Well, I’m back from vacation, to quite a few new subscribers and a lot of congratulatory emails for my notes on the potential downturn and the yen carry trade (I even realized when I got back that I also wrote about the incoming downturn in mid july) that did indeed hit markets very hard at the start of this month.
While the turmoil certainly left some investors shaken, I was (somewhat) prepared for it and it didn’t really shift my perspective on the current market conditions and overall structure of the American economy (see Is the Us Recession-Proof?).
I will expand on that point tomorrow but, for now, I want to go over the crucial role of the dollar in the global economy and the incredible competitive advantage it stills bestows on the USA. One is constantly hearing about the planet “dedollarizing” these days, but we’ll see the reality is a bit more complex than that.
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