China Is Buying the Chicago Stock Exchange. A Dangerous Signal for the Global Economy

Capital flight or capitol fight: Why is so much money fleeing China, and what is the biggest ramification?

An obscure Chinese company is buying the Chicago Stock Exchange. The February 5 announcement stirred a tumult on Capitol Hill. Members of both parties of Congress denounced the takeover, calling for the Treasury Department to investigate the proposed sale.

Yet the founder of the Chongqing Casin Enterprise Group (Casin Group), which is buying the Chicago Exchange, assured regulators that his intentions were purely financial in nature. He planned on keeping the United States management team in place and said he would use information learned from the Chicago Exchange “to help develop financial markets in China over the longer term and to bring exciting Chinese growth companies to U.S. investors.”

So what’s the problem?

Are the dollar’s carry trade days numbered?

The video unfortunately cannot be posted here due to compatibility issues, but can be found in the link to the source, if interested.

Traders borrowing U.S. dollars to fund investments in other currencies should beware, with analysts expecting the greenback to strengthen and advising a shift to borrowing the euro instead.

“U.S. rates and the U.S. dollar may get a pop from an expected jump in April inflation,” Barclays said Monday in a note titled “Carry on, but don’t fund with USDs.”

Over the medium term, Barclays expects the U.S. inflation risks are to the upside, making it likely the greenback will continue to strengthen. Barclays expects the U.S. dollar index (DXY) to rise 5 percent by year end, with a 7.3 percent rise over 12 months.