Tag Archives: USD

  • Blog
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    Why The U.S. Dollar And Bitcoin Keep Rising

    Understanding utility-driven demand
    by charleshughsmith

    Friday, January 6, 2017, 3:12 PM

    8

    Capital migrates to where it flows with the least resistance, i.e. to forms of capital that are liquid and offer low transaction costs—what I call ease of flow. Capital also migrates to relatively safe havens that are liquid and offer low transaction/holding costs, and to forms of capital with global utility. And it also flows to the highest yield/return with the lowest perceived risk.

    Given these fundamentals, it isn’t difficult to understand why capital is flowing into USD-denominated assets and bitcoin.

    So what do the fundamentals suggest about the valuation uptrends in the USD and bitcoin? Have they topped out and due for a crash, or have they just started their appreciation cycle?

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  • Blog
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    How Much Higher Can The U.S. Dollar Go?

    And what will the implications be?
    by charleshughsmith

    Wednesday, November 25, 2015, 5:11 PM

    0

    Our first observation is that trends in the USD tend to last for some time, so if this rally follows the pattern of previous rallies, it’s unlikely to have run its course in one year.

    Secondly, previous rallies paused for a multi-month consolidation period before launching upward for the second leg of the long-term rally.

    Thirdly, the USD rose sharply to previous peaks and then round-tripped back to the 80 level.

    This raises the question: How high could the dollar rise in this rally?

     

     

     

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  • Insider
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    Why The Coming Currency Crisis Will Push The USD Higher

    Which will crush stocks
    by charleshughsmith

    Wednesday, November 25, 2015, 5:11 PM

    16

    Executive Summary

    • Other currencies are inflating faster than the USD
    • The USD is still backed by a preponderance of the world's assets
    • The potential for a global currency crisis is rising
    • Why USD will be the (initial) safe haven when it arrives

    If you have not yet read Part 1: How Much Higher Can The U.S. Dollar Go?, available free to all readers, please click here to read it first.

    In Part 1, we reviewed the technical evidence in support of a second move higher in a multi-year U.S. dollar rally. Here in Part 2, we ask: What conditions might drive such a move higher?

    To answer this question, let’s start with another question: What’s scarce in the world of foreign exchange (FX)?

    We ask this because capital, profits and gains flow to what’s scarce and in demand. This boils down to supply and demand: gains go to whatever is in high demand and scarce, and whatever is not in demand and over-supplied will lose value.

    Supply and Demand

    Like every other commodity, currencies respond to supply and demand: whatever currency is scarce and in demand will rise, while currencies that are in oversupply and not in demand will decline.

    Though many presume the world is awash in dollars as a result of Federal Reserve quantitative easing, the reality is that expansion of USD via bank loans (credit) and Fed money-creation is modest compared to the expansion of other global currencies such as China’s renminbi (RMB), a.k.a. yuan.

    Consider this chart of bank credit expansion in the U.S. and in China since the onset of the “Great Recovery” in early 2009: China’s bank credit has soared by 260%, a sum that is roughly 140% of China’s entire Gross Domestic Product (GDP), while U.S. bank credit rose by a modest 12% of U.S. GDP.

     

    If we compare M2 money supply, we find…

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  • Insider
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    Off the Cuff: Whither the US Dollar?

    A hot debate worthy of your time
    by Adam Taggart

    Thursday, March 28, 2013, 4:50 AM

    19

    In this week's Off the Cuff podcast, Chris and Charles Hugh Smith do something a little different.

    Given the thoughtful and in-depth discussion resulting in our recent article on the future of the dollar's purchasing power, Chris and Charles engage in a fundamentals-based debate on the outlook for the U.S. dollar over the next decade.

    This is one of those instances in which Charles, a valued contributing editor to Peak Prosperity, sees the future differently than Chris…

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  • Blog

    Daily Digest 5/1 – Be Careful Wishing For The Fed’s End, Qaddafi Calls For Cease-Fire Talks, Deflation Or Hyperinflation?

    by DailyDigest

    Sunday, May 1, 2011, 2:49 PM

    0
    • TIC – China’s Decreasing its Holdings 
    • Be Careful Wishing for the Fed’s End
    • Treasury and Fed Put Out Cash, Raising Fist Pumping Crowd for Ben
    • Doug Casey: Precious Metals Vs. The USD
    • Deflation or Hyperinflation?
    • Qaddafi Calls for Cease-Fire Talks
    • China’s Manufacturing Grows at Slower Pace, Survey Shows
    • TEPCO’s Updated Radiation Map

    Crash Course DVDOwn the Crash Course Special Edition Set with Presenter’s Pack (NTSC or PAL)

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