Report Detail Summary

What Makes the Dollar Tick: The Terms of Trade?

November 10, 2019

We present data suggesting a link between fiscal policy and other potential sources of real economic disturbances and the terms of trade. It documents the long-lasting real exchange rate cycle coinciding with the long relative returns cycles. The data also suggests that when the current dollar appreciation peaks and turns, there will be a long-lasting prolonged dollar decline. During that time international investing will outperform domestic investing. If the past is a guide, the mean reversion in the data points to several years of international outperformance and terms of trade decline.

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The ValueTiming™ strategy is based on the assumption that politicians and policymakers have particular views of the world, and that they will in general adopt policy measures that are consistent with these views.


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