by QTR’s Fringe Finance at ZeroHedge
Optimists about the U.S. economy and the dollar’s global reserve status have had the wind at their back for half of a century, so why should anyone expect them to consider an alternative viewpoint?
Therein lies the folly that our country faces.
There’s a reason that every financial disclosure, brochure, hedge fund letter or commercial always says “past performance is not indicative of future results” on it: because it isn’t. But that boilerplate-sounding warning is printed in size zero font and, as a result, also rests in the equivalent of size zero font in the brains of U.S. dollar bulls.
The fact is that warnings about the precarious nature of the U.S. dollar – whether bombastic or not – are probably more important today than they have ever been. But these warnings can’t compete with 50 years of the “trend being the United States’ friend”, a hurricane force tailwind that includes politicians on both sides of the aisle, the nation’s central bank, the treasury secretary and the roaring concert of all financial news media.
Those who believe the dollar is always destined to be the backbone of the global economy are like players at a roulette table who have a system of betting all of the inside numbers, except for the number 13. Given a small house edge and the fact that you have to lay 35 to win 36 (excluding the 0 and 00) means that, in order to start cashing in on your system in a big way, you have to get hot and tear off a ton of wins in a row. But when the odds are in your favor – and betting 35 of 36 total outcomes definitely skews them to your advantage – it’s almost a certainty you’ll “get hot” and start winning multiple spins in row. When you start winning dozens of spins in a row, it becomes impossible to hear the skepticism of the one person betting the 13 or warning you that eventually, it’ll come out.
Well right now,
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