US Dollar Normalization Is An Opportunity by Todd Sullivan
Amid the turmoil in the public markets and the staggering macroeconomic environment, it should come as no surprise that the private markets are also struggling. In fact, there are some important links between private equity and the current economic environment. A closer look at PE reveals that the industry often serves as a leading indicator Read More
Long-Term US Dollar:
Short-Term US Dollar:
- Capital flowed to the US seeking a safe haven from the global financial correction of 2008-2009 as the US took action to offset liquidity issues.
- China in 2010 provides liquidity and US dollar falls as capital shifts back to emerging markets. Emerging Markets peak Jan 2011.
- US$ begins to rise in 2011 as stories in the media reflect a stream of capital seeking safe havens in Western cities and Western companies. US withdraws from Iraq and Afghanistan.
- US$ soars when Russia invades Ukraine 2014. ISIS is on the rise. Terrorism rises globally. Capital pools in the US financial assets. 10yr US Treas rates fall as a result.
- US$ weakness long-term is the result of US citizens shifting manufacturing to lower-cost less-developed countries as the exercise of individual property rights seeks higher standards of living.
- US$ strength short-term is the result of non-US citizens seeking safe-havens or better returns for wealth