"No warning can save people determined to grow suddently rich" - Lord Overstone

  • 1 day Economists Polarized On Trump’s Tariff Plan
  • 2 days Why Are Investors Overlooking Gold Stocks?
  • 2 days The App That Democratized Trading Is Now Worth $5B
  • 2 days Super-Cycles: Why Gold Is Set For A Breakout
  • 2 days U.S. Sanctions Russia For Election Meddling And Cyberattacks
  • 2 days Snap Shares Tank Over ‘Slap Rihanna’ Campaign
  • 2 days How Low Can Bitcoin Go?
  • 2 days Amazon’s Japan HQ Raided In Anti-Monopoly Push
  • 2 days Is Barrick Gold Close To Finding A Bottom?
  • 3 days Morgan Stanley’s Top 10 Short-Term Stock Picks
  • 3 days China: The Land Of The Ultra-Rich
  • 3 days Alibaba Soars On Reports Of China Listing
  • 3 days What Killed Toys ‘R’ Us?
  • 3 days SEC And IRS Take An Aggressive Stance On Cryptocurrencies
  • 3 days Bears And Bulls Face Off In Gold Markets
  • 3 days Bitcoin Is Winning Over The Housing Market
  • 3 days Markets Slide Sideways As Trade War Fears Linger
  • 4 days Why Aren’t Millennials Investing?
  • 4 days Bitcoin And Banking: The Next Mobile Payment Revolution
  • 4 days SEC Cracks Down On Silicon Valley’s “Disruptive Tech”
Alibaba Soars On Reports Of China Listing

Alibaba Soars On Reports Of China Listing

Chinese e-commerce giant Alibaba saw…

Can This Bull Market Become The Longest In History?

Can This Bull Market Become The Longest In History?

Positive job growth and confident…

John Rubino

John Rubino

John Rubino edits DollarCollapse.com and has authored or co-authored five books, including The Money Bubble: What To Do Before It Pops, Clean Money: Picking Winners…

More Info

US Nearing Recession, Dollar Falling Hard

The dollar soars by a record amount versus the euro and the yen in 2014. And economists predict strong growth in 2015. Really? If a country can have a rapidly-appreciating currency with all the benefits that that confers, and strong economic growth with all the obvious advantages that that confers, why wouldn't everyone be going for powerhouse currencies?

Because the two things, a strong currency and accelerating growth, tend to be mutually exclusive in the short run, with a strong currency acting like rising interest rates, slowing growth and making debts harder to service.

So it shouldn't be a surprise that the latest batch of US numbers are somewhere between disappointing and catastrophic. First-quarter GDP was flat and is about to be revised negative. Retail sales were flat in April, the first month of the second quarter, with business inventories and import prices pointing in the same grind-to-a-halt direction.

Annual growth in retail sales

The US is now looking at zero growth for the entire first half of 2015. Six years into a recovery, with record low interest rates and a recent doubling of govern ment debt, that's a bit of a dilemma. Especially given the Fed's threat to raise interest rates in the next few months.

Rates clearly are not going to be raised, at least not on purpose. On the contrary, slow growth always and everywhere leads panicked governments to break out the stimulus. And the dollar is reacting to this prospect exactly as one would expect, by falling like a stone in the past month.

DXY Daily Chart

Gold, meanwhile, is acting like the reciprocal of the dollar, adding $30 an ounce in the past two days.

Spot Gold Price Chart

At the risk of excess repetition, the US is obviously losing the currency war and will soon be forced into a new offensive. Negative interest rates, here we come.


Back to homepage

Leave a comment

Leave a comment

Sign Up For The Safehaven Newsletter