Monday, July 15, 2013
With all the world's money pouring into the US:
With all the money of the world's richest 1 percent fleeing into the US right now the dollar has been pushed to stratospheric heights equal to - well the most anemic pre crash low of '06.
Yet this is enough to get commentators salivating about the strength of the dollar.
And it is strong - compared to the Euro and the Yen.
With an average 1.6 percent GDP for 2013 - five years into a "recovery" this tremendous strength will come crashing down the moment the US loses about half a percent of GDP and heads back towards ZERO and below.
Half a percent of GDP. That's all the holding the dollar up right now.
And think about this: the PPI came in at .8 percent in June. If you counted that as the GDP deflator - which you well might have done before the government changed the metrics - that half a percent would already be gone.
Then where will the money flow?