This could end America’s free-ride: no more QE; no more balance of payments deficits without tears; and no more foreign financing of the U.S. budget deficit.
We hope the Administration at least is concerned and has it on their radar.
No doubt it is, in part, the result of this (see here).
Good morning from the US home of world's undisputed reserve currency. BUT Dollar's supremacy is slowly eroding. Latest SWIFT payment data highlights that euro continues to close the gap on the dollar. Euro's status continues to grow amid backdrop of potential US-China trade war. pic.twitter.com/T880oroh3T
— Holger Zschaepitz (@Schuldensuehner) March 29, 2018
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In economics, things take longer to happen than you think they will, and then they happen faster than you thought they could.
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Global Macro Monitor
Wait, was there any kind of crisis when the EUR transactions were far ahead of the USD SWIFT transactions in 2011 and 2012? Those years weren’t “crisis” years. Looks to me like we’re just heading back to that regime. I don’t see where this alone would keep anyone awake at night.
Thanks for comments, Doug. It looks like 2011 &2012 were a blip, probably having something to do with Euro debt crisis. I don’t know. What worries me is this looks like a trend and combined with global push back to the Administration’s policies, it is something we have to keep on the radar. The only thing that saved us during the crisis and the ramp of QE was the reserve status and willingness to hold dollars. Otherwise, QE would have resulted in hyperinflation. It’s going to get interesting. Have a great holiday, my brother.
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