The Fed is compounding the shock by draining global dollar liquidity at a net annual rate of $2 trillion, that is, shifting almost overnight from $120 billion a month of dollar purchases QE assets to near-mirror (QT) asset sales.

The fierce tightening of the world’s superpower’s central bank has accelerated a parallel development: America’s astonishing rebirth as the world’s largest producer of oil and gas, a precious thing to be in an energy crisis of such magnitude. larger than that of the 1970s.

This pushed the dollar index to levels close to the Reagan dollar in the mid-1980s, when it was the pound’s turn to flirt with parity. (Britain was spared this indignity thanks to the timely intervention of the Sultan of Brunei, answering a call from Margaret Thatcher).

Yet there is still chatter about the end of dollar hegemony. Dream, my friends.

What is true is that the euro is not as strong as it could be given that the ECB is finally about to abandon its odious experiment with negative interest rates, which has been the nail in the coffin of the once vibrant German savings and cooperative banks, the backbone of the Mittelstand family businesses. A rate of 50 points is expected this summer.

Markets do not fully believe that the ECB is capable of carrying out its plan of a series of jerky rate hikes, or that it has the courage to end bond purchases once and for all, given that QE has long since metamorphosed into a debt shield against insolvent sovereign states.

They doubt that the ECB can devise a credible and legal “anti-fragmentation” tool to prevent Italian and Club Med risk spreads from spiraling out of control once there is no buyer of last resort for their debts forever. higher.

These doubts have crept into the currency, but keep in mind that the Japanese Yen is even weaker. The Swedish krona too.