Where has the Outflows from the US$ Gone for the Past Year?

QUESTION: Re: Am i certain about the Strong Dollar?

Hi Marty, great blog posts and response. I think after reading this blog posts, the question on everyone’s mind is, what is causing the outflow of capital from the USD? And where is capital concentrating in right now? Is it the Euro? The Bunds? Gold?
And when do you see the outflow will stop and reverse?
Thank you
Regards
Rm
ANSWER: There has been outflows to Emerging Market debt by pension funds in the States for the past year. They have been trying to compensate for the lower interest rate returns by going more risky. We have been call on this issue more than once.
Then there has been the expectation that the ECB will end QE and Europe will boom. We can see that the DAX for the past year has risen in dollar terms. We have seen a tremendous outflow into the European share markets, but not so much into the debt issues.
Gold has been minimal because that is the retail side, not a target for institutional money. They need income, not storage fees. They will participate in gold stocks, but not stockpile bullion.

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