Odd Lots

Why the US Dollar Is Booming And Creating A Possible Doom Loop

Jul 18, 2022

Jon Turek, founder of JST Advisors and author of the Cheap Convexity blog, dives into the strength of the U.S. dollar amid global crises. He discusses how the dollar is hitting a 20-year high against the euro and the yen, raising concerns about a looming recession. Turek explains the 'doom loop' that strengthens the dollar while stifling economic growth. He also touches on the adaptive strategies of central banks, particularly in Europe and Japan, highlighting the complex landscape of global macroeconomics and currency dynamics.

46:33

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Episode guests

Jon Turek

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Episode notes

Intro

2min

The Strength of the Dollar Amid Crisis

21min

Evolving Monetary Policy and Trading Dynamics in Europe

2min

Central Banks in Tightening Mode

9min

Analyzing the Bank of Japan's Easing Policy amidst Inflation Pressures

4min

The Doom Loop of the Dollar

10min

Economic Privilege and Central Bank Challenges

2min

Every time a crisis hits, you get a new round of people warning about the end of US dollar dominance. The Covid crisis and its aftermath is no exception. It may be that the world will change over the long run in some way that does help to dislodge the greenback. But in the meantime, concerns about a looming recession mean that the dollar is booming against other currencies. It's at a 20-year high against the euro, and it's soared against the yen as well. So why has the dollar been rising? And what is the impact of that on the world economy? On this episode, we speak with Jon Turek, the founder of JST Advisors, and the author of the Cheap Convexity Blog, about why the dollar's been so strong, and the risk of a potential "doom loop" that will drag down the global economy.

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