Dont Go Against the Dollar
We have been banging this drum loudly in these pages "Do not go against the dollar" and "Worry about China, Fogettaboutit" and the chickens are coming home to roost.
All other currencies and economies are contrivances, confidence games and confetti. At $13 Trillion GDP and counting, we are the 800 pound gorilla on the block and will continue to be so in the future.
Media coverage of emerging economies such as China and India is over wrought and blown out of proportion to evoke protectionist sentiment and economic fear.
To compare these small economies to ours is like comparing ticks to the elephant whose back they sit on and depend upon for their very existence.
From MSN: A funny thing happened to all those dollar bears, their positions have been smoked.
Buffet, who reportedly lifted his bet against the buck to a position of $22 billion and counting in the first quarter this year has had his head handed to him by more experienced currency players.
Due to improved tax collection, higher payroll earnings, a modest decline in overall government spending and better-than-expected corporate earnings, estimates of the U.S. budget deficit are steadily on the decline.
The 12-month federal deficit has narrowed to $339 billion, or 2.8% of GDP, according to Ned Davis Research. Receipts have been growing twice as fast as spending over the past 12 months, as both corporate and individual tax contributions have been stronger than estimated.
Europe and Asia continue to falter. As ISI analysts pointed out, the past week’s news brought word of weaker French industrial production; diminished European corporate finance executives’ confidence; the worst Australian business expectations in 14 years; a setback in Swedish industrial production; and weaker retail sales, home prices and consumer confidence in the United Kingdom.
There are also new reports of a cool-down in Chinese imports, exports, home construction, manufacturing growth and leading economic indicators. Foreign-currency bears point to a 26% decline in scrap-metal prices last week and another 10% plunge in the Baltic Freight Index, which measures demand for ocean shipping.
According to Bloomberg data, holdings of U.S. government debt by international investors and central banks rose by $93.2 billion, or nearly 5%, to $1.9 trillion last quarter.
The benchmark 10-year Treasury bond now yields about 90 basis points more than its German equivalent. The average of the spread between the two over the past decade has been 14 basis points, or 0.14 percentage points. 10 months ago there was no difference in yield at all.
All other currencies and economies are contrivances, confidence games and confetti. At $13 Trillion GDP and counting, we are the 800 pound gorilla on the block and will continue to be so in the future.
Media coverage of emerging economies such as China and India is over wrought and blown out of proportion to evoke protectionist sentiment and economic fear.
To compare these small economies to ours is like comparing ticks to the elephant whose back they sit on and depend upon for their very existence.
From MSN: A funny thing happened to all those dollar bears, their positions have been smoked.
Buffet, who reportedly lifted his bet against the buck to a position of $22 billion and counting in the first quarter this year has had his head handed to him by more experienced currency players.
Due to improved tax collection, higher payroll earnings, a modest decline in overall government spending and better-than-expected corporate earnings, estimates of the U.S. budget deficit are steadily on the decline.
The 12-month federal deficit has narrowed to $339 billion, or 2.8% of GDP, according to Ned Davis Research. Receipts have been growing twice as fast as spending over the past 12 months, as both corporate and individual tax contributions have been stronger than estimated.
Europe and Asia continue to falter. As ISI analysts pointed out, the past week’s news brought word of weaker French industrial production; diminished European corporate finance executives’ confidence; the worst Australian business expectations in 14 years; a setback in Swedish industrial production; and weaker retail sales, home prices and consumer confidence in the United Kingdom.
There are also new reports of a cool-down in Chinese imports, exports, home construction, manufacturing growth and leading economic indicators. Foreign-currency bears point to a 26% decline in scrap-metal prices last week and another 10% plunge in the Baltic Freight Index, which measures demand for ocean shipping.
According to Bloomberg data, holdings of U.S. government debt by international investors and central banks rose by $93.2 billion, or nearly 5%, to $1.9 trillion last quarter.
The benchmark 10-year Treasury bond now yields about 90 basis points more than its German equivalent. The average of the spread between the two over the past decade has been 14 basis points, or 0.14 percentage points. 10 months ago there was no difference in yield at all.
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