No. of Recommendations: 3
paulkrugman.substack.com - Gaming out a sudden stopIt is an interesting read. He touches on the trade deficit, the capital inflows from international investors, and net domestic/international investment rates. Then changes in in those trends and the impact it would have on interest rates and the economy.
He leads off with Dornbusch's Law, which feels apt to repeat here:
The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought.I have been heavy in USD awaiting a buying opportunity, and I'm having second thoughts. I wonder how many others are in the same position, and how they might react, and where that capital would flow. It is a bad situation, the 30 year treasury chart speaks for itself.
