U.S. Dollar

US Dollar Devaluation Prediction for 2015

A debt crisis has taken the western world by storm, but few seem to be sounding the alarm. The U.S dollar, the go-to currency for global economic stability and growth, is imploding at an unprecedented rate.

Profit Confidential editors have been critics of the U.S.’s inability to reign-in government spending. Based on the White House’s own figures, the national debt will reach $20.0 trillion by the end of this decade—about 140% of our current gross domestic product (GDP).

Historically, countries that have incurred considerable debt and consistent national debt-to-GDP multiples of 120% or more have experienced currency devaluation. The U.S. dollar has been in a free-fall against other major world currencies since 2009.

You have to print money to make money. No one knows this better than the Federal Reserve. Since November 2008, the Federal Reserve has initiated three rounds of quantitative easing (QE) in an effort to create more economic activity and increase home prices.

What have three rounds of QE accomplished? It was supposed to increase lending, create more jobs, and lower the unemployment rate. Instead, banks are sitting on a pile of cash and remain tight-fisted, fewer jobs have been created, and the real unemployment rate remains high.

What QE has done is flood the global markets with trillions of U.S dollars. It’s not as if this new-found money is backed by gold. It’s simply created out of thin air.

What’s keeping the U.S. economy afloat? The Federal Reserve has artificially propped up the U.S. economy by buying a majority of the government debt issued by the Treasury department. As a result, the U.S. government has become dependent on borrowing (creating money) to finance itself.

At Profit Confidential, we expect the U.S. dollar to devaluate as the U.S. continues to pile on the debt. You can find regular commentary on the U.S. dollar in Profit Confidential.

What Canada/China’s Yuan Trade Deal Means for U.S. Dollar

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I, for one, do not expect to see the rally in the U.S. dollar sustained. I believe the U.S. dollar is currently rallying, because other parts in the global economy are doing worse than the U.S. While the U.S. do… Read More

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By Wednesday, October 29, 2014

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In the below chart, we quickly see that since March of 2014, production of the precious metal has been quickly declining. Meanwhile, on the … Read More

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By Friday, October 10, 2014

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In its most recent quarter, t… Read More

The Biggest Risk This Coming Earnings Season

By Friday, October 3, 2014

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Acuity Brands, Inc. (AYI) is in the business of making lights for indoor and outdoor applications. Based in Atlanta, it’s highly likely you’re already using this company’s pr… Read More