Friday’s 4.1% GDP growth rate announcement was an encouraging sign for President Trump’s #MAGA agenda, as are the first signs of real wage growth in over a decade. But the core problems of massive debt at all levels of government, plus the unfunded liabilities of bloated American military and ‘health care’ spending remain. Private borrowing — particularly in the overheated Anglosphere housing markets from London to Vancouver — is also unsustainable (including the stupid headlines about how Millennials should throw fewer bachelor parties if they want to save for a house and inexplicably sluggish sales amidst 2007-08 exceeding prices for homes). Commercial real estate from failing North American shopping malls represent the first canaries dropping in the coal mine before a worse crash than the 2008 collapse — though President Trump is buying Americans critical time.
Emerging market crises, while beneficial to the dollar in the short run, remain corrosive to the greenback’s dominance over the long haul, as countries like Turkey and Argentina seek to escape the boom-bust dollar loans cycle. Another factor undermining King Dollar is of course, the failing U.S./EU sanctions imposed on Eurasian energy giant Russia as part of Cold War II, which have spurred Moscow to make oil transactions outside of the SWIFT payments structure and in rubles, yuan or local currencies. Mindful of the foreign debt and liquidity traps Latin Americans (including the Brazilians) have repeatedly fallen into through the 20th and 21st centuries, Russian President Vladimir Putin spoke on the topic of inevitable de-dollarization at this year’s BRICS Summit in Johannesburg. — JWSRead More