Since the Clinton Administration America has utilized a strong dollar monetary policy. When Trump was elected that all changed. A paradigm shift in monetary policy is underway as America, under President Trump now utilizes a weak dollar monetary policy. This makes American exports cheaper around the globe, and foreign imports into America more expensive. This will have major impacts on your investment portfolio. This video explains these changes and how to thrive in this environment.
EXPLAINING A STRONG DOLLAR VS. WEAK DOLLAR
U.S. DOLLAR MONETARY POLICY
America has had a strong dollar since the Clinton administration
- Foreign countries buying American goods will pay a higher price
- Imports to America are cheaper
- 70% of everything American’s consume is imported—so we see deflation in prices (Our dollar buys more)
- The inverse is also true—American good are more expensive overseas.
HERE'S THE REALITY
The inverse is also true—American goods are more expensive overseas
A GLOBALIST AGENDA OR A CONSUMER FOCUS?
A strong dollar is one way to boost the rest of the world while bringing America down.
Because we purchase more foreign goods
When we do that we export jobs to other countries to build all the stuff we are buying.
A CLASH OF WORLDVIEWS
The Trump administration represents a paradigm shift in U.S. Dollar policy that has dominated US policy since the Clinton administration.
Trump wants to ”make America great again!”
How does he want to accomplish this?
Bring jobs back to AmericaHe doesn’t want Americans or anyone for that matter buying Chinese, Indian, Mexican or European goods.
He wants everyone to buy American.To bring jobs back to America he needs to get the rest of the world buying our stuff.
Through a WEAK DOLLAR policy!
- Then imports will be more expensive and,
- Exports will be cheaper!
EXPLAINING A WEAK DOLLAR
WHAT COMES WITH A WEAK DOLLAR?
- Rising interest rates
These two go hand in hand. A weak dollar means fewer around the world want to invest in it. So, to entice investment in US treasuries, higher interest rates are required. The weaker US Dollar means prices will rise on imported goods and a shift in consumer behavior won’t happen quickly, thus inflation is coming!
CAN A PRESIDENT CHANGE ALL OF THIS?
Of course! Because past Presidential administrations caused this mess, present and future Presidential administrations can fix it—IF they are willing, as the fix will be painful.
HOW DO POLICY MAKERS SLOW DOWN INFLATION?
- By raising interest rates to slow down borrowing.
- When rates are higher and people are handcuffed by debt, they slow down their spending as their debt service increases.
- When they slow down their spending, businesses get hurt, stock valuations come down, people get laid off.
HOW DO DIFFERENT ASSET CLASSES RESPOND TO A WEAK DOLLAR?
- BOND MARKET: Not just DOWN, It will get CRUSHED!
- GOLD AND SILVER: UP
- STOCK MARKET: Initially UP, then DOWN
- REAL ESTATE: Down