It’s simply a matter of time. Central banks have backed themselves into a corner. They can easily devalue the currency to remain competitive for exports. But that means more money printing. Will they do it? Will they hyperinflation the currency? Or will the Fed reduce its balance sheet to 0 and the market will buy up over $4 trillion in garbage debt?
What do you think will happen?
Just look at how MASSIVE the Federal Reserve’s balance sheet is. We’re being told the balance sheet is on it’s way to “normalization” but at its current pace, it would probably be the year 3000 before we get to that point. One issue not being considered is that if the dollar continues to remain strong and potentially even more so, who will buy up the debt that the Fed is selling off?
All Federal Reserve Banks: Total Assets | FRED | St. Louis Fed
Trade Weighted U.S. Dollar Index: Broad | FRED | St. Louis Fed
DB central bank balance sheet.jpg (836×621)