TIMING IS EVERYTHING

The best of our forecasters put the probability of a recession next year at around 65 per cent. Inflation is wiping out the value of the wage increases generated by a tight labor market. Joe Biden’s administration is on a spending spree that has sent the national debt over the $30 trillion mark, and rising, the forgiveness of student debt adding an estimated $400 billion-to-$1 trillion to the deficit. The dollar is so strong that companies with large piles of dollar-denominated IOUs might be unable to pay what they owe, while other countries have difficulty affording the dollars they must buy to pay for oil. In 1971, when a weak dollar was ravishing many countries’ export markets, Treasury Secretary John Connally told his international counterparts, “It’s our currency, but it’s your problem.” Just as true of the problems created by a strong dollar.