To hunt game, you must first track it on the trail. The same is true for the offshore dollar.
- Here is an American consumer who buys an imported product. The domestic dollar turns wild.
- It emigrates and ends up abroad in the hands of the exporter.
- The exporter changes it into local currency at his central bank, and uses the proceeds to pay his employees.
- Then the central bank places its excess USD reserve in US bills or bonds.
- And our dollar flies back to the FED’s balance sheet. Game is caught.
Since 2014, we lost track of our wild dollar with increasing perplexity. Not by a single dollar, but a trillion dollars. In this letter, we show how wild dollars escaped from the FED trap and are now nesting on the high branches… of the US stock market!