RE:USA can not afford a strong dollarNote: when you add war to the equation the deficit explodes and bankrupcy occurs sooner.
BREAKtheCOMEX wrote: Summary: Strong Dollar = Reduced Exports
Reduced Exports = Reduced Jobs
Reduced Exports + Reduced jobs = Reduced Tax base
Reduced Tax Base = Higher deficits
Higher Deficits = Bankrupcy
The US dollar has been supported by fictitious economic data, manipulated stock markets and precious metals. How long can the government support its dollar in the face of other nations swiftly devaluing their currency. They cannot afford to continue down this road of supporting the strength of the US dollar because it hurts their competiveness in the world marketplace. As other nations devalue their currency (printing money) American products become more expensive which will reduce sales of these products causing job loss at home. Reduced exports and the accompanying unemployment reduces tax dollars brought in by the government so debt naturally rises. In a nutshell, the US can not allow its world competiveness to erode much further because it will slowly go bankrupt.
The USA can also not afford a huge stock market crash because this will cause a huge depression and the loss of Trillions of dollars which, ironically, makes the dollar worth more because there are fewer dollars available to spend so asset prices go down (depression) which isn’t all bad except when you have massive debt. This debt must still be repaid, but, because there is less money available, it will take much longer to payoff. The only option at that point is to go bankrupt because the ability to pay off one’s debt is even more remote than before the depressionary stock market crash.
So, the only real option available to governments is to make their debt less expensive (not more expensive which is what a stock market crash would cause). How do you make your debt less expensive? The only way to do that is to devalue your currency just like Japan, Europe, China etc are doing (printing more money).
But the politicians need an event to convince the public that its in their best interest to resume the devaluing of their currency. A depression must be avoided at all costs. What will that be the event which will prompt the USA to ramp up its money printing (QE lV)? Well, of course, it will be the beginning of a stock market collapse. Stopping a crashing market and preventing a depression will be fully supported by the public; making the politicians look good, which is all they really care about and getting re-elected of course. The current government policy is to keep the US dollar strong. But as it strengthens the effects of the stronger dollar will become more and more evident as the real economy suffers . I believe the only viable path for the USA is to devalue their debt through money printing and hyper inflation. As they unwind QE lll, Will they wait for the coming crash or will they initiate it by stopping the manipulation? Either way the current path of a strengthening dollar must be stopped.