The reason cited for Dollar strength is called the Milk Shake Theory. This is premised on the notion that global debt is denominated in USD and Dollars, and as credit tightens, becomes scarce to service said debt. This overlooks the increasing likelihood that this debt gets defaulted on which eliminates the need to service all together. Effectively milk shake is a transitory situation.
At any rate at this stage the intervention involves selling Treasuries to keep a lid on Dollar strength. Custodial holdings at the Fed demonstrated this – $182B liquidated since the war began. This has also pressured yields higher right as financings and rollovers intensify.
This also explains the weakness in gold. But once the big defaults and credit downgrades materializes this flips overnight.
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