ajtj's Post-Lobotomy Market Charts and Thoughts Message Board

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Strategies & Market Trends : ajtj's Post-Lobotomy Market Charts and Thoughts

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Lee Lichterman III

To: Lee Lichterman III who wrote (73159)	10/29/2022 12:50:39 PM
From: Real Man	1 Recommendation of 98007

The dollar strength is due to rates. We only see how much central banks hold, but private citizen and foreign companies hold dollars too. They choose USD accounts because US never defaulted, and the rates are much higher. It is the private currency flows that push the dollar higher. CBs are forced to sell reserves to defend weakening currency. Strength generates more strength, and USD pays a lot more than other G7 currencies. Some of that is interest rates swaps. Banks can fund US loans in foreign low interest currency,add a swap to hedge, and pay back in depreciated currency. A win unless the system blows up.

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