{"id":46828,"date":"2018-01-06T04:15:29","date_gmt":"2018-01-06T12:15:29","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=46828"},"modified":"2018-01-09T06:44:11","modified_gmt":"2018-01-09T14:44:11","slug":"black-coffee-6-jan-2018","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id46828-black-coffee-6-jan-2018.html","title":{"rendered":"Black Coffee: America’s Exorbitant Privilege Faces Stiff Resistance"},"content":{"rendered":"

\"\"<\/a>It’s time to sit back, relax and enjoy a little joe<\/em> …<\/p>\n

Welcome to another rousing edition of Black Coffee, your off-beat weekly round-up of what’s been going on in the world of money and personal finance.<\/p>\n

And away we go …<\/p>\n

“The fact that countries accept dollars just as they would gold pushes Americans toward borrowing from foreigners for free, because what they owe them they can pay with dollars they can print at will. Given the consequences that a crisis in this domain could bring, we think we should, before it’s too late, take the means to avoid it.”<\/em><\/p><\/blockquote>\n

— Charles DeGaulle<\/strong><\/p>\n

“Reckless fiscal policy threatens the dollar’s status as a reliable international store of value and the exorbitant privilege that it confers on American consumers.”<\/em><\/p><\/blockquote>\n

— William L. Silber<\/strong><\/p>\n

Credits and Debits<\/strong><\/p>\n

Debit:<\/strong><\/span> Traditional technical analysis suggests that the US dollar index<\/a>, currently at 92.04, is resting on a precipice of critical support. If that support fails and the dollar falls below 92, you should expect a significant decline in the dollar that should result in sharply higher prices — especially for oil and many other commodities. See for yourself:<\/p>\n

\"\"<\/a>

Click to enlarge.<\/p><\/div>\n

Credit:<\/strong><\/span> Stop me if you’ve heard this before. On Thursday, the Dow hit another all-time high, as it crossed the 25,000 mark<\/a> for the very first time. If I didn’t know any better I’d say stocks appear to have reached a permanently high plateau.<\/p>\n

Credit:<\/strong><\/span> Then again, with the stock market continuing to make new all-time highs on an almost daily basis, a “roaring economy,” and “full employment” — if not “better than full<\/a>” — then why are interest rates still near the zero-bound instead of 6%?<\/p>\n