Your Weekend Bit of Wall Street Wit & Wisdom

Currency icons

Currency icons: dollar, yen, pound, euro

“A government that inflates is therefore led to try to manipulate the foreign exchange rate. When it fails, it blames internal inflation on the decline in the exchange rate, instead of acknowledging that cause and effect run the other way.”
— Milton and Rose Friedman, Free to Choose

Changes in international currency exchange rates impact asset prices.  An example is oil priced in US dollars.  A weaker US dollar has an uplifting influence on oil.  A stronger US dollar may weigh on asset prices, making them more expensive to our overseas friends, who would buy with other currencies.

When sovereigns stick their nose in via “beggar-thy-neighbor” policy actions, economic risk is raised.

Central bankers are presently facing a daring balancing act, as they try to keep exchange rates under control and manage them to suit their propping purpose.

Keep an eye on exchange rate action for its impact on world markets and the global economy.

Warm wishes for a great weekend,


King Dollar’s Crown Wobbles

Brian Dykstra portraying King John

Photo by Teresa Wood, Brian Dykstra as King John, h/t

by Steven Sarnoff

As the stock market’s decline intensifies, one wonders what central bankers will do.  Will they coordinate to take down the US dollar?  Their objective would be to boost their balance sheets and pump out enough liquidity to prop up ailing share prices.

Will Treasury Secretary Munchkin Mnuchin again call the PTT (Plunge Protection Team)? Stocks are sliding hard.  It will likely take a sizeable sovereign effort to turn the state of the market.

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What’s Going On (In The Market Now)?


by Steven Sarnoff

The extended record-setting move up in the venerable S&P 500 is making any self-respecting seller “wanna holler and throw up both my hands,” and many of the weaker shorts are capitulating.  This has my contrarian senses tingling.

Let’s have a look at what’s going on in three important markets, stocks, interest rates, and the US dollar.

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