It won’t happen tomorrow but slowly but surely the world is moving from dollars. The petrodollar system which has been key to the world economy over the last 40 years is eroding. More and more country to country deals are being done in currencies other than the dollar. The economic world as we have known it, after Bretton Woods in the Cold War Era, the post Cold War era, and the post 9-11 era is fundamentally shifting. The dollar is not what it once was. It is no longer “almighty” and one should be prepared.
We’ve written about this before. Government data, especially around inflation and employment is a joke, to be kind.
We hear over and over that inflation is in check, and if anything that we need more inflation. We are told that the CPI is bumping along at between 1-2%. That it’s been at about this rate for years. But you tell me. Is this reflective of your experience?
Argentina used to be such a gem. In the early 1900s it was considerably wealthier than the United States. People from around the world wanted to live in la Argentina. It, like the United States was a land of opportunity.
Is the president really this ignorant of business and economics?
“For those that underestimate me, I say I’m a socialist and I know what I’m doing,”
(Don’t all socialists think that?)
Wouldn’t that be a good way to jump start the economy?
To paraphrase David Stockman – The world’s central banks have not suspended the market mechanism. They can kick the can, they can lie, they can move assets around on balance sheets, they can even call debts assets. But in the end there is no free lunch.
Janet Yellen, Ben Bernanke’s successor as Fed chairman, has asked and answered two important questions:
“Will capitalist economies operate at full employment in the absence of routine intervention? Certainly not.”
“Do policy makers have the knowledge and ability to improve macroeconomic outcomes rather than make things worse? Yes.”
The future of the US economy will largely depend on whether she is right about this. Unfortunately there is little or no evidence to support either of her two assertions.