charles hugh smith-Why the Rising U.S. Dollar Could Destabilize the Global Financial System.
I have been suggesting for several years that the U.S. Dollar would confound those anticipating its demise by starting a long secular uptrend.
In early September I made the case for a rising U.S. dollar, based on the basic supply and demand for dollars stemming from four dynamics:
- Demand for dollars as reserves
- Other nations devaluing their own currencies to increase exports
- “Flight to safety” from periphery currencies to the reserve currencies
- Reduced issuance of dollars due to declining U.S. fiscal deficits and the end of QE (quantitative easing)
Since then the dollar has continued its advance, and is now breaking out of a downtrend stretching back to 2005—and by some accounts, to 1985:
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