The Euro Crashes To 12 Year Lows And Now The US Commerce Secretary Starts To Grumble About A Strong Dollar

Tyler Durden's picture

A crashing Yen failed to help Japan or fix its economy, but while Japan may now be a lost cause, the Keynesian masterminds of the world will give it another try, and following today's Draghi's announcement, the EURUSD has crashed to the lowest level since 2003, tumbling over 200 pips, and printing below 1.14 moments ago.


And since it is a zero-trade sum world, now that the exports of Europe - the single largest economic block in the world - are cheap enough to compete with Japan's just as cheap, thanks to currency debasement, goods and services in the global arena, it means that the biggest loser is obvious: the United States, whose currency has soared to nosebleed levels on expectations that the Fed will hike and that the US will somehow decouple from a world that is drowning in economic malaise.

However, in a clear indication that the party for the USD-bulls may be ending, none other than the US commerce secretary moments ago said the impact of a rising dollar on exports and economic growth bears monitoring.

According to Bloomberg, asked at the World Economic Forum’s annual meeting in Davos, Switzerland, whether a climbing greenback could drag down U.S. trade and economic expansion, Pritzker said “it’s a factor and something to keep an eye on.”

Pritzker said the challenge was to ensure U.S. businesses could be innovative and productive enough to attract demand regardless of the vagaries of currencies or the world economy.

Yes: it is a challenge when increasingly troubled importers could care less about innovation when the only thing that matters is the local currency denominated bottom line.

And this is something Pritzker knows too well. So the question is - how long until she speaks to none other than Jack Lew, who in turn convews a message to Janet Yellen, forcing her to "patiently" remind the market that the US never has, and never will, decouple from the rest of the world, and that unless the US wants to go straight from 5% Obamacare-boosted "growth" to recession, it too will have to join the devaluation party.

Lastly, considering the everyone is now long the dollar, the macro devastation that would result if the Fed also pulls an SNB and surprises the market, will be one for the generations.

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bigdumbnugly's picture

However, in a clear indication that the party for the USD-bulls may be ending, none other than the US commerce secretary moments ago said the impact of a rising dollar on exports and economic growth bears monitoring.



lol, "bears monitoring."

Publicus's picture


kliguy38's picture

Tooo fkn funny....this is a total clown act ..........Queue Joe Kiernen licking another bankers boot

MalteseFalcon's picture

Strong $??

No problem.


Raise interest rates!!

MisterMousePotato's picture

Interesting - the size of this thing; to wit: Print a trillion Euros (a Trillion!), and things change by just a couple cents. Although I understand this adds up over time, still ... just doesn't seem very significant. I mean, does it really (really) make a difference if gas is $1.99 a gallon instead of $1.97?

Max Hunter's picture

yes, it makes a huge difference. Imaging you are a distributor that buys in Euros and sells in USD.  You have a project payment due for 400k Euros.  The project was started 4 months ago.  You are now 40k+ richer.  I know.. I use to do this.. I was usually taking hits in the other direction. I usually only gave myself about a 5% buffer before my margin started taking a hit.  When it went in my favor, paydays got big.

TheRideNeverEnds's picture

IF they dont like the /DX @ 94.5 they are gonna hate it @ 160!



Headbanger's picture

Go ahead... Weaken the Dollah.. I dare ya..

Cause China will dump it in a heartbeat and then good luck selling US Treasuries again!

Bell's 2 hearted's picture

you got it backwards

china will be forced to dump peg if usd continues to STRENGTHEN

china's exports are being priced out of the competition

insanelysane's picture

hi ho the derry-o, a printing we must go!

lordylord's picture

Wouldn't a strong dollar buy more Chinese shit?  When did the US start exporting stuff?

Duude's picture

They already dumped the 'peg'.  Its not like they were going to make an official announcement.

Sudden Debt's picture

American car makers will also get a serious hit.

Maybe time to put some skin into it and buy a put on ford and gm

Sudden Debt's picture

To weaken the dollar back to 1.35 to the euro they need a QE4 of 2 to 3 trillion... the pase of printing just keeps getting bigger and bigger.

I bet the US will go all in before may

Stanley Kubrick's picture

Here in the U.S., today's incremental rise in the price of gold/silver is masked by today's USD strengthening.  Otherwise, it would be twice as large as it is.

Come May, when the FED's next round of QE is announced, the PM's should soar (in USD, that is). 

If the 'fix' isn't in, of course.....cough cough....ahem.

takeaction's picture

cool video..Thanks for that.

Farmer Joe in Brooklyn's picture

Video is a good analogy.  We are at that point very shortly before the explosion.  No telling for sure when... until.... BOOM!!!!

ejmoosa's picture

Our new Motto:  We print more, because it's worth more....

SDShack's picture

Currency Limbo - Race to the Bottom. Next Contestent - How Low Can You Go?

indygo55's picture

What is the Euro in gold?

Sudden Debt's picture

Bullion is over 17% higher and deliverytime is over 3 weeks besides the numis gold but those are even more expensive.

I’m waiting now already for 4 weeks after my silver over here...

but my german and french orders did already arrive.


ZH Snob's picture

have no fear, mr prick, the strong dollar problem will resolve itself, never to return again.

Dr. Richard Head's picture

What an upsidedown, backwards, cluster-fuck of a world we have where a strong currency is frowned upon.  Orwelian double talk for sure.  

Fuck this place, this is bullshit, I'm outta here - Me.

KnuckleDragger-X's picture

Everything is just peachy here on the sun deck of the Titanic......

wmbz's picture

Yep, the music is dreamy and the Martinis are very dry...

Wait...What the hell was that noise? Did we hit something?

Naw, keep dancing.

buzzsaw99's picture

vagaries? vagaries my ass.

joego1's picture

If you don't like a strong dollar just wait a while. Old Yeller has a bone buried for that problem.

Sudden Debt's picture

Actually, a strong dollar like this will destroy the tourisme from europe.

America is now almost 20% more expensive and just as the west america trips where getting very popular in europe.

And for a lot of small towns in west America, tourisme is all they have!

disabledvet's picture

Meh. Whiny industrialists.  Do they come any other way?  First they get free energy, then they get free gold...and now they want a worthless dollar.


Oh, wait.  That's Kelly Pritzker.  She's in the media business.  "Got a media empire to unload.". You would think she would want a STRONG dollar to do that.  Very confusing.

Last of the Middle Class's picture

High oil prices are horrible for the poor consumer who will just go buy fuel inefficient autos, he must be protected, and of course the strong dollar is just as bad, we have to make our goods and services cheaper for the world market. Race to the bottom it is. As Yoda would say. Bullshit and economics go hand in had, and can only be spearated with hot lead. 

slaughterer's picture

Europeans, you are all being led to the ECB slaughterhouse where your EUROs no longer buy anything.   Leave your gold at the door before you are zapped in the head by the man with the resemblance to Count Dracula.  

SDShack's picture

Yep, I've been saying it for years. Europe is just the USSA bitch. Fully confirmed when Belgium was caught buying UST en masse. When push comes to shove, Europe will be sacrificed by the USSA FED, just like Japan has been. The USSA FED is run by the biggest sociopaths in the world and will sacrifice everything and everyone else to remain on top, even if its only an illusion in their sick minds.

MarketAnarchist's picture

Remember, when it happens, Peter Schiff has been calling for the dollar collapse for 3 years.

malek's picture

Don't downplay this. He has been calling for a dollar collapse since at least 2008.

Winston Churchill's picture

Its a process, like jumping from the 100th floor.

Terminal velocity has been achieved, and we are  just waiting on the sudden stop.

disabledvet's picture

No I am not going long the British Pound either.


The EZ is a TRADING BLOC.  All of their business is internal.  How this relates to the value of the dollar in any way is beyond me.

At least Britain is a Commonwealth...and would appear to be a better one than the Russian variant.

Ghordius's picture

"The EZ is a TRADING BLOC.  All of their business is internal " more like roughly 50%, actually

FIAT CON's picture

This  "Fiat collapse" is like being at at party and guessing when the drunk guy finally falls down. You are all suprised he lasted as long as he did before he finially fell.

monopoly's picture

Euro trading more like a stock than a currency. Don't know when this monetary disaster will begin, but begin it will. Tick Tock!

Disc Jockey's picture

I think most currencies these days are trading much like a bet against one country or another. The weak Euro is merely the sign that the people are starting to stop believing in the if only "Americans" could do the same.

earnulf's picture

When everyone finally realizes that the full faith and credit of the US Dollar is just more smoke and mirrors and is backed by nada, maybe then everyone will realize how conned they have been.

FIAT CON's picture

Most of the people will refuse to believe right until the last second. Then they will look around the room at each other and say "What just happened"?

madcows's picture

is this a soft announcement of QE4?

malek's picture

 if the Fed also pulls an SNB

Help me here:
How would that even be imaginable? By the Fed announcing it will "cap" the US Dollar at 40 RUB and 5 CNY?

i_call_you_my_base's picture

More great news for US wages.

buzzsaw99's picture

Yuan devaluation in 3, 2, 1...

Bang Dae-Ho

ThroxxOfVron's picture

" US commerce secretary moments ago said the impact of a rising dollar on exports and economic growth bears monitoring. "