To be honest, iso, I'm only just considering that question... I agree with the poster(s) who attribute some of the US$ strength to being the best of a bad bunch around the world, but I also think it is yet another bubble possibly and if the US$ is in a bubble and pops? My guess is we'd see worse than 2008-2009 and wind up in a serious deflationary spiral -- at best, and it's not good, I could also see the case for runaway inflation, but at the moment the worldwide trend is deflationary just about everywhere not in the US, and certainly dis-inflationary in the US at best, with some deflationary hints in various sub sectors of the US economy.
I could be very wrong (and often am) as I am not an expert on monetary stuff (vs. fiscal), but I just don't see the current situation as being sustainable or the new status quo... rather I think the most benign outcome would be that our self-imposed liquidity trap and aging population/demographics makes Japan (the last 20 years) the closest model to what might become the new status quo for the US with the exception of the obvious differences in the banking systems and the fact that Japan is an almost entirely homogenous society and culture.
So while I've been thinking a lot about stagnating in our liquidity trap stew, I decided this week to begin considering other possible scenarios and the charts of US$ you and others have been posting just struck me as being "bubblicious" in appearance and decided I need to explore the possibilities that might ensue if so.
You know a lot more about the above than I -- I just know how to ask obvious/dumb questions to myself and see if I can figure things out... and I think I know what your opinions/thoughts might be on some of the above, but maybe not...
It might be a good discussion starting point (if you feel like it, have the time and don't mind) if you posted a very brief bullet list/summary of what you consider possible/probable outcomes for 1-yr., 3-5 yr. and longer time frames... I know that is asking a lot, so I understand if you don't want to -- or PM me if you think I'm neglecting something obvious, etc. You and I don't always agree on everything, but we often agree on big picture stuff and you always manage to stimulate my own thought processes. In return, all I can promise is that I repay you with some thoughtful discussion, either here on the board, or via PMs.
TIA, Jim |
