March 29, 2018 1:35 PM
This could end America’s free-ride: no more QE; no more balance of payments deficits without tears; and no more foreign financing of the U.S. budget deficit.
We hope the Administration at least is concerned and has it on their radar.
No doubt it is, in part, the result of this (see here).
Posted by macromon
Categories: Dollar, Uncategorized
Tags: BOP deficits, Budget Deficits, Dollar Reserve Status, QE
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Wait, was there any kind of crisis when the EUR transactions were far ahead of the USD SWIFT transactions in 2011 and 2012? Those years weren’t “crisis” years. Looks to me like we’re just heading back to that regime. I don’t see where this alone would keep anyone awake at night.
By gulfcoastcommentary on March 30, 2018 at 6:50 AM
Thanks for comments, Doug. It looks like 2011 &2012 were a blip, probably having something to do with Euro debt crisis. I don’t know. What worries me is this looks like a trend and combined with global push back to the Administration’s policies, it is something we have to keep on the radar. The only thing that saved us during the crisis and the ramp of QE was the reserve status and willingness to hold dollars. Otherwise, QE would have resulted in hyperinflation. It’s going to get interesting. Have a great holiday, my brother.
By macromon on March 30, 2018 at 11:20 AM
[…] What we fear most is the loss of confidence in the world reserve currency status of he U.S. dollar, which is slowly eroding. There doesn’t currently seem to be a viable replacement, however. We do live in a nonlinear world, where technological advancements can rapidly change and turn sectors upside down overnight, so that could change in a heartbeat, […]
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