By www.ForexConspiracyReport.com

Can Trump’s Talk Reduce the

Value of the Dollar?

http://www.forexconspiracyreport.com/can-trump%E2%80%99s-talk-reduce-the-value-of-the-

dollar/

The new American president thinks

that the dollar is too strong.

http://www.forexconspiracyreport.com/can-trump%E2%80%99s-talk-reduce-the-value-of-the-

dollar/

He attacks China as well as Germany

for currency manipulation of the Yuan

on one hand and simply taking

advantage of a weak Euro on the

other.

http://www.forexconspiracyreport.com/can-trump%E2%80%99s-talk-reduce-the-value-of-the-

dollar/

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http://www.forexconspiracyreport.com/can-trump%E2%80%99s-talk-reduce-the-value-of-the-

dollar/

Trump wants a weaker dollar but if his

proposed economic stimulus policies

take hold they will cause inflation and

the Federal Reserve will jack up

interest rates.

http://www.forexconspiracyreport.com/can-trump%E2%80%99s-talk-reduce-the-value-of-the-

dollar/

And that will result in stronger dollar.

The only way we see a weaker dollar

is if Trump and his billionaire buddies

mess up, cause a trade war and

decimate the greenback.

http://www.forexconspiracyreport.com/can-trump%E2%80%99s-talk-reduce-the-value-of-the-

dollar/

NASDAQ writes about Trump vs. the

Fed and calls it a dollar dilemma.

http://www.forexconspiracyreport.com/can-trump%E2%80%99s-talk-reduce-the-value-of-the-

dollar/

Conventional wisdom to start 2017

was that reflationary policies by the

Trump administration would lift U.S.

yields and this would boost the U.S.

dollar.

http://www.forexconspiracyreport.com/can-trump%E2%80%99s-talk-reduce-the-value-of-the-

dollar/

Instead the year-to-date has frustrated

the conventional wisdom trades as

U.S. bond yields have been contained

and the dollar has struggled to build

upward momentum.

http://www.forexconspiracyreport.com/can-trump%E2%80%99s-talk-reduce-the-value-of-the-

dollar/

This has seen equities be the main

beneficiary of the reflation trade as

headwinds from a firmer dollar and

higher interest rates have so far not

materialized.

http://www.forexconspiracyreport.com/can-trump%E2%80%99s-talk-reduce-the-value-of-the-

dollar/

Reasons that the dollar has not

advanced more in 2017 include the

slowness of Trump’s economic

stimulus measures in arriving.

http://www.forexconspiracyreport.com/can-trump%E2%80%99s-talk-reduce-the-value-of-the-

dollar/

They also include his oft repeated

comments that the dollar is too strong.

http://www.forexconspiracyreport.com/can-trump%E2%80%99s-talk-reduce-the-value-of-the-

dollar/

The question is can Trump’s talk

reduce the value of the dollar over the

long term?

http://www.forexconspiracyreport.com/can-trump%E2%80%99s-talk-reduce-the-value-of-the-

dollar/

Central banks certainly know how to

signal their willingness to support a

currency to the extent that the market

reacts and they never need to act.

http://www.forexconspiracyreport.com/can-trump%E2%80%99s-talk-reduce-the-value-of-the-

dollar/

But in the case of Trump and supply

side economics the US will be awash

in cash if corporate cash returns from

offshore, tax breaks occur and a

trillion or so in infrastructure

improvements takes place.

http://www.forexconspiracyreport.com/can-trump%E2%80%99s-talk-reduce-the-value-of-the-

dollar/

That will certainly, in the near term,

jack up the economy, drive inflation

and raise interest rates.

http://www.forexconspiracyreport.com/can-trump%E2%80%99s-talk-reduce-the-value-of-the-

dollar/

The downside risk to the dollar

includes a total mess up and trade

war.

http://www.forexconspiracyreport.com/can-trump%E2%80%99s-talk-reduce-the-value-of-the-

dollar/

Inflation in the Wings

http://www.forexconspiracyreport.com/can-trump%E2%80%99s-talk-reduce-the-value-of-the-

dollar/

No matter what the President

thinks Fed confidence in inflation is

growing according to Bloomberg.

http://www.forexconspiracyreport.com/can-trump%E2%80%99s-talk-reduce-the-value-of-the-

dollar/

Policy discussions when the Federal

Reserve last met may show greater

confidence in the inflation outlook

http://www.forexconspiracyreport.com/can-trump%E2%80%99s-talk-reduce-the-value-of-the-

dollar/

and a debate over options for winding

down the U.S. central bank’s massive

bond portfolio, feeding discussions

over the timing of the next interest-

rate increase.

http://www.forexconspiracyreport.com/can-trump%E2%80%99s-talk-reduce-the-value-of-the-

dollar/

Thus an increase in interest rates is

waiting in the wings for the right data

and a Fed decision.

http://www.forexconspiracyreport.com/can-trump%E2%80%99s-talk-reduce-the-value-of-the-

dollar/

Because the dollar trades in the open

Forex market there is no ability to

reduce the value of the currency

unlike when the greenback was tied to

gold.

http://www.forexconspiracyreport.com/can-trump%E2%80%99s-talk-reduce-the-value-of-the-

dollar/

Our belief is that in the short term any

fiscal stimulus by the Trump

administration and Republican

congress will result in a spurt in

business and a continuation of the

Trump bump stock surge.

http://www.forexconspiracyreport.com/can-trump%E2%80%99s-talk-reduce-the-value-of-the-

dollar/

While investor may benefit in the short

term there is concern that over the

long haul supply side economics do

not work out that well.

http://www.forexconspiracyreport.com/can-trump%E2%80%99s-talk-reduce-the-value-of-the-

dollar/

Witness the 2008 market crash and

ensuing Great Recession.

http://www.forexconspiracyreport.com/can-trump%E2%80%99s-talk-reduce-the-value-of-the-

dollar/

That, in the end would be a way to

reduce the value of the dollar without

even saying a word.