A Global Eurodollar Shortage

The World Bank just released a telling report entitled “Trade Developments in 2016: Policy Uncertainty Weighs on World Trade“. Though they deflect the problems in global trade to areas such as excessive regulatory initiatives and policy uncertainty (which is true), what is to be found buried in the appendix are the two un-annotated charts below. I suspect the World Bank didn’t compare them directly (they are shown separately) because it would cast a spotlight on an even larger political ‘football’.
How does global trade ship ~10% more trade volume but receive ~12% less revenue over a 5 year period? The answer has traditionally been significant improvements in productivity. However, the productivity numbers by country don’t even come close to supporting such a premise.
We believe the actual answer is that a strong US dollar is choking global profits and wealth creation because of a dollar shortage and a lack of real global economic growth! It went “critical” when ‘TAPER’ ended. You can see this inflection point in an endless array of economic charts.

This post was published at GoldSeek on 27 February 2017.