Why Trump himself brings down the dollar


Finally, the dream of domestic jingoists begins to come true: the dollar is weakening more and more, and in just five years it may be cheaper not only the euro, but also the Japanese yen. Analysts from the reputable agency Bloomberg write about this trend. Does this mean the collapse of the American national currency and the strengthening of the Russian ruble relative to it?


From the outside it may seem strange, but the US Federal Reserve itself is weakening the dollar, which has approved a new monetary policies... A year ago, the situation was diametrically opposite. While rates in the European Union, Switzerland and Japan were zero, in the United States, the rate rose and reached 2%. The players transferred their capital to the United States, where he felt more comfortable, and President Trump boasted of the "king-dollar". COVID-19 changed everything.

The consequences of several months of the coronavirus pandemic were for the American economics comparable to the results of the Second World War. The volume of production and consumption fell sharply, the White House was forced to further increase the already gigantic national debt for the program to provide financial assistance to the population and business. Now you have to pay dearly for this. To get America out of debt, Washington uses the same recipes that helped after the end of World War II, when the Fed was forced to tightly control the yield curve between 1946 and 1956. Then it helped to "blow off" half of the national debt. Will it work now?

Experts believe that President Trump is trying to kill two birds with one stone. First, by lowering the key rate, the United States is making it easier for itself to service its colossal government debt. Secondly, a weakening dollar will provide an additional incentive for the development of export potential and the return of producers from abroad back to the United States, which the head of the White House is persistently seeking.

So, the dollar under the control of the Fed will indeed weaken from year to year, but there are important nuances. The complete collapse of the "American" should not be expected. The dollar will become cheaper relative to a basket of currencies of other developed countries: euro, Swiss franc, Japanese yen, Canadian dollar, British pound. At the same time, it will remain the main reserve currency and the main international means of payment. In relation to the Russian ruble and the currencies of other developing countries, for example, the Chinese yuan, the Brazilian real or the Mexican peso, miracles are not yet expected.

As financiers explain, this is due to the fact that inflation in Russia will still be higher than in the United States, while the ruble exchange rate is now decoupled from oil, so the growth of oil prices will no longer give the previous jump. As a result, while the dollar is depreciating against the euro or pound, the "Russian" itself will weaken against the "American" or, at best, hesitate. True, there are more optimistic forecasts, according to which one dollar in five years will give from 60 to 67 rubles.
19 comments
Information
Dear reader, to leave comments on the publication, you must to register.
I have an account? Sign in
  1. 123 Offline 123
    123 (123) 1 September 2020 13: 07
    +4
    Finally, the dream of domestic cheers-patriots begins to come true

    Rather, there is a collapse of the liberal worldview, a breakdown of the brain of fans of "capitalization". The universal answer is - what are you saying, look at the dollar rate, it does not work anymore. My condolences to the hamsters, it will be more difficult to puff out the cheeks about the all-powerful dollar. crying

    It may seem strange from the outside, but the US Federal Reserve System itself is weakening the dollar, having approved a new monetary policy.

    What's so strange about that? The depreciation of the currency stimulates production in the country and facilitates the fulfillment of financial obligations. If the US wants to produce anything other than debt and stock quotes, there is no other way. request The dollar is extremely overvalued. The experts' opinion confirms this. yes
    In addition, it is necessary to somehow legalize the results of the FRS mad printer.

    Experts believe that President Trump is trying to kill two birds with one stone. First, by lowering the key rate, the United States is making it easier for itself to service its colossal government debt. Secondly, a weakening dollar will provide an additional incentive for the development of export potential and the return of producers from abroad back to the United States, which the head of the White House is persistently seeking.

    As a result, while the dollar is depreciating against the euro or pound, the "Russian" itself will weaken against the "American" or, at best, hesitate. True, there are more optimistic forecasts, according to which one dollar in five years will give from 60 to 67 rubles.

    The state is not interested in strengthening the ruble, at least for now, its tasks are the same as those of Trump, therefore, the measures will be similar.
  2. Bulanov Offline Bulanov
    Bulanov (Vladimir) 1 September 2020 13: 42
    +1
    If now an ounce of gold costs, for example, $ 2, and soon it will cost $ 10, then the US debt will be 5 times less, since the dollar is not tied to gold, but the US debts to other countries are tied to it. Therefore, by and large, the "deep state" of the United States is more profitable than Trump's arrival for a second term, no matter how the "Nanai boys" - Democrats and Republicans - fight in public. In a second term, Trump could devalue the dollar and pay off a huge US debt. And then new money will be printed. And the democrats will spread their hands and say to the whole world, as in a well-known anecdote: - Well, I couldn't do it! Remember from the beginning of the 20th century - "I run into the buffet, not a penny of money, change 40 million ..."
  3. Sergey Latyshev Offline Sergey Latyshev
    Sergey Latyshev (Serge) 1 September 2020 14: 18
    -4
    Uh ... A new kind of noodle?

    Finally, the dream of domestic jingoists begins to come true: the dollar is weakening more and more, and in just five years it may be cheaper not only the euro, but also the Japanese yen and the Swiss franc.

    - "Swiss franc" 81,62. USD 73,56. Already cheaper. And it was almost always cheaper.

    Every week for 30 years it's the same thing - surely they stimulate well ...
    1. Alexzn Offline Alexzn
      Alexzn (Alexander) 1 September 2020 15: 07
      0
      London has dropped its pound and is very pleased.
  4. Alexzn Offline Alexzn
    Alexzn (Alexander) 1 September 2020 15: 06
    0
    Quote: Bulanov
    If now an ounce of gold costs, for example, $ 2, and soon it will cost $ 10, then the US debt will be 5 times less, since the dollar is not tied to gold, but the US debts to other countries are tied to it. Therefore, by and large, the "deep state" of the United States is more profitable than Trump's arrival for a second term, no matter how the "Nanai boys" - Democrats and Republicans - fight in public. In a second term, Trump could devalue the dollar and pay off a huge US debt. And then new money will be printed. And the democrats will spread their hands and say to the whole world, as in a well-known anecdote: - Well, I couldn't do it! Remember from the beginning of the 20th century - I run into the buffet, not a penny of money, change 40 million ...

    And what does gold have to do with it?
    How can you pay off the debt by depreciating the dollar?
    1. Bulanov Offline Bulanov
      Bulanov (Vladimir) 1 September 2020 16: 17
      +1
      Elementary Watson! Yesterday your dollar was American, and today, after inflation, it is Zimbabwean. You owed your neighbor 100 American, and gave 100 Zimbabweans! And if he gets nervous, threaten to hit in the face. Can I explain it clearly? By the way, at the end of the USSR, so many shustriks rose.
  5. Alexzn Offline Alexzn
    Alexzn (Alexander) 1 September 2020 15: 08
    0
    For some reason, they forgot the main reason for the creeping devaluation of the dollar - the artificial undervaluation of the yuan.
  6. Tektor Offline Tektor
    Tektor (Tektor) 1 September 2020 15: 35
    +1
    As financiers explain, this is due to the fact that inflation in Russia will still be higher than in the United States.

    If it is so, then our financiers are vile suckers who do not understand anything in economics. Our historical chance of survival depends precisely on whether the ruble will manage not to accelerate inflation within the country following its acceleration in the states. And from this it strictly follows that the ruble should strengthen against the dollar. But the rate of this strengthening should not exceed the rate of inflation of the dollar within the states. Those. our production must remain within the same competitive framework as before. And don't give the American economy any advantage. The United States will benefit if it can devalue the dollar faster than inflation. It's complicated.
  7. Alexzn Offline Alexzn
    Alexzn (Alexander) 1 September 2020 18: 37
    0
    Quote: Bulanov
    Elementary Watson! Yesterday your dollar was American, and today, after inflation, it is Zimbabwean. You owed your neighbor 100 American, and gave 100 Zimbabweans! And if he gets nervous, threaten to hit in the face. Can I explain it clearly? By the way, at the end of the USSR, so many shustriks rose.

    Clear! American businesses owned US dollars and happily exchanged them for Zimbabweans!
    Naive logic! Remind me what is the inflation rate in the US? Guess why I am asking.
    1. Oyo Sarkazmi Offline Oyo Sarkazmi
      Oyo Sarkazmi (Oyo Sarkazmi) 1 September 2020 21: 27
      +1
      Quote: AlexZN
      Remind me what is the inflation rate in the US? Guess why I am asking.

      The USA is an exporter of inflation. China is an exporter of deflation. For 10 years they balanced each other. But with a fall in cheap exports from China to the United States, this will lead to the acceleration of internal inflation, since there is many times more money than goods. Tesla, which produces 200 thousand cars a year, "costs" 400 billion, Volkswagen, which produces 4 million cars a year, costs 40 billion. This is the entire American economy. When the withdrawal of shares to fiat begins, the dollar may collapse by 10% per day, and the shares - by 90%.
  8. Alexzn Offline Alexzn
    Alexzn (Alexander) 1 September 2020 18: 44
    0
    Quote: AlexZN
    If now an ounce of gold costs, for example, 2 thousand dollars, and soon it will cost 10 thousand, then the US debt will be 5 times less, since the dollar is not tied to gold, but the US debts to other countries are tied to it.

    Does it have a meaning? Where do you get this conspiracy theories? Where did you put gold into this scheme? Do you understand the nature of the US national debt?
    1. Bulanov Offline Bulanov
      Bulanov (Vladimir) 2 September 2020 09: 12
      +1
      Gold - for example, it is written there! This is a classic of commodity-money relations in the history of mankind. Remember how much money was worth in the Roman Empire under the Republic, and how much at the end of the Principate. Again, not clear? Take another commodity that can show dollar depreciation over time. Finally, remember why The Copper Riot came about!

      The emergence of a large amount of money led to the fact that they began to depreciate. In 1660 one silver coin cost 1,5 copper coins, in 1661 its price became 4 copper coins, and by 1663 it increased to 15 copper coins.

      https://all-russia-history.ru/copper-riot
  9. Citizen Mѣshkov (Sergѣi) 1 September 2020 19: 00
    0
    No wonder. After all, their debts are approaching 30 trillion!
  10. boriz Offline boriz
    boriz (boriz) 1 September 2020 23: 00
    0
    In relation to [/ b] the Russian ruble and currencies of other developing countries, for example, Chinese yuan, Brazilian real or Mexican peso, miracles are not expected yet.

    Logically, the dollar should fall primarily against the yuan.
  11. Nikolay Malyugin (Nikolai Malyugin) 2 September 2020 07: 57
    +1
    Economics experts say that with a small devaluation, it is easier to establish exports. I myself am weak in this matter.
  12. Alexzn Offline Alexzn
    Alexzn (Alexander) 2 September 2020 08: 24
    0
    Quote: Oyo Sarkazmi
    Quote: AlexZN
    Remind me what is the inflation rate in the US? Guess why I am asking.

    The USA is an exporter of inflation. China is an exporter of deflation. For 10 years they balanced each other. But with a fall in cheap exports from China to the United States, this will lead to the acceleration of internal inflation, since there is many times more money than goods. Tesla, which produces 200 thousand cars a year, "costs" 400 billion, Volkswagen, which produces 4 million cars a year, costs 40 billion. This is the entire American economy. When the withdrawal of shares to fiat begins, the dollar may collapse by 10% per day, and the shares - by 90%.

    The inflation-deflation scheme undoubtedly really exists. It's not for nothing that I made a comment about the relationship between the dollar and the yuan. The devaluation of the yuan stimulates China's exports, but at the same time increases the negative balance of the US trade balance and, accordingly, debt. It is difficult to say how long the tandem beneficial to both sides will last and in favor of whom and how it will disintegrate.
    Comparing Volkswagen and Tesla only in terms of capitalization cost is only conditional. The given example looks paradoxical if one does not know the market's willingness to invest in each of the companies, the level of their debt obligations (primarily for pension funds), prospects for the future, etc. The problem of blown bubbles exists, because we see the reality of cryptocurrencies - a surreal version of a currency. We see the really existing US national debt, which is being successfully serviced.
    The Titanic is sailing.
  13. shinobi Offline shinobi
    shinobi (Yuri) 2 September 2020 09: 24
    +1
    This song has been sung to various arrangements for 40 years. Even if the US collapses, which is possible, it will mean absolutely nothing to the green. The Fed is a non-Yankee supranational structure and will replace the US executive with a new IMF executive. Perhaps she has already changed. The global financial structure does not have a fixed state ownership, as it was until the middle of the 20th century. The old world died along with the USSR. A new one is just being born. American globalists are trying to ride this process, not realizing that first they need to solve their internal problems, because the old USA has no place in the new world of transnational mega-corporations and decentralized financial systems. Nobody knows what this "new brave world" will be like. Unless dystopian writers try to predict.
  14. Alexzn Offline Alexzn
    Alexzn (Alexander) 2 September 2020 09: 25
    0
    Quote: boriz
    In relation to [/ b] the Russian ruble and currencies of other developing countries, for example, Chinese yuan, Brazilian real or Mexican peso, miracles are not expected yet.

    Logically, the dollar should fall primarily against the yuan.

    It's simple - China is artificially devaluing the yuan and doing so to a greater extent than the dollar. To realize Trump's dream of returning production to America, it is necessary to undervalue the dollar ...
  15. Alexzn Offline Alexzn
    Alexzn (Alexander) 2 September 2020 09: 40
    0
    Quote: Bulanov
    Gold - for example, it is written there! This is a classic of commodity-money relations in the history of mankind. Remember how much money was worth in the Roman Empire under the Republic, and how much at the end of the Principate. Again, not clear? Take another commodity that can show dollar depreciation over time. Finally, remember why The Copper Riot came about!

    The emergence of a large amount of money led to the fact that they began to depreciate. In 1660 one silver coin cost 1,5 copper coins, in 1661 its price became 4 copper coins, and by 1663 it increased to 15 copper coins.

    Source: https://all-russia-history.ru/copper-riot
    © all-russia-history.ru. Russian history

    You need to understand - there is a difference between the concepts of "money" and "finance". From the second half of the 20th century to the present time, gold was not money, but was a reserve commodity. Basel-3 a couple of years ago returned gold to the status of a monetary asset, but in the practice of financial transactions, gold acts as a reserve commodity.
    Gold has nothing to do with the US national debt (as, indeed, with the national debt of any country). Dollar inflation and depreciation are related processes, but not necessarily unidirectional.