The U.S. Dollar Is Going Parabolic – Something Somewhere Is Collapsing
by Dave Kranzler
TheDailyCoin.org
March 11, 2015
The common “narrative” out there is that the dollar squeeze is being fueled by European sovereign and corporate entities scrambling for dollars in order to pay dollar-denominated debt obligations. Yes, this is part of the equation. But, just like in 2008, it is a sympton of a castrophic underlying systemic problem. After all, the Fed has created close to $4 trillion in new dollars, $2.6 trillion of which are sitting in the excess reserve account of the big banks at the Fed earning interest. That’s $2.6 trillion in excess dollars that can used to fund any excess demand for dollars.
There’s also a repo collateral short squeeze plus a vicious Treasury short-squeeze going on, especially in the middle of the curve, where the Fed has removed most of the supply. But again, these are all “symptoms” of an underlying problem. Let’s not forget that the price of oil, along with many other key economic indicators are collapsing right now.
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