the strong usd

[thriftyandboringinohio]

Re: the strong usd

... But as the end game approaches, I'm finally thinking we need to figure out how to distinguish between the head-fakes, like the current Administration/Fed led effort to push the US$ exchange rate down, from the arrival of the long anticipated secular shift.

Great point GRG55. Let's not forget that the US is not the only player on the field, and right now the U.S. team may not be overflowing with the best talent. The intentions and actions of China and Europe are pretty important, perhaps more than ever.

China gets bigger and more capable every day, they are a substantially more powerful actor in the global economy today than they were ten years ago during the last crisis. They continue to pick up new friends in Asia and South America, buying favors with money the way the U.S once did. Europe, for the first time in 50 years, may not be in lock step with Washington, now more inclined to go their own way for their own reasons.

[dcarrigg]

Re: the strong usd

i believe this will be the difficulty this time also. Are we one election cycle away from the turning point in the US$? A few years? A decade?

I'm in a weird spot on this. I think it's inevitable that a new era in political time is coming soon. And I think it will hit harder and faster than people realize. I suspect jk's prediction errs too much toward the expected, for example, a Democratic white house win in 2020 with a Republican Senate win is too centrist and neutral a result to be likely. I think it's more likely we see record turnout and a wipeout one way or the other, not another squeaker election as has been typical post-Reagan.

The other day, in casual conversation, Yankee liberals--professionals in their 40s--were talking with me on the deck in hushed voices about the prospect of taking up arms over the Sanctuary Cities stuff. Mayors are in open rebellion across the north from Boston to Chicago. It reminded me of the Fugitive Slave Act of 1850, in that northern states and cities are being forced by the Federal Government to round people up and ship them out against the will of most of their people, and forcing northern police to cooperate against the will of mayors and city councils. These new ICE raids are making everybody's trigger finger itchy.

Nothing riles Yankee blood up harder than being forced to commit what they consider a sin. If they wanted 'the libs' pissed off, this summer, they've got what they wanted. John Brown gun clubs are popping up all over the place. They were marching armed locally on the 4th with signs about closing the asylum detention camps. You can lose your class a license to carry in Mass for shit like that. But the police chief didn't come down on them. I've met 2 kids so far, white suburban boys in their early 20s, who have, without anyone's approval, up and gone to Kurdistan to fight for Rojava. They are back and training less radical people for what they believe is the coming war at home. I don't think, at least in my living memory, I've seen anything remotely like this. There were always fringe folk. But regular folk are about an inch away from being up in arms. Closest I recall was 2002 in the run-up to the Iraq War. I remember our Episcopal Bishop, a man I knew named Thomas Shaw, chained himself to city hall and was arrested. That era had something of a similar feeling. But there was more of an edge of trying to wake people up or something. This time the edge is decidedly angrier. More existential. Nobody's trying to reason with the other side any more. Only beat them. And I'm seeing men of God and professionals with homes and jobs and wives and kids and lawns to mow, talk about taking up the cause. I'm not talking "yee-haw, giddy-up!" shit. I'm talking more of a stern, "perhaps we'll have to bear this terrible burden."

Which is all a long way of saying, it's a tinder box right now. And it ain't all to do with economics.

Still, despite that, I'm not certain even a one-party supermajority can lift wages. The institutions that keep wages low in perpetuity have strong roots. They're so ingrained. It's so built in. It's going to take a revolution in how millions of people do their day to day desk jobs to move the needle. And despite all the plans for universal healthcare and free college out there, I don't see anyone proposing any changes to labor law that would really do the trick.

I mean, this is America. Nothing changes. Nothing happens. Until everything does. The entirety of the story of 20th century law can just about be told in the story of the years 1933-1937 and 1964 to 1966. Little else mattered. It's a nation that jerks forward. Always standing with trepidation on the edge of the pool, never wading in, until suddenly she puts both feet in the deep end. Then all bets are off.

I suspect that if something moves on the issue, it won't be directly. It'll change while everyone's preoccupied with something else.

But I also don't think we have 10 years. More on that in this thread. Maybe it's not 2020. Maybe it's 2024. But by 2030 if there's no major healthcare law or school law, the US becomes a net exporter of students in a brain drain with health costs eating a third of the economy. I think it's untenable. Doing nothing will lead to radical change as sure as doing something. Each year for the past 4 we have gotten kicked off our health plan and had to get a worse, significantly more expensive one from the same company. It's not going to stop. Premiums are climbing twice the rate of inflation minimum. Deductibles twice that rate still. Average premiums are up to $20k per year. Median household income is in the $60s. It's already over a third of gross pay to cover the family. By 2030 it will be half. Housing is already over half though. That can't happen. Simple arithmetic don't add up. Something's got to give. And soon.

[vt]

Re: the strong usd

Immigration is not working. We now have a population crossing illegally who make up less than 1% of global population.

Asia and Africa make up over 70% of world population. Current events are denying them immigration and favoring small group cheating to get in. Disease is rampart, putting current people in the U.S. at risk.

Th left speaks of diversity? This is the opposite of favoring a small group over a very diverse and deserving population to contribute to the growth of our economy.

This is not fair to anyone. It's blatant favoritism.

[dcarrigg]

Re: the strong usd

It's irrelevant. As long as people think of it as brutalization of innocent women and children, they'll be up in arms. There's no way around it. Scuttlebutt at the old Hibernian club is that they're doing it to Catholic kids again. Kids whose grandpas had numbers tattooed on their arms are arming up themselves. Sending ICE raids to northern cities was a bad call. Telegraphing their location and time to the public was a much worse call.

There will be blood.

[vt]

Re: the strong usd

There is no reason for brutal attacks on people. This must stop.

But what about deporting MS-13 and violent criminals, who prey on their immigrant populations?

[dcarrigg]

Re: the strong usd

I think it's too late. Ship has sailed. Horse is out the gate. We've got mayors and local police openly working with activists to set up secret safe houses to hide women and children from federal police and defy the President of the United States. I never thought I'd see the day. But here we are. It's not just up north either. People tend to get real touchy about this kinda stuff.

[jk]

Re: the strong usd

i hope it doesn't come to armed combat. [ if it does, even more unfortunately, imo, right wing populists have a lot more guns and know better how to use them.]

my hope is that somehow progressivism and populism join forces. i doubt eliz warren can herself get elected, but she captures that idea of a more class-based, as opposed to culture-based, coalition.

in the meantime, democratic candidates are so focused on winning the left end of the party in order to capture the nomination, that they risk losing the moderate suburban women who flipped the house of representatives. [eliminate all private insurance at a stroke, abortion without constraint or qualms, essentially open borders, healthcare for illegals without mention of e.g. veterans' needs or homelessness, and so on]. that worries me. not that those swing-voter women will necessarily vote for trump, but they might well stay home on election day.

i just finished reading gavekal's jan '19 book, "clash of empires." i highly recommend this short, extremely interesting book. it predicts [as i have for years] that the usd global reserve reserve system will break apart into 3 regional blocs, each with its own reserve currency. it suggests that the current usd strength/usd shortage is based on large dollar liabilities that were accumulated under the fading usd gobal reserve system. when those dollar liabilities are paid down or written off, the transition will accelerate.

they note that in recent years the volatility of gold denominated in renminbi has been very constrained, as has the volatility of other asian currencies [so. korean won, thai bhat, phillipine peso, taiwan dollar, etc denominated in renmenbi]. the chinese are creating a defacto asian bretton woods ii, centered on the renmenbi which convertible to gold at a volatility-constrained floating rate via the hong kong exchange. meanwhile, you have oil convertible to renmenbi via the shanghai exchange. what is emerging is an asian currency bloc independent of the weaponized usd system.

when that occurs cannot, imo, be predicted. but one can watch for signs of the turn.

btw, if the renminbi is almost price-fixed to gold, an investment in gold is almost price-fixed to renminbi.

[dcarrigg]

Re: the strong usd

This is counterintuitive to me. Did they give a precise date as to when did the Yuan-Gold price-fix began? I was under the impression that the Yuan has been undervalued compared to the USD over time. 2 to the dollar back in the mid 80s, 7 to the dollar now, kept between 6 and 7 to the buck over the last 15 years.

[jk]

Re: the strong usd

look at the roughly 10 years from 2010 to present. gold has been constrained to a 6000-7000 range. or maybe we should say the yuan has been constrained to a 1/6000-1/7000 range. so a 14-16% range. given the quick convertibility of renminbi to gold via the hk market it means that commodity exporters can sell to china, get paid in renminbi and - if they don't want some chinese goods and are reluctant to hold chinese bonds- get a quick exit to eminently liquid payment in gold.

if you look at charts of the asian currencies i mentioned vs the renminbi there has been exactly same near-stability of exchange rates. [except for the indonesian rupiah for some reason.] it's not exactly bretton woods, but it's not the wild west either.

[Woodsman]

Re: the strong usd

...The other day, in casual conversation, Yankee liberals--professionals in their 40s--were talking with me on the deck in hushed voices about the prospect of taking up arms over the Sanctuary Cities stuff. Mayors are in open rebellion across the north from Boston to Chicago. It reminded me of the Fugitive Slave Act of 1850, in that northern states and cities are being forced by the Federal Government to round people up and ship them out against the will of most of their people, and forcing northern police to cooperate against the will of mayors and city councils. These new ICE raids are making everybody's trigger finger itchy.

Nothing riles Yankee blood up harder than being forced to commit what they consider a sin. If they wanted 'the libs' pissed off, this summer, they've got what they wanted. John Brown gun clubs are popping up all over the place. They were marching armed locally on the 4th with signs about closing the asylum detention camps. You can lose your class a license to carry in Mass for shit like that. But the police chief didn't come down on them. I've met 2 kids so far, white suburban boys in their early 20s, who have, without anyone's approval, up and gone to Kurdistan to fight for Rojava. They are back and training less radical people for what they believe is the coming war at home...

Officials and private citizens who arrogate for themselves the power to obstruct immigration enforcement pose a serious threat to the safety of the American people and the rule of law. And they will be dealt with as have other Massachusetts officials who choose to take the law into their own hands.

Only Congress has plenary authority over immigration and any changes must come through the legislative process per Art. I, Sec.8, cl. 4 of the US Constitution. Only the Executive has the authority to direct the manner in which immigration laws are enforced. Full stop.

If the seditious and terroristic talk you overheard about "taking up arms" manifests or incites any actions, the actors will meet the same fate as John Brown and the copycats like the ANTIFA terrorist who firebombed the ICE facility in Tacoma.

If these folks are your friends, you would be good to discourage them of these notions.

In an indictment filed with the U.S. District Court for the District of Massachusetts on April 25, 2019, Massachusetts District Court Judge Shelley Richmond Joseph and Massachusetts Trial Court Officer Wesley MacGregor were charged with conspiracy to obstruct justice; obstruction of justice, aiding and abetting; and obstruction of a federal proceeding, aiding and abetting. MacGregor was also charged with perjury. Those charges arose out of their alleged efforts to assist a twice-deported alien evade arrest by a U.S. Immigration and Customs Enforcement (ICE) officer.

https://cis.org/Arthur/Judge-Court-O...bstructing-ICE

[dcarrigg]

Re: the strong usd

Pretty sure everyone's aware of that. Bishop Shaw went down on charges back in 2002 too. I didn't point it out to glorify it. But even the grey hairs under their old white congregationalist steeples are getting anxious as all get-out.

My point was only this: If the goal was rile up the libs, mission accomplished. They're riled like I haven't seen in a long time. Mayors are coming out and openly calling their cities sanctuary cities with pride. That wasn't happening before. I actually think it's a dark turn.

But then again, this is America.

[jk]

Re: the strong usd

sign of the times:

Not sure what happened to my tweet on Singapore lack of shipment (-17.3% for non-oil domestic exports). By country breakdown:USA +1.5%YoY EU 28 down -22.1% China -15.8% EM -17.% India -10.8% Others -19.1%

[Woodsman]

Re: the strong usd

...But then again, this is America.

Those promoting sedition, regardless of their factional orientation, would do well to remember that.

[vt]

Re: the strong usd

It would be a mistake to try to bring out guns to support those who cheat legal immigrants and make a mockery of diversity.

Antifa are the Nazi brown shirts of the left. No one should be allowed to have a violent protest and cover their faces up.

[dcarrigg]

Re: the strong usd

2 visions. You force a choice between the city on the hill and the plantation, and you know what'll start bubbling up from Massachusetts. You pointed it out yourself with the DA story. It's like a force of nature. Love it, hate it, or in between. Just as sure as they still whistle dixie at ole miss in oxford, the soul of the madman from springfield keeps marching on. Action breeds reaction. It is what it is. No more use trying to stop it than trying to stop the sun from coming up or the tide from going out. It's all predictable outcomes of extreme polarization. Seems to me it'll get a lot more intense before it's resolved.

I still think announcing the time and locations of raids ahead of time is dangerous and stupid. That's probably why they didn't happen. The whole point of raids is to surprise people so the process goes easy. Telegraphing them ahead of time is begging for a fight. Everyone gears up. From the New York Public Library to Synagogues to the congregation at St. Paul's Cathedral. Like I said, I'm not talking antifa radical kids in black here. It's the old Yankee establishment.