The three most-used words since January 20, 1993? “New Clinton policy.”
Wonder why the dollar started falling last week, despite the Fed’s latest round of interest-rate hikes? Try House passage of the misbegotten crime bill, which to many domestic and international traders gave the appearance of new momentum for President Clinton’s domestic agenda. That is, if the final crime bill passed, then prospects would improve for a health-care bill. This would mean at least $250 billion per year in new taxes, thereby sharply reducing future U.S. economic growth and the after-tax rate of return on foreign capital invested here. Financial markets always take the latest available information in order to discount fixture events. Watch for a dollar rally if the crime bill is defeated in the Senate.
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