Friday, February 21, 2014

The future of the dollar and inflation

If 2% inflation is the target and if technology advances continue to provide 2% efficiency increases each year, and if the world economy expands 2% per year, then 6% excess money printing can go on long as the dollar does not lose market share in the world GDP increase.  Of course the BRICs and Europeans are not going to put up with this free ride the U.S. dollar is getting forever.  Interest rates will soon rise and game will be up. Dollars will come home and the pressure will be so great that finally the money printing will go to main street instead of buying toxic assets off the banks balance sheets...but with the dollars getting on main street and with dollars coming home...look out for inflation, especially in oil and Chinese products. 

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