This morning’s jobless claims print in the USA was as horrifying as could be expected. Coming in at a new cycle high of 669,000 (see chart), and taking the moving average up to 657,000, this is really bad for the US Dollar – and in a perverse way, fantastic for the US stock market.
Fantastic? Oui oui, Monsieur Sarkozy. If we blow the American balance sheet and economy to socialized smithereens, ze US Dollar will lose its status as the world’s safety reserve currency – and, in turn (in the immediate term) REFLATE, everything that’s priced in bucks. We have been calling this Breaking The Buck.
Does it end well? Of course not – but I get paid to tell you what’s going to happen, not what it’s patriotic to want happen. What’s bad for the buck is great for US exporters who want to crush the French and the German exporters who also want The Client’s (China) orders.
Now that the US Dollar is down hard on the day, THE macro question remains – Will The Buck Stop Here?
Keith R. McCullough
CEO & Chief Investment Officer