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Below is a brief excerpt transcribed from Monday's edition of The Macro Show hosted by Hedgeye CEO Keith McCullough. |
The U.S. Dollar was down another -0.3% against the Euro last week. Take a look at our trend signal. It worked like a charm.
The U.S. Dollar had been bullish trend going all the way back 2Q18 then went bearish trend at the end of May. This bearish trend is inflating commodity prices.
The purchasing power of the people is going down.
So if you get paid in dollars, the cost of what you are buying to feed your family, shelter and healthcare are going up in dollars. At the same time, the U.S. economy is slowing.
That’s called stagflation.
It is very sad and depressing to see the U.S. government do this.
That's not the story for a lot of other governments though. The Norwegian Krone is up 12% in the last 3 months. They’re happy. The Canadians are happy with an almost 5% gain in their currency in the last 3 months while being up 1.1% last week.
Not all people get plugged at the same time. It is the country that is devaluing the currency at its fastest rate that pays the price.
For us free market capitalists we are front-running it, that's why we're long commodities.
But taking a step back, dollar devaluation certainly isn't good for the American economy. Ultimately, the American people pay for the Fed's dollar devaluation.
