Rabobank: A Broad US Dollar Shortage Would Erupt If There Is A New Trade War With China


Submitted by Michael Every of Rabobank
Hand A, Hand B, Handout
Yesterday saw Fed Chair Powell in the spotlight, and he had a few key things to say. First, things are looking grim for the economy. Rather than merely cheer-leading that H2 and 2021 were going to see a V-shaped US recovery he stated “the path ahead is both highly uncertain and subject to significant downside risks.”
The UN would agree, with what looks like a vast underestimate that 130m people may slip into poverty globally in the wake of the virus: we could actually see that happening in just one or two large economies if things aren’t handled right. Even Australia just saw a jobs number of -594K, even worse than expected, and the US equivalent of nearly 8 million. (The wunderkind at the ABS did manage to replicate their usual monthly statistical bafflement, however, in showing that the unemployment rate only rose from 5.2% to 6.2% vs. 8.2% expected. *Sigh*.)

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