Watch the Dollar: It Could Trigger the Next Crisis!

• I do not believe in the premise of this article! The US economy is not recovering. QE will not end because the real intention is for the FedRes to help its shareholders ie. the global Illuminist banks! It will lead to hyper-inflation and eventually the FedRes will have to raise interest rates. Yes the dollar will collapse! The Illuminists are not ready to pull the plug on the dollar at the moment. However, other countries, the BRICS, Asian Tigers … may decide they have had enough for this BS Monopoly money!
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  Watch the Dollar: It Could Trigger the Next Crisis! 
  by Ansuya Harjani, http://www.cnbc.com/ 
  Expectations of an end to ultra-easy U.S. monetary policy are likely to set in during the second-half of 2013, triggering a bull run in the dollar that could last for five years, says independent economist Andy Xie. And this, he argues, could lead to a “crisis” in emerging markets as hot money inflows unwind.
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  The U.S. economy has begun to show signs of life again – with factory activity touching a nine-month high in January – prompting talks about an end to the Federal Reserve’s quantitative easing program.
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  Xie forecasts the dollar index – which measures the performance of the greenback against a basket of currencies – will rise to 100 in the next three years, a 25 percent rise from current levels around 80 on relative strength in the world’s largest economy.
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  “The dollar bull market tends to trigger crises in emerging economies.  This time is likely to be the same,” the former Morgan Stanley economist said, citing the Latin American debt crisis in the 1980s and the Asian Financial Crisis in 1997, during which a rise in the U.S. dollar against local currencies led to a spike in interest payments on external debt.
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  “During the last ten year’s dollar bear market, massive amount of hot money flowed into emerging economies, causing currency appreciation, asset bubbles.(But) when the dollar turns the direction, so does the liquidity. The virtuous cycle on the way up becomes a vicious one on the way down,” he added.
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  (Read More: Flee ‘Safe’ Sovereign Debt, Says Hasenstab)
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  In the dollar bear market of the past decade, the BRIC (Brazil, Russia, India, China) countries have been the “darlings” of international speculative capital, making the them most vulnerable, according to the well-known economist. He did not provide targets for the BRIC currencies.
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  He said Brazil and India are most at risk among the BRIC countries because their capital markets are most open to foreign investment.
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  read more!

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