US Dollar Has Entered Its Next Multi-Year Bear Cycle
Updated
We are only 1 or 2 years away from another full-blown global competition for currency devaluation.
The next crisis will NOT be like 2008. In 2008 we began the crisis with the US Dollar Index (DXY) at an all-time record low and the crisis caused a flood into the dollar. Where we are now is much more similar to 2000: High dollar, high stock market, quiet commodities market, incoming easy money policies.
Additionally, the Fed is acting very preemptively. They will not wait until recession is blatant before they take action (like in 2008), they're already doing QE4, which means if the economy turns lower even more ---> they will launch an official and permanent asset purchasing program in order to keep rates low.
We are at the beginning of the end game now: Which is a global race to devalue the currency in order to keep asset prices up and to enable insolvent governments to continue to print and borrow. The global banking system will soon need massive central bank interventions, bigger than anything we've seen before. Look for a new all-time low in the DXY below 70 to be set before the mid-2020s.
The next crisis will NOT be like 2008. In 2008 we began the crisis with the US Dollar Index (DXY) at an all-time record low and the crisis caused a flood into the dollar. Where we are now is much more similar to 2000: High dollar, high stock market, quiet commodities market, incoming easy money policies.
Additionally, the Fed is acting very preemptively. They will not wait until recession is blatant before they take action (like in 2008), they're already doing QE4, which means if the economy turns lower even more ---> they will launch an official and permanent asset purchasing program in order to keep rates low.
We are at the beginning of the end game now: Which is a global race to devalue the currency in order to keep asset prices up and to enable insolvent governments to continue to print and borrow. The global banking system will soon need massive central bank interventions, bigger than anything we've seen before. Look for a new all-time low in the DXY below 70 to be set before the mid-2020s.
Trade active
I believe 103.87 achieved in December 2016 was the top of this long-term cycle. Lets watch and seeTrade active
The dollar should experience some strong overhead resistance. Lots of space down below. I don't think DXY will make it above 99 or 100. Note
^wrong chart. Here we go - Note
Note
next round of weakness should be coming in the next few weeksNote
I still believe 100 will not be surpassed.....Corona Virus may have something to say about thatNote
My fundamental thesis has changed. Much of the above I still believe is correct long-term. But for 2020 I think there exists great risk of a mega dollar spike, which would be very painful for stock markets and particularly emerging markets. In the short-term (2-7 months) I'm dollar bullish
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