E Why Trump Is Taking The Dollar Down And How To Profit From It

It is no surprise. Donald Trump has an ego. . .

Understanding this is crucial. It gives contrarian investors big hints what to expect. 

Look for yourself. It's right there on the White House website

To get the economy back on track, President Trump has outlined a bold plan to create 25 million new American jobs in the next decade and return to 4 percent annual economic growth.

The economy since 2009 has grown at an average of 2.05 percent. And GDP for 2016 was only 1.6 percent.

This was 38% lower than 2015's GDP - which was 2.6 percent.  The downtrend is likely to continue into 2017. . .


For starters, the post-2008 recovery is in its 9th year.To put this in perspective, the average expansion/recovery since the 1980s has been 80 months. That is only 6.7 years. 

So by recent historical standards, the post-2008 recovery has gone on too long. 

Secondly, and most importantly, the Federal Reserve is tightening. . . This has sent the U.S. dollar to multi-year highs. 

The dollar has not been at these levels since 2003. That was 14 years ago. And the stronger the dollar is, the cheaper other currencies are. It is a zero-sum gain. For example, if the dollar is strong, the euro must be weak. 

This is exactly at its most fundamental core what Trump is worked up about: a strong dollar makes Americans buy more foreign goods. This subsidizes foreign businesses at the expense of American ones.

Even top Trump trade advisors have already called out such "unfair" currency weakening of our trading partners. Not just China and Japan - but Germany with the euro

Trump had built a campaign of bold promises, especially for businesses. But to achieve his targeted 4% GDP, he will need more than tax cuts, de-regulation and import tariffs. Corporate tax cuts will invite investment back from tax havens abroad. De-regulations will promote production onshore. And import tariffs will subsidize domestic producers of goods. 

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