The Eurodollar’s Nose

There weren’t nearly the same obvious issues in January 2021 like there had been four September's ago. On the contrary, after early January it seemed as if for the first time in forever all the good things had been lined up just perfectly for the world to finally right itself. Vaccines, stimulus, you remember all the unchallenged positives.

Funny thing, though, just like September 2017 the dollar curiously stopped “crashing.” Defying all the certitude with which this latest dollar downtrend had been called its demise, seemingly out of nowhere it stopped right in its tracks.

T-bills began acting funny, too. And then, of course, Fedwire late in February. Warnings. Escalating.

Even more interesting, the dollar’s exchange value then performed the same five-month up and down – only to turn right around as if on cue, guided by some hidden, shadowy force unlike and wholly unrelated to all the “money printing” and whatnot:

This isn’t magic nor do I think it random coincidence; fractals is more like it and likely. Either way, also escalating warnings which in 2021’s case include falling yields globally (while bunds reversed coincident timing back then, at least UST’s continued upward before ultimately peaking later on in 2018)

How’s the economy this far in 2021? As questionable if not more so than it had been early in 2018 – if you’re being honest. Same mainstream inflation expectations regardless (no surprise).

Someone once said history repeats because no one was listening to it the first time. No kidding. To this day, all anyone really remembers of that last time was something about a boom. Maybe trade wars. The constant drumbeat of LABOR SHORTAGE!!!! Definitely Jay Powell’s hawkishness.

What might people remember about what’s going on now? Serious economic boom. Supply constraints. The continuous outpouring of LABOR SHORTAGE!!!! Jay Powell and his hawkish taper.

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Disclosure: This material has been distributed for informational purposes only. It is the opinion of the author and should not be considered as investment advice or a recommendation of any ...

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