What the U.S. Dollar’s Fall Means for the Stock Market

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Market Watch: The U.S. dollar is looking shaky. Barring some sort of currency meltdown, a weaker dollar should be a positive for equities, though foreign stocks will likely benefit more, analysts said.

Knowing exactly what to make of the dollar can be confusing for investors. After all, a weaker dollar is typically seen as a positive for the U.S. economy and for big multinationals that book a large chunk of revenues overseas, but bear most of their costs at home. However, stocks have done just fine during recent dollar bull markets, which have reflected the strength of the U.S. economy relative to the rest of the world.

And a weaker dollar isn’t necessarily good for stocks if it reflects big problems on the domestic front. Read More …

Opinion: Problems on the domestic front? Nah, everything looks just fine, don’t ya think?

On June 23, 2020 Stephen Roach, a Yale University senior fellow and former Morgan Stanley Asia chairman, told MarketWatch that his forecast for a sharp deterioration of the U.S. dollar could be a very near-term phenomenon, not an event that looms off in the distance.

“I do think it’s something that happens sooner rather than later,” the economist told MarketWatch during a Monday-afternoon interview.

“In a COVID era everything unfolds at warp speed,” Roach told MarketWatch. He pointed to the contraction of the U.S. economy from an employment rate that was hovering around a 50-year low at around 3.5% near the start of 2020 to one that shows some 49 million people unemployed since the pandemic took hold in March. He also noted the rapid and unprecedented fiscal and monetary response that has ballooned the Federal Reserve’s balance sheet to more than $7.2 trillion from $4 trillion at the start of the year as examples of the celerity at which the currency market could change.

The US dollar is the lone world reserve currency. The petrodollar global system, meaning that the nations’ central banks need dollars for international transactions like buying gold, oil, corn, etc.

Since the 2008 financial crisis, US debt has grown from $9 trillion to almost $27 trillion not counting Federal Reserve debt of at least $10 trillion and unfunded liabilities (Medicare, Medicaid and Social Security) of at least $100 trillion.

The US is the world’s largest debtor nation, and the nations that hold dollars are getting worried. The US is also the economic engine of the world and a dollar crash would take the nations down with it.

In 2009, the US government began a program called quantitative easing, printing $4 trillion in new money to buy toxic mortgage bonds from banks that were failing. It was supposed to be temporary. Since the beginning of 2020 the US has printed another $10 trillion.

The end result will one day be hyperinflation as prophesied in Revelation 6:5-6. It may begin in the US and spread to Europe or vice-versa. One way or another, it will happen.

See our paper “The 1% and Revelation: Do Not Harm the Oil and Wine” here