Tuesday, February 3, 2015

Coming To America!

Drawing Money Like A Magnet
When doing a computer search of "Coming To America" two choices leap from the page. The first, Coming to America is a 1988 American romantic comedy film directed by John Landis. It is based on a story originally created and stared in by Eddie Murphy. The second,  "America" (also known as "They're Coming to America" or "Coming to America") is the name of a patriotic song written and recorded by Neil Diamond.  Today much more is coming to America and that is money and wealth from all over the world.

While America has been described recently as the cleanest dirty shirt in the closet, or the best house in a bad neighborhood, both place it as the least worse option. The reality is other options fail to pass the smell test. This means what is coming to America is wealth and money seeking a "safer" place to take refuge from the coming storm. Today America has become a money magnet, Lady Liberty the symbol of America that stands in the harbor of New York while a bit tarnished is still giving people hope even if Washington is not overwhelming us with the same glowing feeling.

The money coming into America is flowing into both bonds and stocks. This supports lower interest rates and drives the stock market ever higher. Do not underestimate the power of cross border money traveling into the country as a driving economic force. Another thing you should not underestimate is the advantage our currency has because of its role as the world reserve currency. This makes it the "default currency" and by the size of its market, float, and liquidity the currency by which all others are weighed, measured, and often pegged. The chickens are coming home to roost for countries that face growing debt and policies that make them uncompetitive. Some of these countries are increasing looking at ways to confiscate the wealth of their citizens, it is only logical these people would move their money to a safer place.

Countries can steal wealth by way of various Trojan horse methods such as monetizing debt through printing massive amounts of new currency or new taxes. As people all over the world try to get out of their home currencies a surge in the value of the dollar is logical. In the end this will not be the salvation of America or its economy but it sure does help create a bit of a lift that we would be wise to take advantage of. As things turn ugly across the world it is only expected that as in Neil Diamonds patriotic song the wealth of the world like its people just wants to be free. Like the people he sings about it seems wealth also appears to have legs and as the people, everywhere around the world the money is coming to America! Yes, it is coming to America, today, today!

Footnote; For fun if you haven' heard if in a while the link for the song "Coming To America" is below. It comes complete with some very good visuals, enjoy.

Footnote #2;  If you look close you will see the currency markets are beginning to reflect diminished confidence in the system central banks have created. As the currency games continue to ratchet ever higher it is becoming more apparent that we are standing on shifting sand. The schemes bankers have used for years to hide and transfer debt are coming under attack, if they crumble under the assault it will culminate in a reset of the economic system across the globe. The important article below explores what we might  face in the next round as these dangerous games continue.

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