{"id":56651,"date":"2021-02-06T10:39:49","date_gmt":"2021-02-06T15:39:49","guid":{"rendered":"https:\/\/olduvai.ca\/?p=56651"},"modified":"2021-02-06T22:07:52","modified_gmt":"2021-02-07T03:07:52","slug":"the-u-s-dollar-could-be-nearing-its-end-game","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=56651","title":{"rendered":"The U.S. Dollar Could Be Nearing Its \u201cEnd Game\u201d"},"content":{"rendered":"
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The U.S. Dollar Could Be Nearing Its \u201cEnd Game\u201d<\/a><\/h3>\n<\/div>\n<\/div>\n<\/section>\n
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\"The<\/div>\n

From foreign countries\u00a0trying<\/a>\u00a0to dethrone the dollar\u2019s hegemony as global reserve currency, all the way to rising inflation\u00a0weakening<\/a>\u00a0it\u2026 the U.S. dollar is in trouble.<\/p>\n

Pundits like Jim Rickards\u00a0said<\/a>\u00a0(back in 2016): \u201cThe dollar won\u2019t lose its reserve currency status overnight\u201d \u2014 and he was right. But a new and disturbing signal could finally be revealing the end game.<\/p>\n

You can see the dollar\u2019s loss of about 10% value against other currencies and its persistent downward trend since March 2020 reflected in the dollar index\u00a0chart<\/a>\u00a0below:<\/p>\n

\"dollar<\/p>\n

To get an even better idea of that persistent downward trend, we need to look all the way back to 2002, when the dollar index (DXY<\/a>) peaked around 117. Not only is today\u2019s dollar worth 10% less than last year\u2019s \u2013 it\u2019s 25% weaker than in 2002.<\/p>\n

In fact, one forecast reported on Bloomberg in June 2020 called for a\u00a035% decline<\/strong>\u00a0in value<\/a>\u00a0by the end of 2021, which would leave the dollar index at 65. If that plays out, the index would be reporting its\u00a0lowest value in at least 35 years<\/strong>.<\/p>\n

In addition, a\u00a0new Bloomberg report<\/a>\u00a0gave three reasons why the \u201cdollar is now trading at the lowest level against its peers since 2018\u201d:<\/p>\n

1) Sharp widening in the U.S. current-account [trade] deficit.
\n2) Rise of the euro.
\n3) A Federal Reserve that would do little in response to any weakness in the greenback.<\/p><\/blockquote>\n

There is no doubt the\u00a0trade deficit<\/a>\u00a0is a problem. According to the\u00a0Bureau of Economic Analysis<\/a>, the gap between imports and exports is at its widest since 2006. That won\u2019t help the dollar recover.<\/p>\n

The Fed\u2019s\u00a0inflation policy<\/a> isn\u2019t likely to help the dollar much because it \u201cprinted\u201d itself into a corner with its loose monetary policy. The same Bloomberg piece further clarifies the Fed\u2019s inflation strategy:<\/p>\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n

 <\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The U.S. Dollar Could Be Nearing Its \u201cEnd Game\u201d From foreign countries\u00a0trying\u00a0to dethrone the dollar\u2019s hegemony as global reserve currency, all the way to rising inflation\u00a0weakening\u00a0it\u2026 the U.S. dollar is in trouble. Pundits like Jim Rickards\u00a0said\u00a0(back in 2016): \u201cThe dollar won\u2019t lose its reserve currency status overnight\u201d \u2014 and he was right. But a new […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[18769,124,303,309,426,839,3650,5482],"class_list":["post-56651","post","type-post","status-publish","format-standard","hentry","category-economics","tag-birch-gold-group","tag-central-banks","tag-fed","tag-fiat-currency","tag-inflation","tag-us-dollar","tag-us-federal-reserve","tag-world-reserve-currency"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/56651","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=56651"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/56651\/revisions"}],"predecessor-version":[{"id":56659,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/56651\/revisions\/56659"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=56651"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=56651"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=56651"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}