”.
A lower dollar will have the same effect of Tariffs, without the political damage that Tariffs are making to his popularity. Thats why he wants countries to make a deal, by forcing them to buy Long Term treasuries in exchange for lower tariffs. Its like a YCC blackmail to push down the long end of the curve and make US be able to roll the 9 trillion maturing this year to longer dated bonds
Looks no-so-good for me, due to my living expenses in Thailand funded by conversion of my US$ to Thai baht (THB). Not that bad, because USD-THB is still about 10% higher than 4 years ago.
Keeping the dollars for as long as possible earning 4% in short-term Treasuries or CDs may compensate a little. And once I convert to baht, inflation here is usually less (under 2% for 2023 and 2024).
Otherwise – GO STRONG USD!
At the heart of Capitalism is Destruction – and then ADAPTION!! As is said “it’s not the biggest or strongest who survive, but those who are prepared to adapt”.
Those who survive the best are the biggest and strongest who are prepared to adapt. I envy those guys.
The dollar is the prettiest horse in the glue factory………all the “FIAT” currencies are going to lose value dramatically over the next 10 years, as the money helicopters fly again..
Yes, every country prints, blips way to much “currency”. It is sort of a “if we do not do it they will” thing. Please add up all the currency, perhaps include all the “bitcoins”, in circulation now verses ten years ago. World currency in circulation now verses previous years ought to be quite a revelation.
DXY is a trade-weighted index, where the euro contributes 57.6% and sterling 11.9%. Although a falling dollar is pushing up the euro, the EU seems to be playing the tariff game better than the US, IMHO.
The EU has threatened to tax US IT companies. This is the only sector of the US stock market making consistently large profits. (The ‘motor vehicles and equipment’ sector only ever makes tiny profits – BEA table 6-16d.)
Lousy yields in Euros even though there are no fundamental reasons why it should be a harder currency than the USD, given the debt levels.
Current ECB data show govt. bond yields for 3 months duration at only 2.2%, 2 years 2.0 % and 10 years at 3.2%.
Overnight money (ECB deposit facility) 2.5%.
Better to buy US 3 month treasury bills yielding 4.2%.
I think people have a very difficult time grasping the fact that a floating currency is a feature (as one of the core elements of monetary sovereignty and maximum fiscal policy space) rather than a bug.
But I suppose that’s unsurprising when most people think that money is an object or commodity (and something that belongs to themselves in a personal way) rather than what it really is: a tool of statecraft.
“Where are you, Georg Friedrich Knapp? You are our only hope!”
I appreciate Wolf’s common sense, non-hysterical approach to the subject of economics
With regard to the chaos theory, the problem I see is that we do not have plans when we could and should. We had a grand “Liberation Day” announcement of tariffs, and we are all supposed to get ready to “take medicine” and then the tariffs (except for China…but now who trusts that will last?) are put on hold for 90 days (and what are the criteria for then putting them back on?), with the sole explanation that people were getting “yippy”–so are we going to be liberated or not? Is there any plan? I do not see how this pattern of making grand plans (and there are many) that are not realistic, putting them in place in a half-baked way, and then not executing is a productive form of chaos for our economy. What it would seem to do is erode confidence internally and externally in the U.S. to the point where nobody trusts anything that the government says.
I see a model in this administration of continuous tension-filled drama, with shifts in attention focus and levels of tension within each news cycle, which is intentionally engineered as such. It borrows heavily from reality TV. For example, we barely digest “liberation day” before the focus shifts to supposed Iran talks, then cycles through immigration enforcement surprises, logging California’s forests, on and on. I guarantee it will continue in this pattern. The precedents were there in Trump behaviors and utterances before, but it has all been scaled up and made a core feature of “governing.” Disrupting expectations is absolutely a central feature.
Vis your last sentence: that ship sailed a long time ago.
I think there is a huge grand plan but if you tell people then it is no longer a plan. To assume anything you are able to read or hear is a plan and to reassure people like you blows up all of the suffering you are pretending exisists which is really just your way of saying – hey man we had it really good for 15 years one of the longest growth periods in America unfortunately we did not do it all the right way like after WWII and instead focused more on profits which shipped work overseas even more and we increased our federal deficit by 300% (since 2009) to have our government spend like drunken sailors so now consumers that should be in the best position since the 50s have spent it on things your grandparents would never dream of wasting money on so you have no savings to weather the inevitable slow time that has to come as we rebalance.
Are you serious? You trust what the government says? Come on, did you forget the /sarc tag?
And the last 4 years were different where they straight up lied to your face?
To even compare the lying (both quantity and quality/intensity) between the current and previous administrations is hilarious. These current guys can’t speak more than a sentence or two without either a gross exaggeration, twisting of a fact, or an outright lie. It’s truly amazing.
I’m just guessing that you vote Democrat and never actually looked at all the shit the last admin lied about. Both can be true
Good comment ”Stymie”,, so I will try to respond as rationally as your comment:
Trump IS and always has been a ”Loose Cannon.” There really is no dispute about that these days within either USA political ”party”, now or earlier.
To be clear where I am coming from, I don’t like him personally, but DO like many of his policy moves, etc.
How some ever: The main danger of ANY loose cannon is not that they can and do/have done many times kill those who try to restrain them, but that, eventually,
IF not constrained,,,
Loose Cannons will and have done, roll back and forth until they burst through the hull of the ships they are on and cause the ship to sink.
IF you can get your mind around THAT as a clear warning,,, you can understand the current level of danger.
1. Whoever wins trade war, consumer losses. The little guy in other nations also lose. Even if the stocks go down, who has the money to buy wins.
2. Now, the media and web are hyper polarized. we cannot have a moderate thought full discussion no more. you are with the other side! ain’t so? (they get real money kickbacks and ideological validation)
3. The current tariff situation is the reason why no single man should hold too much power to cause a storm in the world.
4. Even if the tariffs are imposed now, after 4 years, what will happen after the elections? Why the companies should shift the entire facilities to US today?
Elections? Weren’t you paying attention? Our Dear Leader said we would never have to vote again.
True, businesses hate chaos. But those of us who grew up listening to the Dead Kennedys find it a bit nostalgic.
Unfortunately, now the Average Joe is ” Too Drunk to Phuck” ( tee hee)
The steep slope and associated timing (tariff cluster)of the dollar index curve is the concern. Not the resultant index level. Yet.
Trump and administration have many correct ideas about the “corner America has painted itself into”. Some, not all, of their solutions are also on target; however, Trump’s flawed and distorted personality continues to bungle things badly.
When it comes to economics and change, maintaining some level of confidence with the public is key. I don’t think anyone would disagree that the interconnectedness of the US/World economy makes this a very complex (and potentially fragile) structure….lots of interrelated and moving parts. So, shock and awe is NOT the best approach. Trump needs to take a lesson from Xi and Putin.
For those who keep touting the everlasting role of the dollar in the world, a word of caution. The world is multipolar once again and is moving towards a gold/commodity backed trading currency to replace the dollar. Trading, not reserves. But as that continues the dollar will have less and less importance and will come home to roost with higher inflation in the US.
With respect to reserve currency, the world will be seeking a neutral reserve currency as no country wants to hold the whole bag. That too, will end up with gold in some fashion (some predict bitcoin, but I doubt that).
This has all been in motion for a number of years and will continue to play out. My guess is another decade, but something could snap and it could be much quicker.
If you don’t own some amount of physical/near physical gold in your vaunted portfolios, you are going to have regrets. 10% of assets used to be the conservative target, but I believe with changes we are seeing, a minimum of 25% is prudent. IMHO.
If you are going to own gold, it’s best to have the physical stuff in hand, not some electronic digits on a website which you have no control over.
BS, or at least not correct MR:
Own all the garden and farm land you can get now,,,
While also learning by both ”study” and hands on/OJT how to grow not only your own food, but food for as many or all of your neighbors without ANY inputs from outside of your garden/farmstead.
Will this be the DELTA to enable you and yours to endure,,, NOBODY KNOWS, and if anybody claims to know THIS future,,, or any other future, ”they” are scammers to be avoided…
There is a tipping point to everything. It is not the dollar or any other “money”. How about a chart on trust in goverments.
Say what you want about the future of the dollar, but diversifacation is a proven tool.
Even Blondy can’t have everything his way. Can anyone remember when we were more divided as a nation. Is the honeymoon over and all we have is the arguements?
We have been this divided since at least COVID and even before.
COVID was my line. The lockdowns were pure chaos
Agreed, they were a huge mistake in hindsight.
I disagree about the being this divided before. It’s been a gradual dialing up as politicians have figured out how beneficial it is to them to push it further, to get both halves of the country to hate each other. I think it really picked up steam when Mitch said his job was to make Obama a one term president (rather than, you know, doing his best for America).
All this division brings ever increasing instability, which cannot be good long term for business…or anything.
You are so right! 1.1 million deaths from Covid was not nearly enough. We can easily do 2 or 3 million next time!
Lockdowns were never in the pandemic playbook before COVID because the costs outweighed the benefits. Literally every playbook didn’t have them… Until China did it during COVID.
You can protect the vulnerable without shutting down the entire economy.
But I guess critical thinking isn’t your strong suit since you rush to hyperbole
My bet is that China will win the trade war.
If the dollar stays strong against the renimbi (and/or other MMT currencies) it mitigates/obviates the impact of American tariffs.
Furthermore, China’s command economy is much less sensitive to political whining.
If you don’t believe it, please explain all-time high in price of AU.
so he completely caved. he just exempted smartphones and computers from the tariffs. wall street and silicon valley are firmly in control. apple has nearly a 50% margin on their iphones, so they could have afforded some tariffs. but they, and the corporate owned media fed the lie that iphone prices would go to 3,000 usd, and it was snapped right up.
the whole speech from bessent “we’re going to allow some pain for wall street so main street can get a turn” was obviously complete bs.
Now that Trump is back tracking on China tariffs, the market can rally and everyone back to business as usual.
He backtracked on the new 125% reciprocal tariffs only for smartphones, computers, and related products. He didn’t backtrack on other products. And even the products that are now exempt from the reciprocal taxes are still subject to the 20% tariffs on Chinese products.
It was the bond market that forced his reversal. He and his team overplayed their hand. Now everyone sees this and in the end the only result will be the weakening of the US’s standing in the world.
bs. the 10 year going to 4.5% is not the bond market blowing out.
that was just wall street’s way of whining to get what they want.
@FranzG that’s both hilarious and telling. Obviously, Apple has better lobbyists than Detroit.
Cellphones, computers, etc. are exempted only from the new 125% reciprocal tariffs on China. It seems the prior tariffs Trump put on these products, including the 20% tariffs on Chinese products, still apply. So they’re not tariff free.
Sobriety is often a good thing.
Sobriety is boring as all fu©k, but that’s the point.
Boring is good. Boring let’s one plan and execute. Boring is that rising tide lifting all the boats. After the chaos, after the fall, we’re all gonna be ready for a little sober boredom
This episode hasn’t been good for Brand USA. I sense a fundamental shift, a lasting distrust, and a genuine distaste for “American exceptional ism” taking root. Weaker dollar vs. stronger dollar…it ain’t good going forward and damage has been done.
A weaker dollar will be good for the US economy (favoring exports over imports), which is why in Feb/March the Trump administration advocated for a weaker dollar. And they got it.
Where will you export to? The tariffs kill exports.
LOL, no they don’t “kill” exports. Though there may be some clickbait BS headlines in the media to that effect. Tariffs don’t even “kill” imports.
Do you have like any facts or do you just post your feelings?
Facts? Like a 70% drop in travel from Canada to the US? Or the complete removal of US made products from Canadian stores? Or the widespread travel advisories from many countries advising against travel to the US. You mean like those facts?
Again you aren’t smart.
All Tourism is 2% of GDP. International tourism is way less than that. Canada doesn’t buy that much from us. It is barely a drop in the bucket.
You can actually read and educate yourself but people like you on the left let hatred just blind you constantly
And I will sacrifice pissing off Canada lol, for a secure border any day. That was actual chaos and violent chaos and the last admin literally didn’t give a shit
Eric, you are being silly. The Canadian border has never in my lifetime been violent and chaotic (I’ve always lived near the border). As a friendly remind, Canadian’s are one of our major traiding partners, and our friends.
The main narratives I’m seeing in the financial media are that:
– The dollar and treasuries are selling off together, and so the US markets are acting like emerging markets which doesn’t indicate confidence.
– Consumer confidence, inflation expectations, government approval ratings and GDP indicators are all going the wrong way.
– Some people are also comparing the stock market volatility to that of meme coins and saying that can’t be a good thing.
– The tariff rollout has been chaos, and is based on dubious legal theory and political support and economic calculations and are instead really just the whims of one person. The result is that nobody expects the tariffs to be in place 2-5-10 years from now when we have our domestic iPhone factories or banana plantations or whatever up and running, so manufacturers and importers are just throwing their hands up.
It’s just a correction. Anyway, I had some losses in my trading account because of that and therefore reduced my USD holdings by two thirds so far. A very weak USD during the GFC comes to my mind. Trump is a special risk for the financial markets. We just made that experience. My home currency is EUR, so that was an easy decision.
The prospect for our twin deficits is bleak. Trump has increased the defense budget and has yet to cut the planned deficits. And higher tariffs translate into higher trade deficits in the short run. The markets are just adjusting.
Many decades ago, the mantra of businesses in the US was “innovate and profit will follow”. New products replaced entire industries.
Today, I see companies frantically searching to find 10 cents of savings on a commodity product that has essentially been the same for 20 years. In this environment, tiny changes like the value of the dollar or interest rates are big deals.
I wonder how many companies will wish they had the piles of money they spent on stock buybacks in their accounts right now to help them weather the coming storm.
Terrahawk, the stock buybacks were done at the time enrich corporate management. They don’t wish they weren’t done, and as a matter of fact, they (corporate management) would probably like to do another buyback before profits go south once tariffs are introduced on their products.
I’m really worried that black rock might not be able to buy a bunch of US real estate and artificially drive up prices and rents. Also really worried about private equity and activist investors squeezing everything to earn 1 more cent per share.
Won’t anyone think of the large hedge funds who have made billions?
LOL. Careful, some may miss your sarcasm there.
FYI, BlackRock has not ever bought SF homes (you may be thinking of Blackstone, totally different deal). Even if they did, I’m not sure how that makes rents “artificially high”.
Yeah I meant black stone. More money in the market means prices go up basically
The demand for money, the desire to hold safe liquid assets, has recently risen, velocity fallen.
Assets and Liabilities of Commercial Banks in the United States – H.8
Large CDs
Nov -5.5
Dec -3.1
Jan -14.0
Feb 1.3
See surge in MMMFs: Money Market Funds; Total Financial Assets, Level (MMMFFAQ027S)
https://fred.stlouisfed.org/series/MMMFFAQ027S
In my opinion, IF we are really interested in reducing the trade deficit (I am not sure we are serious about it), we should do two things.
1. Reduce the federal budget deficit a lot! To zero would be best. (Remember that there are unfunded liabilities at the federal and state levels in addition to the headline budget deficit.)
2. The reduced fiscal stimulus would ultimately lead to lower interest rates and a lower dollar.
I agree we need to reduce the deficit. However, Reduced G spending would drag down GDP. So we would need to increase net exports for sure. A lower dollar would probably help in that sense. But a lower dollar could also decrease consumer spending right? Lots of scales to balance.