"Lol" said the scorpion, "LMAO."

Swim while the swimming is good.

I’ll explain the meme later, but first things first I want to expand on something I talked about last post.

I talked about how I wanted to watch for a breakout in DXY in either direction, and how an especially weak dollar might be more of a concern than a strong one. I don’t think that was a good point. What my tired, (still) jet lagged and sick brain was trying to express was that a weak dollar could be a result of a weak economy, and break the “US is a better place for our money than anywhere else” dynamic that is really supporting stocks. But it’s much better to just watch for GDP #s than worrying about a weak dollar.

A STRONG dollar is really a much bigger fear for it’s implications on asset markets. Luke Gromen talks about that here:

Something I’m Thinking About

Read a super interesting article about how the United States’ status as the reserve currency has given us a form of dutch disease. The article is from 2019, before Covid and the ensuing policies. See if you can spot the part that turned out to be more right than the author could possibly know.

Yea… the money was distributed as patronage in response to the Covid pandemic. I won’t share any more of the article, you really should just go read the whole thing here: https://on.ft.com/49hNZwn

This gives us just one more toolkit with which to explain the US fiscal situation, and the implications for investing. As if we needed another..

So what’s the takeaway?

1. The US manufacturing sector is doomed to a slow death.

2. The gains of the US system will continue to be concentrated in fewer and fewer hands.

3. Financialization will only continue to increase.

Long the big winners of this economy and don’t hold too many dollars because we are going to over-produce them. Wondering if we might somehow change course? Refer to the comic I led with.