Off the Cuff: When the Wheels Will Come Off

In this week's Off the Cuff podcast, Chris and Charles discuss:

• The (Dire) State of the Union
  • The money for the Administration's grand vision just doesn't exist
• The Housing Market
  • Bubble pricing returning to several markets
• Currency wars
  • Why the dollar will likely strengthen further from here
• The Next Correction
  • Here by summer?

Chris and Charles begin by shaking their heads at the grandiose plans laid out during the State of the Union address. Not because the vision isn't appealing; but because it's just not based in reality. We simply do not have the resources to implement a fraction of what is being promised.

And what bothers them is that the "successes" being touted — like rising stock prices — are simply the mathematical result of flooding markets with trillions in newly-printed money. That's not an accomplishment to be proud of.

But since such money printing is being pursued worldwide, as major countries seek to defend their export markets and reduce the pain of servicing their debts, a global currency war is ramping up. That, plus the impact of Triffin's Dilemma, will very likely cause the U.S. dollar to strengthen in the near term (i.e., the next few years) even though the fundamentals backing the USD continue to deteriorate.