The economist Paul Brodsky of market analysis firm Macro-Allocation Inc. in Tampa, Florida, writes this week that the Federal Reserve is strengthening the dollar, despite its deflationary influence, so that the central bank can draw more capital to U.S. banks and asset markets in preparation for hyperinflation and a worldwide monetary reset, which the Fed will be more able to control if more wealth is held in dollars and assets denominated in dollars.
In a paper headlined "It's the Dollar, Stupid!," posted tonight at Zero Hedge, Brodsky writes:
"This is not the first time the Fed has had to actively increase the exchange value of the dollar. Paul Volcker's Fed had to hike overnight rates to 20 percent in 1980-81 so the dollar would be reaffirmed as a store of global value for U.S. trading partners, including OPEC.
"We believe the Fed is doing the same today, in spite of its de-stimulative impact, because it wants to attract global capital to U.S. banks and asset markets. Doing so would ensure U.S. dollar hegemony, which would be necessary if and when global leverage leads to hyperinflation and multilateral trade and currency wars.
"Once substantial wealth is held in dollars and dollar-denominated assets, the U.S. political dimension and the Fed, through the Bank for International Settlements and International Monetary Fund, would be able to control the terms of a global monetary reset, which in turn would de-leverage balance sheets across currencies and economies in a controlled manner -- in effect, a pre-packaged bankruptcy in real terms."
Brodsky's paper is posted at Zero Hedge here:
http://www.zerohedge.com/news/2016-12-28/its-dollar-stupid
