US Dollar

US Dollar to Come Under Pressure

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The United States has the least balanced maturity schedule of any major nation. Over 70 percent of its bonds mature within 5 years, compared with an average 49 percent for the 34 member countries in the OECD. The U.S. Treasury has succeeded in extending the average maturity of its debt to 62 months, out from less than 50 months in 2009. That process needs to continue. One sign that investors are more nervous about longer-dated bonds is that the yield gap between 10-year notes and 30-year bonds, currently the longest U.S. maturity, is trading at 137 basis points. This gap … Read more

Chart of the Day: Will the US Dollar Finally Break Its Long-Term Downtrend?

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May has been a great month for the US Dollar, rallying nicely off of its lows.  Lets take a look at the US Dollar Index over the past year….recently breaking the short-term downtrend channel, and days away from breaking its long-term downtrend channel…Will it rally and break through or find strong resistance and come back off? Will the US Dollar Index break through its downtrend channel? Yes No Free polls from Pollhost.com Source: Bespoke Investment Group

Is it time for the US to disengage the world from the dollar?

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The week before last on Thursday the Financial Times published an OpEd piece I wrote arguing that Washington should take the lead in getting the world to abandon the dollar as the dominant reserve currency.  My basic argument is that every twenty to thirty years – whenever, it seems, that American current account deficits surge – we hear dire warnings in the US and abroad about the end of the dollar’s dominance as the world’s reserve currency.  Needless to say in the last few years these warnings have intensified to an almost feverish pitch.  In fact I discuss one such warning, by … Read more

US Dollar-Apropos of Everything

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“In May 2007 we wrote a lengthy piece called The Value of the Dollar in which we argued the following: Consistently excessive money and credit growth has taken the US economy past the point of no return. What (policy makers) have done consistently – and will continue to do – is inflate the money supply and promote more credit, thereby sustaining asset prices at the expense of the purchasing power of the US dollar. We argue the US dollar will ultimatily lose it’s status as the world’s reserve currency. In fact, we believe events currently unfolding may be foreshadowing the … Read more