The potential for a catastrophic loss of confidence is growing
-The Harris/Biden regime’s recently announced fiscal policies are domestically oriented towards consumption, and despite the regime’s intention of more effective tax collecting efforts, fiscal deficits will persist and grow.
-As consumption is encouraged via this new deficit spending, the current account and balance of trade will continue falling further into negative territory as this fiscal spending will continue to relatively stimulate the domestic economy.
-The proposed higher corporate tax rates and socialist worker policies will only help to accelerate the offshoring of production and trade to lower taxed jurisdictions.
-As long as the USD is accepted for trade, these dollars will be repatriated by foreigners back into the US and into USD-based assets.
-The US Fed will continue to accommodate the Federal government’s domestic largesse by suppressing interest rates.
The growing risks from the Fed’s willed ignorance
-Though inflation may prove transitory in a linear fashion, my concern is that the USD as a reserve could continue to lose confidence moving out to mid-decade. This will provide the catalyst for prices to continue rising domestically, even as economic growth rates here subside when compared to year over year data.
-Demand for USD-based stocks as well as residential and key commercial real estate assets should continue to remain firm, regardless of economic circumstances. The nation’s capital and financial accounts will be in ever larger surpluses as the US’s trading partners will continue to dump their dollar holdings into tangible USD assets, except bonds. Stocks and real estate will be the largest recipients.
-The Harris/Biden regime seems to be encouraging the demise of the dollar as a reserve and these latest fiscal initiatives will only accelerate this. Foreigners will increasingly become concerned regarding the existential state of the USD. Based on my analysis of their actions, and not their words, it’s my conclusion that the politicians here in power actually hate the U.S. and prefer a global government.
-These hostile powers are using the push button calls of the manufactured COVID crisis, racism, and social inequality to further their objectives to destroy the nation’s finances, investment and business environment, and the dollar. Critics to their plans have been muzzled from political correctness, and there is no longer any restraint.
-A risk to investment residential RE; As prices continue to spiral upwards, the Harris/Biden regime may begin to place ownership restrictions on investment residential real estate. Any types of these actions would only further hurt the value of the USD.
-The US Fed’s willed ignorance regarding the potential of a catastrophic loss of USD confidence due to its policies as well as its blasé attitude towards the government’s naïve fiscal initiatives is duly noted here.
-By promoting the growth of ever larger trade deficits since the 1970s, the Federal government encouraged the use of the USD in the global marketplace, and thus encouraged foreign ownership of domestic assets. Reimposing ownership limitations of any kind on US assets,would hurt the USD.
Stocks, real estate, gold, (and everything else) top my list
-Despite what the gold promoters in the West are claiming, the data in the charts below are telling me that no countries are yet ready to link their currencies to gold. The gold shilling of China and Russia moving to a gold-based currency link seems to be coming from the West, and not from Russia and China directly. Though these nations may be frustrated with the current USD hegemony, moving to a gold link now is certainly not the answer. Any gold linking to the yuan would instantly destroy China’s export markets, as the yuan would rise higher. The CCP is currently trying to weaken the yuan’s recent run up against the USD, so going to a gold link would not make sense.
-Regardless, gold should continue moving higher; even commodities priced in dollars. Gold has been rising here less from Basel III regulations and more from the latest fiscal/monetary monstrosity coming from Washington and the Fed. As long as the Fed continues to suppress interest rates, while inflation rises from artificial domestic demand and a loss of USD confidence around the world, the globe’s appetite for the USD will suffer. Gold will benefit, perhaps sooner than later.
-Based on the charts above, Russia’s and China’s banking and monetary situation in many regards is more dire than the US’s. Russia and China have recently been hyperinflating their money stocks, and I suspect that they are doing so to juice their economies, because they know war is coming.
If the United States cannot get its fiscal and monetary houses in order, there will be a lot of anger spread amongst the nations of the world, and it will be directed squarely at the United States. Of course, I have to believe this is being done with intent. What better way for an enemy to destroy a country than to win its elections and control its monetary policy, and blow it up from within.
Domestically speaking, the vast majority of Americans are unable to place the connection between the massive waves of consumer oriented deficit spending and the escalating prices of everything around them, especially their houses and the prices of everything else.
Did the loss in the faith of the dollar happen that fast? Unless the Federal government has a complete change of heart with spending and can stop taunting its rivals I don’t think we have to wait much longer to find out. We are getting no indication from the US Treasury nor the Fed that anything is wrong. At what point do we have to consider that this is being done by design?