US Dollar Index

[James]

US stands at 334% debt/gdp, compared with 460% in the 17 economies in the euro-currency zone, and 655% in Japan. If two people had an income of $100,000, and one had debts of $460,000 and the other $334,000, isn't it better to owe $126,000 less which is better for your currency? as it would attract more investors. I personally would rather do business with the second person because he is less likely to go bankrupt. Therefore the US Dollar Index is definitely going above 100, but not sure where it will peak out either 105, 110, 115, or 120. The thing is you can have more debt and an appreciating currency if the central bank is not printing as much. I think that's the case for Germany in control over the Eurozone so there is a top in the Dollar just not yet.

[Choir Loft]

US stands at 334% debt/gdp, compared with 460% in the 17 economies in the euro-currency zone, and 655% in Japan. If two people had an income of $100,000, and one had debts of $460,000 and the other $334,000, isn't it better to owe $126,000 less which is better for your currency? as it would attract more investors. I personally would rather do business with the second person because he is less likely to go bankrupt. Therefore the US Dollar Index is definitely going above 100, but not sure where it will peak out either 105, 110, 115, or 120. The thing is you can have more debt and an appreciating currency if the central bank is not printing as much. I think that's the case for Germany in control over the Eurozone so there is a top in the Dollar just not yet.

As you pointed out the Japanese debt ratio is twice as great as the US. Most presentations that argue currency default prefer to focus on the American model and deftly ignor the Japanese. The sons of Nippon are far closer to default than the US and much more likely to suffer greater economic disaster than America may. That being said there have been a number of events since April 2016 that ought to raise a yellow flag.

In April, Reuters news service reported that the Chinese began dumping huge amounts of US Treasury bonds they'd previously held as investment. The bonds were picked up by other investors, but the Chinese move can be interpreted as a deliberate action to benefit the Renminbi/Yuan.

In May, it was again reported that the Chinese intended to peg the value of the Yuan to gold. Initial value was set at approx. $1,350/oz. or thereabouts. It is the first major nation to do so since the 1970's when US president Tricky Dick Nixon unlinked the dollar from gold. The Chinese are reported to have the largest gold reserve of any nation. Strangely, nobody knows how much the US has or doesn't have. During his tenure in congress Ron Paul attempted to have an inventory taken, but his effort was summarily blocked. Any, repeat ANY, representation of US gold holdings are suspect as to veracity.

In June, Britain voted to leave the European Union. While there has been a lot of hollering by the media and the US/European financial cartel, no economic indicaters appear to have been adversly affected as of this writing. Time will tell, of course, but we may be certain that no billionaire has lost a dime despite what we are being led to believe.

The last three months have seen landmark events in global economic structure. Exactly what this portends is anybody's guess.

It certainly won't be good, pilgrim.

and that's me, hollering from the choir loft...

[James]

I don't think USA will learn from what Japan is going through. USA will just follow in their steps and allow their debt/gdp to continue to increase. Billionaires have lost quite a bit of money in the equity markets collapsing lately, but I am sure the markets rebound and will go to all time highs again. Perhaps 2017 the equity markets will see their highs then collapse 30-50% from there. The yield curve will go negative and the last rate hike will have been Dec., 2015. Earnings will collapse with equity prices.