CASH MCCALL WARNS US DOLLAR RISE EXTREME DANGER
The Dollar is apparently a spectator sport where the mindless cheer for the home team. The US Dollar is the GLOBAL RESERVE CURRENCY. When speculators trade it up, dollars go into short supply and the dollar rises. Commodities fall and the world currencies gyrate and their exchange rates fall. Because all commodities are traded in US Dollars, when dollars are in short supply, liquidity drops; commodities collapse. This prevents emerging markets from buying commodities and financing those purchases in dollars. Meanwhile, US exports drop to nil and US manufacturing flatlines. That’s just the beginning of the mess. CASH MCCALL WARNS US DOLLAR RISE EXTREME DANGER.
Why is the dollar rising?
It is rising for the worst possible reason. Speculators are buying it because TRUMP is viewed as another GIANT SPENDER akin to Bush II and Obama when they had both houses of congress and no fiscal discipline. This is the biggest reason why Americans prefer gridlock. Though with the RINO Republican Congress, they acted in Concert with Obama spending and escalating the debt. Don’t blame just Obama, Presidents can’t double the debt without congressional help.
Massive Government spending is inflationary.
Government borrow and spending at the Bush and Obama levels feels great until the bill comes due. At present the current debt is 20 Trillion. The Fed under Janet Yellen is lost and determined to raise interest Rates in December and three times more in 2017. Her rationale for this is the phony jobs report which show massive under utilization. Look at the below graph carefully. It explains what Yellen apparently can’t see.
Note that during the Reagan years, employment utilization skyrocketed. This means that while unemployment dropped, massive numbers of Americans were being employed.
Look at the graph at the Obama years. Unemployment is dropping but it is dropping because employment utilization is crashing. Thus there are nearly 100 million Americans working under Reagan and not working under Obama.
Janet Yellen clearly has a defective understanding of the unemployment picture.
Further the GDP has been crawling most of the Obama tenure at just over 1% the worst recovery in history. The FED has deployed every QE trick in the book to bolster the illusion of real economic activity. Just recently the GDP has move in this quarter to 3.2% almost entirely from consumer spending and consumer borrowing. Manufacturing on the other hand has dropped due to the dot com nose bleed dollar to just 16% of the US Economy. The worse in History. During the Reagan presidency manufacturing was 40% of the economy. NAFTA has taken a huge toll on US Business but an equal burden is that of massive Government regulation. A simple but illustrative example is that a child may no longer start in the world of commerce with something as innocuous as a Lemonade Stand.
Local Governments have fined Parents in some cases in excess of $1000 claiming the American Institution is a heath hazard. Though to be sure not a single case of Lemonade poisoning has ever been registered.
Big Spender Trump has control of both houses:
Speculators are buying the dollar because they think Trump will be a runaway spender and Janet Yellen will raise interest rates and slow the economy and make the dollar rise even higher. The RISK here is global recession.
And for all the Clinton Bush fans, the employment utilization chart shows that overall they presided over flat to down labor utilization essentially stagnating the economy not growing it. Clearly it was Reagan that did the heavy lifting. Obama’s economy collapsed. Why is this number important? There can be NO recovery without a massive increase in employment utilization. The metric of wage inflation become artificial when the labor market remains untapped. Secondarily, wages have rising so slowly it is still at a 16 year low.
In October 2016, the Chinese Yuan became a global Reserve Currency:
Ultimately the risk here is that the Yuan can effectively compete with the nose bleed dot com dollar and save traders that sell commodities to China roughly 13% on the transaction. It can move vast quantities of commodities out of the influence of the Dollar Reserve. More simply with a nosebleed dollar the Yuan could become the goto Reserve Currency. Many Economists agree but say that the process will take years. However, in this instance I am talking about Iron ore. China is the larges buyer of Iron ore and Australia the largest producer trades their ore to China in the Yuan. Russia trades oil in the Yuan. This saves Australia roughly 13% on each transaction from the Dollar.
Huge instability exists across the globe. MODI’s currency bomb.
India under Modi has dropped their available cash float by nearly 86% by calling in 500 and 1000 Rupee notes. These bills represent roughly 86% of the cash economy in India. Modi is requiring these bill be collected and issuing a new 2000 Rupee Bills worth roughly $30 US. He is trying to break the cash economy which is the focus of corruption and tax evasion in India. At present the system has produced chaotic results and the Indian economy is rapidly falling. Modernization takes time. People in India still buy large ticket items with cash such as vehicles, aircraft and real estate.
Though the exchange looks benign. Modi says the old bills will be deemed worthless in fifty days. He is attempting to smoke out the black market and Cash market in India which dodges more than $100 billion a year in Taxes.
THE USA is following JAPAN into the abyss;
Japan and the USA are the largest debtor nations on earth. To finance that debt they must write Bonds and auction that debt to the public and other governments. As long as the dollar is a reserve currency this debt acts as a hedge against fluctuation of the dollar. However if the reserve currency status becomes unhinged as it is with the Japanese Yen, then recession becomes permanent and growth becomes impossible, often called Stagflation.
Bond values rise as the interest rates drop, the opposite is also true. This creates what looks like a bond bubble. But don’t short that bubble. Shorting Bonds is referred to as the Japanese Suicide Trade. If the globe goes into recession which is likely, currency speculators buy US Bonds and the Dollar. This is an illusion that the US Currency represents stability.
The Carry Trade: Watch out below!
Unless your head is buried in the sand, note that in just three weeks since the Trump election, the Yen has dropped 12%! Ten Trillion US dollars at near zero interest has now gone into the largest debt carry Trade in history. As the dollar rises those with the invested US Dollars are watching their home currency fall. This is good for Japan and China exports but very bad for US exports.
What is the carry trade?
CARRY TRADE is the borrowing of a currency at low interest in one country and then converting that currency to another currency in a higher interest rate country. So we borrow YEN at near zero interest and convert to US DOLLARS that pay higher interest, higher than Europe which seems peculiar. I will discuss this in a moment. So far this exchange is pretty neutral. This is what a Japanese traveler might do who is traveling to the USA. Though currency speculators like SOROS do this all the time and they aren’t traveling. This is just the first step.
Once the YEN have been converted to Dollars, the Dollars are invested in the highest interest rated Japanese Bonds. Because Government Bonds are a very stable investment, one can purchase lots of bonds for very little money down if they have credit. This is the same with futures or buying stocks on margin.
Large traders can leverage 100:1 AND MORE, bonds to dollars.
This is why Japan and China are so eager to buy US Debt in the form of US Treasury Bonds. Since big traders borrow YEN at nearly zero interest, by the time they convert into US Dollar and buy US Treasury Notes, that hypothetically pay 2%. Thus, this is called a “positive carry” trade because the Bonds pay more interest than the cost of borrowing the YEN.
Buying large volumes of US Treasury notes causes Bond prices to rise and at the same time bond interest rates to fall. That creates a US Treasury Bond Bubble as we have now.
As long at the YEN doesn’t rise, Traders cleanup. They make profits on the rise of the US Bonds driven by Trader demand. Additionally they make big profits when the Dollar Rises to the nosebleed levels of today. For every one million dollars of YEN converted in this Positive Carry Trade, they can make $2 million for each 1% the dollar rises in relationship to the YEN! We are talking about 14% since Trump was elected!
Additionally traders also make money when the US Treasury Bonds rise in price while the interest rate falls. Finally as long as the Treasury note pays more than the cost to borrow the YEN, traders also make money on the Positive Carry.
That is how a simply trade can rain down money on traders. But at the same time look what happens to the United States. The Dollar goes sky high. Liquidity of the dollar drops. Exports cease. Commodity markets globally crumble. Massive currency devaluation occur across the emerging markets.
WHAT HAPPENS WHEN THIS TRADE UNWINDS WHEN THE TRADERS CASH IN!
Well do the math for yourself. If the CARRY TRADE against the US Dollar is at 10 Trillion dollars globally. Imagine the possible elevator drop in the US Bond Markets, the US Dollar, and the calamity to traders that get suddenly reversed.
Why not short the US Treasury Bond Markets?
That’s a trade but it could be the Japanese Suicide trade. First off Janet Yellen a veritable idiot wants to raise interest rates. This only stimulates more Carry Trade and increases the risk of a final big meltdown. Initially it will cause the dollar to rise further, the bond prices to rise, and commodities including gold to collapse. It is all very anti-intuitive and dangerous beyond comprehension.
With a nosebleed dot com dollar American exports will cease.
Meanwhile Mexico through NAFTA will see exports soar. This is exactly the opposite of what TRUMP is promising. How is Carrier in Indiana going to export any of its goods from the USA? It isn’t. Carrier would have been better off moving to Mexico. And just for your edification Mr. Trump, Carrier is still setting up manufacturing in Mexico even if they keep the US facility for another year.
It is pure economic reality.
The Dot com nosebleed dollar, STOPS US EXPORTS. US products cannot compete. They are simply too expensive. Materials are 40% of the price of a car and labor is 30% of the price of a car.
The Government steals from you if you are a saver:
Consider the true buying power of the dollar since 1913 when the FED took over controlling the Dollar’s distribution and value. A US Dollar in 1913 has the buying power of just 5 Cents in 2016. Thus if your great grandfather stuffed $1000 dollars in a mattress in 1913, by 2016 the buying power would have been reduced to $50. Savers get killed by the Fed.
On the other hand if you are a debtor, you benefit by paying back very cheap dollars in the future. This is why you don’t see fixed interest loans these days. Banks aren’t stupid, you are.
Tinkering with interest Rates is by far and away the dumbest Federal Reserve Idea in history.
It is akin to price fixing or interest rate fixing. This has never worked. The Feds only proper job in the entire world is to assure there is adequate dollar liquidity. A computer program could do this far more efficiently than the dummy’s that sit on the FED. A mere 3% drop in liquidity CAUSED THE GREAT DEPRESSION in the 1930’s. Tinkering with interest rates only slows private sector borrowing. That kills business expansion. It kills exports. It is astonishing that these very simple principles are so misunderstood by the Federal Reserve Board members.
Even my own brother out of frustration said to me but but but you have to start someplace correcting the interest rate fixing of the past. Sounds logical but you don’t fix price fixing by more price fixing. That is like Obama saying the cure for Obama burnout is more Obama. To the contrary the cure to Obama Burnout is get rid of Obama. Get RID of the interest RATE FIXING!
Further the FED has determined and this is insane, that 3% is a healthy target for inflation. More simply after ten years of savings the Government would steal 33% of your buying power. Or after 30 years they would steal 99% of your buying power. NICE RETIREMENT SAVINGS YOU HAVE THERE!
Nothing could be more insane than teaching that government theft using currency is legitimate. Its a confidence game! They should go to jail for this however, the US Congress has exempted the FED from jail for something that is considered a felony crime if you did it!
If anyone thinks that there is something called a benign interest rate hike, you need your head examined!
Markets will drop markedly. Housing will collapse. Wholesale inventories will rise. The Consumer will shut down. US exports will go to nil. Layoffs will ensue, unemployment will rise. The Government spending will skyrocket in these enormous wasteful infrastructure projects that Trump wants.
Infrastructure is not brick and mortar public projects. Japan has already proven that public projects of this type kill the economy. JAPAN HAS GREAT ROADS, GREAT AIRPORTS and GREAT BRIDGES. Where’s their economy? In the dumpster. Laughably Trump continues to remind everyone that he went to Wharton and is “really really smart.” Yet he has an infantile understanding of money and currencies. Yet he continues to hold fast to this Rooselveltian public project insanity.
Trump knows very very little about the economy outside of New York Commercial real estate which is a quasi monopoly.
This is why TRUMP will tap GOLDMAN SACHS and continue heading into the Japanese Abyss. What is Good for Goldman is distinctly bad for America and small business. Presidents may come and go but Goldman always has their finger on the controls of the US Treasury. I assure you that Goldman partners will know more in advance about what happens to your dollars then you will ever know.
Henry Paulson Bush’s Goldman Treasurer brought the TARP bailout to the banks. 9 Trillion was lost by homeowners who were raked over the coals by the banks. The US economy collapsed. The government funded those banks. In the end the banks took all those real estate assets in foreclosure; American homeowners were wiped out. Even today the bank real estate inventory glut persists.
Trump’s infrastructure are low yield projects:
Trump wants to build road, bridges and airports. That might help the Trump Kids’ businesses but Japan has proven that such projects don’t grow the private sector economy.
I have suggested gigibit internet and 10 Gigibit internet and wireless fiber. Also I have suggested the Library of congress be digitized and pushed out into the hands of the people. Just today ALTICE USA announced they would be converting all their cablevision homes to 10 GIGIBIT. BY the time TRUMP gets around to thinking about it, some parts of the country will already have it.
Additionally, I have suggested a revamping of the US national labs to embark on a program of RNAi to tackle the Cancer Genome and lethal genes. Cancer is a costly disease and it must be eliminated. No healthcare system can afford to treat it so it must be cured. Stopping cancer metastasis alone would cure 90% of all lethal cancers. What does micromanagement Trump know about this? Nothing. These kinds of high tech brain intensive enterprise help all business not just the TRUMP KID’s tourism businesses.
It is impossible to imagine with the TRUMP YES KIDS that anything gets done AT the TRUMP ORGANIZATION THAT isn’t micromanaged and dominated by Donald J. Trump himself. Even the picking of a cabinet looks more like the Apprentice TV Show each day. Applicants come and kiss the RING. The only thing missing is the TV Cameras and the behind the scenes chit chat.
But once again, TRUMP is extremely low tech and he is a micromanager so anything complex is far out of his range.
You can dispute what I say… but just as my brother, you would sadly be wrong. Great invention doesn’t come from Government OR THE TRUMP KIDS! So I ask the following question: With all the resources of the TRUMP KIDS have any of them ever invented anything like the following?
Government needs to shut this guy down fast. You have a license to fly that thing? Where are your yellow warning labels?
This kid is 18. Oddly he is not one of the fabulous TRUMP KIDS. No, he’s actually intelligent. On his own, he studied drones then made his own. Of course it flies faster and under more stable control than any of the Trillion Dollar military drones. But the kid had an unfair advantage; he didn’t have some alcoholic senior engineer crushing each and every exciting new innovation. Government needs to clamp down otherwise drones will be everywhere even delivering your lunch from MacDonalds. How does the Trump Infrastructure plan of new roads, new Airport, and bridges fit into the future of drones? It doesn’t. BTW, ALL the motors used in recreational drones are made in China. It is actually easier and cheaper to spec and buy electric motors from China than any US Manufacturer.
This one is almost heartbreaking to me: A 15 year old kid comes up with an early detection of pancreatic cancer.
I am going to go ballistic on this one. If you are a sensitive snowflake you better run now to the safe room and be useless to yourself and everyone else.
This is Jack Andraka. He was 15 years of age when he devised this idea and created it. The government has spent literally trillions and trillions of dollars on medical research which has never produced a single cure for any disease. In pancreatic cancer, these wasted trillions have made exactly zero progress in early pancreatic cancer detection.
Pancreatic Cancer is a killer once it metastasizes.
Only 2% of people with Pancreatic Cancer survive five years. Yet this cancer lives in your pancreas for up to ten years before it metastasasises. Doctor only order tests when a patient turns yellow and has symptoms which is too late.
Jack Andraka is not a fabulous TRUMP KID. He converted his own personal sadness from the loss of a close friend into something useful. How did he do this? Better Bridges, Highways, and Airports? No. He gathered up information on the Internet about 8000 proteins or peptides which show up in pancreatic cancer and other cancers.
After studying four thousand proteins he found Mesothelin present in the blood stream of all patients with pancreatic cancer. He then went on to deploy nanotubes and antibodies. The rest is history, his history.
Suddenly I am so hungry I could eat a zoo…
Meanwhile the Fabulous TRUMP KIDS spend their intellectual time and vast wealth as big game hunters on safari killing endangered species.
Funny thing is that these TRUMP KIDS will attract more women than shy young Jack every will! How about that for a paradox? The airport, roads and bridges to that game preserve were really really bad. TRUMP SAFARI’s needs to get hunters in and out of the game preserves faster so patrons can stop by for lunch and kill and elephant on the way home.
Then again say good-bye to a few famous folks that died of Pancreatic Cancer:
Interestingly enough there are at least four billionaires on that dead list who dedicated ZERO money to ending metastatic cancer. Government research is at present, steered in the wrong direction as they have been since the 1970s. They are just dumb bureaucrats. Thus there has been essentially no progress against metastatic cancer since Nixon declared his war on cancer in 1971. Money indiscriminately thrown in any direction by Government yields nothing but corruption.
Meanwhile, Trump will try to squeeze the pharmaceutical companies in the same way that Clinton was attempting to destroy them. Shortsighted stupid people get enormous amounts of power but have microscopic brains. Going after pharmaceutical companies and stem cell research hurt biotech and damages progress on metastatic cancer. As the new TRUMP Administration morph into a George Bush Third Term, kids like Jack will never have the intellectual resources they need; Jack will have to learn to speak Chinese.
BUSH was an idiot:
The Stupidity and ignorance of George Bush cannot be understated. He stalled stem cell research forcing it to go offshore. Metastatic cancer comes directly from CANCER STEM CELLS!
Bush wanted young people like Jack to be spied on, to be watched closely; never know what smart kids are up to. He did not want scientific data of any kind widely distributed on the internet or electronically. He wanted to limits its access.
George Bush wanted common core. He didn’t want genius to navigate out of the confines of regurgitation education of the type Jack was getting in public schools. He believed that when it comes to education one size fits all. That’s what an idiot believes.
The fact of the matter is that not all people are created equally.
Some are vastly more intelligent than others, Like JACK and the Fabulous TRUMP KIDS [gag] and there is no reason to invent a stifling world of the dark ages to keep the masses safe from genius or to keep TRUMP KID types in control. I have ZERO INTELLECTUAL RESPECT for any and all members of the BUSH family!
Pancreatic Cancer may be caused by a subclinincal infection:
I have a few more observations in regard to Pancreateic Cancer. I think it may be caused by viral infections such as mumps, coxsackie B [which causes Juvenile Diabetes] and bacteria such as mycoplasma pneumonia, and campylobacter. High levels of Camplyobacter bacteria in the mouth has been associated with Pancreatic Cancer and my be used for early detection. Jack has pushed scientist into a new way of thinking.
Kim Weiskopf was an American television writer and producer, whose credits included One Day at a Time. He died of Pancreatic Cancer as did the Show’s Star Bonnie Franklin. That is a statistical mathematical conundrum.
Jimmy Carter’s brother died of Pancreatic Cancer but so did his sister, Ruth Carter Stapleton. A knee jerk reaction may say… ah its genetic. A more intelligent statement may be it is infectious perhaps caused by ergots and Aflatoxin B1. Instead American Cancer Research tries to pin the blame on personal habits such as Smoking the ultimate Government Boogeyman or drinking. They are so busy trying to prove their assumptions that they never land on the causative result. In the case of Jack, they were outclassed by a 15 year old kid with internet access.
In some ways having an idiot government is good for the rest of the world.
Stifling thinking in the USA has stirred thinking overseas. China is actually ahead in some areas of biotechnology. Click here for our CHINESE BIOTECH SPUTNIK STORY. If you want to clone your pet you can go to Korea. If you want CRISPR gene therapy go to CHINA. Send your airfare bills to the BUSH FAMILY. We are falling behind in biotechnology because BUSH and OBAMA were morons.
This is going to be ruinous.
It is projected that almost 1/3 of Americans will suffer the ravages of Alzheimer’s Disease. There is growing evidence that this may also be a result of a subclinical infection just as Ulcers are now attributed to a bacteria helicobacter pylori. This ulcer causation was discovered and know for 16 years in Australia before American Medicine would even look at the research! Fro 16 years surgeons in the USA were cutting out ulcers and triggering pernicious anemia in patients that should have been treated with simple antibiotics. WE ARE FALLING BEHIND! Nothing that more ROADS, BRIDGES and AIRPORTS can’t fix!
Welcome to your Bush Third Term under the micromanagement of Donald J. Trump and the FABULOUS TRUMP KIDS.
Fasten your Seat belts, the US Economy and Markets are in for a massive correction and likely global recession. This will impinge on all Research and Development activities in America. But you can sit by the sidelines in the bleachers stupidly cheering the RISE OF THE US Reserve DOLLAR as if you are at the Football game and trouncing your crosstown rivals… when you are really trouncing yourselves.