Being Specific About Dollar Specifics

Even with vaccine-aphoria and the general sense of huge government interventions, outside of maybe domestic commentary there’s much more caution still available across the entire global spectrum: first, about how bad things have been; and second, how hard it has been to come back from the trough (currency as well as economy). The inherent risks in such a situation would easily explain a persistent dollar shortfall (if you don’t like the specific implications of the word “shortage” given the dollar’s exchange direction).

The dollar is still coming back down, but it is not falling (according to my view) and it is nowhere near crashing. That in itself is cause for at least questioning why it’s not moving faster in a more widespread fashion. What is it that must be missing when you look beyond EUR.

A downward direction can mean different things. There’s a world of difference between a crashing dollar, a falling reflationary dollar, and what this is. After nearly ten months, much of the world has utterly struggled just to get back to even with March (which directly contradicts the idea how this slow move might be nothing more than the first stage of a larger, accelerating crash, either). And that does little or nothing of then digging out from the huge hole the dollar had the world, and these currencies, already in before COVID.

Maybe a vaccine can erase COVID from the exchange values – though it hasn’t fully yet – but, in the grand scheme of things, there’s more specific issues beyond those. The overall dollar direction is down, but that doesn’t represent a meaningful change in condition. Grinding slowly better from the worst dollar crisis in a dozen years doesn’t quite have the same inflationary, money printing ring to it, though, does it?

In other words, it’s not the dollar’s direction which should most intrigue you; rather, it’s the “slowly” part which stands out in a pretty obvious, where-is-all-this-money-printing kind of way. That’s the kind of specificity which is required.

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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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