A Global Eurodollar Shortage

The World Bank just released a telling report entitled "Trade Developments in 2016: Policy Uncertainty Weighs on World Trade". Though they deflect the problems in global trade to areas such as excessive regulatory initiatives and policy uncertainty (which is true), what is to be found buried in the appendix are the two un-annotated charts below. I suspect the World Bank didn't compare them directly (they are shown separately) because it would cast a spotlight on an even larger political 'football'.

How does global trade ship ~10% more trade volume but receive ~12% less revenue over a 5 year period? The answer has traditionally been significant improvements in productivity. However, the productivity numbers by country don't even come close to supporting such a premise.

We believe the actual answer is that a strong US dollar is choking global profits and wealth creation because of a dollar shortage and a lack of real global economic growth! It went "critical" when 'TAPER' ended. You can see this inflection point in an endless array of economic charts.

US DOLLAR SHORTAGE HAS CREATED US DOLLAR DEMAND AND EXCHANGE INCREASES

The Bank of International Settlement (BIS) believes the concerns with the US Dollar are now such that it has replaced the VIX as a "Fear Gauge" for global banks. This development has occurred since QE3 and "TAPER" came to an end in December 2014. At that time the dollar exploded higher, commodities fell, global trade stalled and emerging markets with ~ 9 Trillion in US dollar denominated debt became saddled with higher debt financing charts on falling revenues.

SINCE “TAPER” ENDED WE HAVE AN ALREADY AGGRAVATED GLOBAL DOLLAR SHORTAGE

The US dollar as the Global Reserve Currency absolutely still dominates world trade payments & settlements. Additionally, the fact that because of the Petrodollar agreement with Saudi Arabia, oil can only be transacted in US dollars, this has assured the required for US dollars around the world in what is termed "Eurodollars".

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Disclosure: Information herein was obtained from sources which Mr. Long believes reliable, but he does not guarantee its accuracy. None of the information, ...

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