What I Learned This Week

The next breakdown in the U.S. dollar? "Never in history has one country owed so much to the rest of the world."

So wrote Joseph E. Gagnon in a post for the Peterson Institute for International Economics (piie.com) dated March 29, 2017. Gagnon, who previously served in senior positions at the U.S. Treasury Department and Federal Reserve, highlighted data from the U.S. Bureau of Economic Analysis (BEA), showing that U.S. liabilities to foreigners exceed its assets by about $8 trillion (the latest figures on the Net International Investment Position, or NIIP, are shown in the following charts). Russell Clark of Horseman Capital Management also weighed-in on the importance of the subject in his December 2017 letter: “Do changes in NIIP even matter? In my experience, they tend to be good signs of potential…

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