Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!

Mighty Dollar: Economist Contrarian Cover Nails the Top

Courtesy of Mish.

Magazine covers tend to coincide with extreme sentiment. The Economist is particularly good at offering contrarian articles.

In December of 2016, The Economist nailed the peak in the US dollar with its “Mighty Dollar” issue.

The dollar has been gradually gaining strength for years. But the prompt for this latest surge is the prospect of a shift in the economic-policy mix in America. The weight of investors’ money has bet that Mr Trump will cut taxes and spend more public funds on fixing America’s crumbling infrastructure. A big fiscal boost would lead the Federal Reserve to raise interest rates at a faster rate to check inflation. America’s ten-year bond yield has risen to 2.3%, from almost 1.7% on election night. Higher yields are a magnet for capital flows.

The trade deficit will widen as a strong currency squeezes exports and sucks in imports. In the Reagan era, a soaring deficit stoked protectionism. This time America starts with a big deficit and one that has already been politicized, not least by Mr. Trump, who sees it as evidence that the rules of international commerce are rigged in other countries’ favor. A bigger deficit raises the chances that he act on his threats to impose steep tariffs on imports from China and Mexico in an attempt to bring trade into balance. If Mr. Trump succumbs to his protectionist instincts, the consequences would be disastrous for all.

US Dollar Index

Special Treat

As a special treat, The Economist takes you “Behind the scenes” for a look at its contrarian cover that proved to be a market-topping call.

Edwards Carr Deputy Editor discusses the “Mighty dollar” with Editor-in-chief Zanny Minton Beddoes.


Continue reading here…


Do you know someone who would benefit from this information? We can send your friend a strictly confidential, one-time email telling them about this information. Your privacy and your friend's privacy is your business... no spam! Click here and tell a friend!





You must be logged in to make a comment.
You can sign up for a membership or get a FREE Daily News membership or log in

Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

Click here to see some testimonials from our members!