How did we know about the USD supply shortage?
Well, we just need to look at the USD Libor. USD Libor is at an all time 5-year high now according to the chart above.
USD Libor is the bank rate that the banks in London set for lending USD among themselves and this rate has been trending much higher in 2018 which denotes that there is a supply shortage. Therefore, this means that USD will continue to appreciate due to the higher rates and supply shortage because of QE tapering.
1 comment:
http://sg-stock.blogspot.com/2018/09/a-roundup-of-us-economic-situation.html
The USA is flushed with USD but the world is short of USD.
This is a conundrum caused by the US policies because the US wants to keep the excess USD in the US due to QE tapering.
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