Courtesy of Tyler Durden at Zero Hedge
A very much… welcoming…Margaret Brennan discusses Niall Ferguson’s opinion on the dollar, and his Fed policy outlook. Aside from the red dress, notable items include Niall’s very astute observation that "Chimerica," which for all intents and purposes is a megalith sovereign, joined at the hip, and whose existence is predicated on the "non-defection" of the significant other in perpetuity, will continue to shift the pain of adjustment on the "developed world." Some very critical thoughts on why Europe and Japan are more than happy to be on the receiving end of the K-Y in the currency department so long as their markets obtain the benefit of the appreciating S&P.
One thing many pundits forget is that while the S&P indexed for the drop in the dollar, is flat, global markets, especially the eurozone, follow American equities tick for tick, indexed in domestic currencies (and the impact is magnified when reindexed for the double whammy of capital and currency appreciation). So, in essence, US dollar weakness, in addition to impaling the US middle class courtesy of a 10% loss in dollar purchasing power, is translating into completely unwarranted European market strength. One wonders (or not) why the G-20 is more than happy to perpetuate the daily raping and pillaging of the DXY.