I still don’t think that the groupthink crowd agrees with me on this, but the reality is that if the USA wants to compete for China’s business, she is going to have to do it from a lower adjusted currency rate. Without it, the USA is hostage to her domestic growth in horse and buggy whip industries like financial services – this country has a very hard time growing in these sectors on an UNLEVERED basis.
Unlevered growth is best found from earning Brazilian and Chinese orders. In this organic growth environment, liquidity is king. Leverage is our disease. The only way to improve the American patient’s health is to de-value and “re-flate”.
My line in the sand on the US Dollar index is now $84.51. After Geithner is done with his speech, he should go back to his office and focus on breaking that line in the buck. I’d appreciate it if someone would send him and his new boss, President Obama, this note.
Keith R. McCullough
CEO & Chief Investment Officer