Could the dollar reaches 120 level again ?
Debt as Robert Kiyosaki said can be a double edge sword. On a consumer level, if you have outstanding loan , say credit card debts , it is 24% per annum and paying the minimum would be disastrous.
However, on a national level, the government has several tools to play around to minimise their debts. Thus far, I have not heard of any countries that are debt free. It seems as the economy gets better, the more debts the countries got itself into.
The government debt for US is already in trillions and I believe Trump would be printing money soon! And the irony is with more US dollars floating in the market, should its currency not come tumbling down? After the Financial Crisis in 2009, the US dollar has never been stronger , riding on more than a decade of uptrend move.
We must not forget the fact that the US dollars remain a "safe haven" asset to many and when inflation hits US, this would be an asset class that is going to be snap up by the institutions.
Consumers in US would be paying higher price with the tariffs that other countries are imposing to counteract Trump's tariffs. Feds want to bring the inflation rate to 2% and at current rate of 2.89, it has quite a journey to travel.
So , if the inflation rates continues to climb from 2.89, then the Feds will be force to increase its interest rates once more to cool down the economy. Very simple right ? With higher interest rates, consumers would want to hold more cash at bank to earn the interest and spend less, thus lowering the demand of goods and services and making the suppliers/sellers to reduce their price and thus lower inflation.
Let's watch and see over the next few months on how the dollars performance will turn out .
However, on a national level, the government has several tools to play around to minimise their debts. Thus far, I have not heard of any countries that are debt free. It seems as the economy gets better, the more debts the countries got itself into.
The government debt for US is already in trillions and I believe Trump would be printing money soon! And the irony is with more US dollars floating in the market, should its currency not come tumbling down? After the Financial Crisis in 2009, the US dollar has never been stronger , riding on more than a decade of uptrend move.
We must not forget the fact that the US dollars remain a "safe haven" asset to many and when inflation hits US, this would be an asset class that is going to be snap up by the institutions.
Consumers in US would be paying higher price with the tariffs that other countries are imposing to counteract Trump's tariffs. Feds want to bring the inflation rate to 2% and at current rate of 2.89, it has quite a journey to travel.
So , if the inflation rates continues to climb from 2.89, then the Feds will be force to increase its interest rates once more to cool down the economy. Very simple right ? With higher interest rates, consumers would want to hold more cash at bank to earn the interest and spend less, thus lowering the demand of goods and services and making the suppliers/sellers to reduce their price and thus lower inflation.
Let's watch and see over the next few months on how the dollars performance will turn out .
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.