The US-Dollar-Index, a currency basket composed of 57%EUro, 14% jap.YEN, 12% British Pound, 9% Canada.Dollar and 4%Swedish krona and Swiss francs, is expected to continue up over the next few years. What this means to the most people of the world, I would like to summarize this briefly.
The US-dollar is the world's largest and most liquid market for bonds and equities. Therefore, this market is basically the number 1 of Safe Haven- for global economic turmoil. Since the financial crisis of 2008, the index has started to rise and since the beginning of 2018 the index has left the correction phase (bracketed iv), which has been ongoing since March 2015. The flare-ups of the trouble spots in the emerging markets (Turkey, Tunisia, Argentina, China, India, ...) as well as the uncertainty in the EUro-area are therefore leading to accelerated capital flight and, as a result, many emerging economies and companies Markets that are indebted in US-dollars, have great problems or to get.
Why?
Capital flight always means a devaluation of the domestic currency against the dollar and thus the debt-equity ratio of dollar loans increases. Many states and companies can then no longer repay their debts, this leads to failure of these loans. Since many European banks and insurance companies are involved in these loans, their equity base is lost and thus the-EUro also loses against the US-dollar, especially since interest rates on bonds are paid in the US, while interest rates have to be paid to the ECB for "parking of money". Truly hard tobacco that awaits us all and probably can only be solved with a new world monetary system, because the majority will certainly want no depression as in the 30s of the last century.
Can career politicians act proactively if it is for the good of the people? I do not think, so everyone has to take their own precautions!