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While I was presenting my Burning The Buck thesis in Winston-Salem, NC yesterday, at one point I submitted that that one reason why US Dollar goes down every day is that there are some dudes in China hitting a sell button.

While the name “dude” isn’t as prevalent in North Carolina, there appears to be a whole lot of international dudes who want nothing to do with American assets anymore. This morning’s TIC (Treasury Capital Inflows) report was another disaster. Look at that big red arrow in the chart Andrew Barber and I have outlined below. By Research Edge’s definition, that would be a nasty long term TAIL.

The TIC Flows report for July registered another loss of -$98B. That was an acceleration to the downside versus the -$57B reported in June (see the 2nd chart below). I know a BILLION US Dollars isn’t what it used to be. Heck, that US Dollar Index is making another new YTD low again today. Who cares anymore, right? The US Government being willfully blind to this is starting to remind me of some dudes who used to work at Lehman in 2007.

Obviously, this chart and that of the US Dollar are not ones that our current Secretary of Squirrel Hunting at the US Treasury is too concerned about. Or is he? Would a man who looks as trustworthy as Timmy Geithner ever hide anything from the American people (other than paying his taxes)?

Look on the bright side – at least the Bankers, Debtors, and Politicians are getting paid.

KM

Keith R. McCullough
Chief Executive Officer

Burning The Buck: Chart of The Day - a1

Burning The Buck: Chart of The Day - a2