One of the subjects that we have discussed here at TOE has been monetary policy, interest rate differentials, and the performance of the US Dollar. As a memory refresher, we suggest you reread the article published on 22-September-2917 entitled "Quantitative Tightening and the Price of Risk Assets: Is there a trade in Gold?
In that article, we briefly discussed how global money flows were moving out of the US Dollar and into emerging markets where debt instruments pay a higher yield than those found in the developed markets. At the same time, we clarified our view on how the end of Quantitative Easing and the roll off of assets from the Fed's balance sheet would likely affect the price of risk assets.
