Yesterday I spoke with Kitco News in a great interview with Jeremy Szafron that focused on the US Dollar and the macro outlook.
Some highlights:
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Fed Strategy:
- “I think this is going to be particularly damaging for the Fed, because it’s always fighting the last war. It’s fighting inflation, and the market is now telling you that inflation is a thing of the past.”
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US dollar strength:
- “In such a scenario, we have continued strength in the US dollar. The US remains the cleanest and dirtiest currency, and all roads lead to it against most major currencies as we enter a cyclical downturn.”
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Intervention in the Japanese Yen:
- “The situation in Japan is a bit like a panic… but their best strategy is to buy time until the cyclical slowdown in the US becomes more apparent.”
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Impact of the American political scene:
- “We could have a very big change here… They’re going to try to rally around Kamala Harris… We’re going to be in a tremendous amount of uncertainty… I think in terms of the US dollar itself, it’s a little bit more complicated.”
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Gold as a safe haven:
- “You know, if I reverse this decision, I would like to buy gold because China, Russia, Turkey, the Middle East are all buying gold, India, and they will continue to do so… I think the chance of gold going below $2,000 is close to zero.”
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Emerging Markets and the Swiss Franc:
- “In a cyclical downturn, you unfortunately can’t be in emerging markets… but the Swiss franc, in an environment of political uncertainty, is an incredible place to be.”
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Political and economic challenges facing Europe:
- “Europe just wants to regulate everything while America keeps innovating and China keeps repeating what it does… It’s hard to be optimistic about the euro or Europe or any part of Europe in the long run.”
This article was written by Adam Bouton on www.forexlive.com.