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Deflation

I know what gold is doingI'm a gold bug I went long last year to catch the move to ath The moves since then have been somewhat perplexing in an 'inflationary environment' As followers will know i believe inflation is indeed transitory In this chart we are looking at GOLD pa but comparing with two inflation markers: breakeven inflation and inflation protected bonds You can see gold generally moves with these And i believe gold has stalled because inflation has peaked The geometry on the gold chart shown here means we will revisit circa 1500 for gold in a deflationary move It's a buy when it breaks the falling wedge upwards OR if you have retrace targets I could see gold as low as 1k but then the bull move is lost, i'd see a wick to 1300 range then resume the bull move Gold will do well with negative rates and further qe In the end we get true inflation but this isn't it imho GRI 2022 NOT TRADING ADVICE
TVC:GOLD
by Great_Reset_Investing
3
The great INFLATION debateChart: action reaction chart off major pivots Here we are looking at breakeven inflation and inflation protected securities People buying inflation hedges (including gold) are getting rekt ****************************************************************************************************************************** I used to believe in hyperinflation and a dollar reset too But this isn't going to happen (yet) For nigh on 40 years, economic growth per capita (nominal AND inflation-adjusted real) has been in a downtrend. This coincides with the 40 year bull market in long term government bonds. For around a quarter-century: the GDP generated /dollar of the money supply has fallen; and this demise is accelerating. The velocity of money ( M2V ) has crashed post-pandemic, and it is at a 100 year low; this is not consistent with persistent inflation /hyperinflation. The money multiplier is falling because banks can't lend productively, and are parking cash at the Federal Reserve . MRDP (marginal revenue product of the debt) is at an all-time low: currently around $0.25 of GDP per dollar of debt. The dollar itself stays strong because the rest of the world is even more indebted and less productive (with lower MRDPs). Demographics and Debt will both continue to subsume growth, with the EU especially affected by demographics. Markets are in a bubble because we are at peak debt and peak growth. As soon as reality bites: equities will be the first to suffer. The dollar will just get stronger mid term. G.R.I. Dec 2021 With thanks to Lacy Hunt (Hoisington) and Eric Basmajian (EPB Research) for all their work on the above NOTE: the views expressed above are my own, AND MUST NOT BE CONSTRUED AS ANY FORM OF ADVICE
FRED:T10YIE
by Great_Reset_Investing
Hard assets are the way forwardWith the money printer going BRRRR (costing $4T from the fed) causing stock prices to be inflated, investors and money managers in the stock market may soon take profits into hard assets that aren't necessarily tied to the value of the dollar, like housing, cryptocurrencies, gold, etc. in order to preserve the wealth that may otherwise be lost due to continued inflation. This could explain why BlackRock and Palantir have bought Real Estate and Gold at large respectively throughout the year. Note, cryptocurrencies are at risk of going down with equities if the market doesn't consider it as a commodity. The coming months maybe even weeks will reveal as to whether it matches or disassociates correlation with the stock market as the SPX/CPIAUCSL chart reaches its 1.618 fib extension from the 2000 dot com highs to the 2008 lows, and the Dow theory continues to play out. Perhaps all this money printing was done to usher in a Great Reset of economics; to meet the expected productivity from the innovations of the 4th industrial revolution? offset panic from retirees? encourage the youth to invest and adopt crypto as an inflation hedge? Will a crash come? Maybe, maybe not, but I think if it were to happen, the $ may be transferred to blockchain tech as it serves as a commodity with major innovative growth potential to digitize most businesses and services to make them ESG compliant . Overall, stagflation will likely occur in response to the fed attempting to delay the retirement and debt crisis as long as possible, ongoing high unemployment (workers incentivized to collect UI as it pays more than min. wage), and possible future low economic growth (as a result of goods being unable to be transported due to COVID-19). One could argue that deflation is more likely to occur if innovations in blockchain technology spread outside of Finance and into other areas such as supply chain automation, insurance, identity, etc, allowing productivity to match or even outpace the supply of money. But such progress has yet to have been either made or discovered depending on the respective industry, let alone hesitancy of adoption due to BTC's perceived low ESG score.
SP:SPGSCILong
by linebands
Oil is about to crash. Divergence. Inflation near its end.Oil is its last stand. Dollar is on its rescue from devaluation the currency. No hyperinflation is modern time. FED bank have printed and push not just oil to record levels from minus prices. Lumber to stellar levels with copper. Commodity sector is very overpriced over all because of the inflation thats been going on since 2017 and zero rate for 10 years. We are in Inflation to Deflation status for now. next move is to resurrect the dollar is to midpoint and probably highs again like in 2020 like 97-105 dollars. With that in mind, everything is going down with the next move. Dollar and VIX and bonds will go up when investors and bankster will go into cash and more secure products. 35 dollar in WTI is most likley in the near future. prev: There too many factor playing out and 2021 the Q3-4. Printing more and more money to stabilize market. Wont last. Too much devaluation of dollar would risk more to the ecnonomy. Money would become worthless and it will never be a hyperinflation again. Dollar is already hovering around lows but still building upwards. As we seen in 2020 the dollar spike hard at crash of all the bond buying and selling of stocks. In the greatest Pandamic of all time is the best year for big companies and worst for smaller ones. I proves big things are gonna come very soon. If you look at all the insider trasaction of 2021 you can see Walmart, Facebook , Amazon, Google , Netflix and many more of the biggest shareholders selling of big profits. Some every day and some every week. Tells they have fear and retail person have no clue. Time to call this move. The banksters did a massive move from highs with above 20% move to the upside to liquidate retails marginal calls. Prices of Lumber sored most in history and crash this summer to its lows again. We had minus price in WTI and almost 80 in WTI after its lows. Big things is going down and it will get a lost worse. Unemployment is still at its highs, what will happend when savings account and stockmarket will fail. 10x the 2008 is coming. By just looking at the FED system and the debt. We know. By looking at insider trasaction. We know. By looking at technicals are all levels we are going to have a big Deflation/Recession to stabilize the currency of domination and reset the economy to whats needed. Exit the market or do you placements. But dont get greedy for more upside.
TVC:USOILShort
by PivotX
The target no one believes. NASDAQ There too many factor playing out and 2021 the Q3-4. Printing more and more money to stabilize market. Wont last. Too much devaluation of dollar would risk more to the ecnonomy. Money would become worthless and it will never be a hyperinflation again. Dollar is already hovering around lows but still building upwards. As we seen in 2020 the dollar spike hard at crash of all the bond buying and selling of stocks. In the greatest Pandamic of all time is the best year for big companies and worst for smaller ones. I proves big things are gonna come very soon. If you look at all the insider trasaction of 2021 you can see Walmart, Facebook , Amazon, Google , Netflix and many more of the biggest shareholders selling of big profits. Some every day and some every week. Tells they have fear and retail person have no clue. Time to call this move. The banksters did a massive move from highs with above 20% move to the upside to liquidate retails marginal calls. Prices of Lumber sored most in history and crash this summer to its lows again. We had minus price in WTI and almost 80 in WTI after its lows. Big things is going down and it will get a lost worse. Unemployment is still at its highs, what will happend when savings account and stockmarket will fail. 10x the 2008 is coming. By just looking at the FED system and the debt. We know. By looking at insider trasaction. We know. By looking at technicals are all levels we are going to have a big Deflation/Recession to stabilize the currency of domination and reset the economy to whats needed. Exit the market or do you placements. But dont get greedy for more upside.
OANDA:NAS100USDShort
by PivotX
Deflation, Hyperinflation, and You; Work In ProgressDisclaimer This is a work in progress series for a much longer form article I am writing (perhaps a bit academic in nature). I am working out several key concepts, making the arguments to myself back and forth, and teasing the waters hoping for some conflicting data (open-market criticism). To this end, I present a contrarian economic concept that might help in the coming times: Deflation; the Myth, the legend Deflation isn't real. Defining deflation as the cost of living decreasing, and utilizing CPI, a metric for the cost of living, deflation is entirely and unanimously thrown away. In fact, the only period where cost of living stands relatively still in modern times is post-2008 crash when real estate as a whole blew up, significantly reducing the CPI, while the inflation on all other goods and services increased dramatically. The M1 money supply is the amount of money within cash and savings accounts, and the amount of cash in circulation. I consider this the workers economy. Small savings accounts are the most likely to get raided in the event of an economic incident, while cash and credit accounts are fluid and change hands constantly, this concept being the velocity of money. The M2 money supply is the amount of money within M1 + savings accounts under 100k + money markets (active investments). I call this the working economy as a lot of small businesses get lumped in, as well as the working capital of larger corporations. The M3 money supply is all of the money. Every notational of value within the confines of the economy of the United States. The CPI and M1 stay fairly close to each other in olden times of more conservative economic policy. By limiting the growth of the system, you limit the ability for entities to amass at the boundaries. This is to say, that by preventing dramatic growth, the prices of everything can stay relatively the same. Salaries not increasing is ok, because nothing is getting more expensive, or it is but very slowly. Thus, as society develops, maybe a little more slowly due to decreased economic rewards, it should develop equally as the economy has more time to diversify and find a way to equalize salaries. Economic theories used in the earlier 1900s were ones of order; by bringing slow growth and a steady hand, growth can be spread equally and fairly according to rank and file. This wasn't just theory, it was a necessity. Every other country had some ability to economically limit the other, even at the height of the British Empire, it was not above it's debt collectors. As the world was forced off the gold standard, so was it, too, forced off any ability to financially normalize among parties. When the only ability to argue about relative currency value is war, and it is absolutely clear that no one really wins that war, whatever little economic arguments there are, become meaningless. The world economy is the members' economies, and those members' economies rely on the concept that there will never be a debt collection call and everyone can continue to print assets following a specific set of rules. Post-2008, the only solution the Federal Reserve saw forward was to continue to print money, because it has no other abilities. The Federal Reserve is owned by the banks it is supposed to regulate, it is inherently self-interested and corrupt, because any entity that profits off of it's own labours may never make an unbiased decision against it. Thus, we saw, for the first time in 44 years of expansive monetary policy directed at abroad (perpetuating unfettered rooting of American companies, and America's economy, into every developing nation), come home to the workers economy. Real economists could tell you why, but this analyst believes it's just a natural spring from the greater M3 & M2 economies forced by the collapse of many international trade deals, allowing/forcing more at-home growth to develop. The massive jump in the M1/M2/M3 in 2020 is more than just government checks to people, it was massive and secretive government checks to the banks, and massive non-secretive government checks to Blackrock. Given that the cost of living has closely followed the rate of M2, and that the M1 money supply has increased at a hyperinflationary rate, it is of sound hypothesis to consider that the cost of living too, will undergo hyperinflation. While there remains sector pressures for independent cases of deflation, there is no reduction in the total cost of living, and that deflation driven by worker persecution or technological innovation is a transfer in product costs to technological costs, and that reductions in the cost of specific elements of the cost of living; shelter, food, health, transportation costs consecutively increase in cost so too as does the total monetary supply as each element of the underlying formula of total economic cost fights for some new majority of growth. Deflation requires one simple principle to be possible; the cost of living decreases. While more dollars can get printed, and the USD FOREX (how much the dollar is in comparison to other currencies) can increase, the individual's dollars do not increase and the demand for more raises commensurate against this. In essence, stronger dollar means a systematic increase in the cost of goods and the overall cost of life. Printing money increases the overall pool of money, creating demand by those feeding off that pool to amass more of it, systematically increasing the cost of life. The only thing that decreases the cost of living is government regulations specifically inhibiting the price increase of specific forward facing assets such as housing, food, internet, power, water, transportation, physical healthcare, and goods + services providing mental healthcare. An alternative is to inflate the money pool at a rate faster than the "natural" growth of the costs. This policy might look like a universal basic income, more social welfare benefits, some form of money sent directly to the people. However, the hidden cost becomes the cost of labour. As the demands of life decrease such that the general willingness to do hard labour and tasks decreases, the need to increase the value package given to the workers. As this cycle of stimulus --> labour squeeze --> Increased pay and worker rights --> increased cost of living --> stimulus --> continues on and on, this author's theory of Perpetual Cyclical Doom is reinforced. In terms of Elliot Waves, this has to be 3? 1990s saw a significant rise in worker pay and rights, 2000s crash was wave 2 with the beginnings of hyperinflation, and now we are at wave 3? Disclaimer Thanks for reading! This is sure to be a continuing cycle of irregular publishing. This author spends a significant amount of time trying to define and shape major issues into something that flows well into an easy explanation. Twitter is a great way to semi-organize these as little thought blurbs, but this is a great way to get a solid chapter written and seeing how it works. I apologize for forcing y'all to be my test subjects, but if I am going to make y'all rich by teaching very surgical skills in company and stock research, I am going to spend time and effort to give y'all some skills to look at the bigger picture and decide how you want to fit in it.
FRED:CPIAUCSLLong
by DoctorFaustus
SPX Likely to Push Farther UpwardI'm going to express a contrary opinion to most expressed within YouTube, Seeking Alpha, and Trading View Ideas: The S&P500 has much farther to go before we reach the "top." To be clear, this is driven exclusively by monetary policy and debt increases. The 10Y rate has been in a very strong down trajectory since the mid 1980s. This, obviously, has deviances from the norm but the rates will continue lower until the Federal Reserve tapers and allows true market forces to reign in rates and, by extension, asset prices. By my logic, the 10Y rate is in a local top and has nowhere to go but down. As can be seen from the graph, there seems to be some exponential correlation between the risk-free-rate and equity appreciation. This would mean that, if I'm right and rates go lower (which I believe is not just likely, but necessary), asset prices will continue to appreciate ever more greatly compared to the RFR. With this, a bold statement can be made: Stocks are not only going farther up, but are still cheap. Very Long. I think the shorts are going to have their lunches eaten; possibly supper, too.
SP:SPXLong
by forever_green
2
Price Outlook of Gold for 2021-2050*** THIS IS NOT FINANCIAL ADVICE. DO YOUR OWN RESEARCH AND FORM YOUR OWN OPINIONS *** 10Y Treasury and Gold's Price: Gold is correlated strongly (92%) with the 10Y Treasury. During 2020, during the depths of the pandemic, we saw 10Y rates under 0.5%. This was the primary catalyst for Gold to find its new ATH during August of 2020. This strong correlation makes it necessary to understand the primary drivers of Federal Reserve policy and actions. Miss-guided Inflation to Gold Correlation: Inflation is the most commonly purported catalyst behind Gold's price movements. This remains true, however the present narrative surrounding inflation (and the convoluted way QE finds its way to markets) makes it very difficult for the public to have an understanding of long-term inflationary expectations. Under the current regime, we are in much greater danger of Cyclical Deflation than any significant inflation. Hyper-inflationary rhetoric is silly and I'll not address it seriously. My assertions of inflation and deflation trends rely strongly on the Federal Reserve operating under the laws by which it's presently constituted. This is unlikely to happen in the long term. Federal Reserve Frustrations and Law Breaking/Changing: Within the next 5 years it will become painfully obvious to the Federal Reserve they're incapable of generating true inflation. Once the Fed and the Government resign to this fact, there'll be a proposal to change the Federal Reserve Acts to give the Fed more monetary freedom. The way this affects American Life is in the introduction of a CBDC (Central Bank Digital Currency); transforming the Fed from the Lender of last resort into the Spender of all resorts. This will be the true catalyst behind inflationary trades; shifting Gold's closest price correlation from the 10Y rate to the threat of true inflation. Powell's Fed Ending: Jerome Powell is slated for re-appointment early in 2022. I don't think he will be. It's likely the next Chairman (Chairwoman) of the Fed will probably be Lael Brainard. In this case, my above statements are hastened and magnified. Federal Reserve (Monetary Policy Trajectory): The Federal Reserve remains hawkish in the short term. This means short term 10Y rates are unlikely to rise to or above 2% for the next few years. As stated above, under present forces, low rates are bullish for the price of Gold but since rates are already tightly approaching 2% the buy signal for gold will remain neutral until 2023. I don't think Gold make any significant moves, but it will likely maintain its present price with a +/-10% around the 200 day moving average. Price Prediction: I will not be buying more physical gold until either 10Y rates rise and remain above 2% or until the Fed introduces a CBDC. I don't see either of these catalysts forming until 2023. Until 2023, it's best to play the short-term averages and trajectories in the Paper Gold markets. Depending upon the economic outcomes of the next few years, Gold could vary wildly in price. If strong deflation persists, $500 Gold is not out of the question. If Laws change and a CBDC is introduced, the price of Gold could easily rise above $10,000 (or other denominations). Unconsidered Catalysts (BASEL III): BASEL III is close to being enacted. I have not been able to research all of the components of BASEL III's changes. However, one of the major changes (along with reinstating Gold as a Tier I asset for collateralization purposes) is making unallocated positions impossible. How BASEL III does this is not clear to me but I will post an update once I have a better understanding of this. Removal of unallocated paper positions in Gold would result in a precipitous rise in Gold's price if the assumption of many Goldbugs (that gold is heavily manipulated through paper markets (ETF's and Bullion Banks)) are true. This isn't that ridiculous an idea considering some statements given by Greenspan and Bernanke. I'll go into details on these statements in future ideas. Short Term Prediction (Now to 2023): NEUTRAL with a price of Gold ranging from $1,700.00 to $1,900.00 . Long Term Prediction (2023 to 2050): REMARKABLY BULLISH with a price of Gold ranging from $50,000.00 (eq) to $100,000 (eq). (where "eq" allows for future U.S. dollar equivalents)
TVC:GOLD
by forever_green
Change Comes QuicklyTo many factors at play to even come close to timing the paradigm shift, but the thesis has remained unchanged as time continues to provide supporting evidence. Fiat currencies are built upon debt, which has an element of time. Since time is a constant and cannot be manipulated, all we have to do as investors is wait. More money will continue to be created in the long term, as a byproduct of banks operating with fractional reserves and due to the extraordinary measures taken by the Fed towards the end of credit cycles in order to soften the inevitable crash and spur the next boom. There is no tolerance for prolonged deflation as years of business-as-usual moderate inflation is the expectation, and the positive feedback loop is more immediate and severe during the busts that follow since debt cannot be repaid and further debt will not be issued. This forecast was created using the "Bars Pattern"
Long
by UbiquitousAngles
1
Bitcoin to $43,500 by July 23-25(Changing my initial lines) Fundamentally bitcoin supply is being taken off exchanges at high levels, inflation, El Salvador news, more companies buying in etc. We had no blow off the top indicating an end to the bull market post 2020 halving. We have consolidated for a few months now perhaps bitcoin is ready for its next move higher. The TA is a classic ascending triangle with a price target 43.5K by July 23-25. Please follow me as a it can’t hurt. Ty!
BYBIT:BTCUSD.PLong
by GodtradesIwatch
1
Deflation, NOT Inflation, the Real Threat to the Stock Market?I am a contrarian. Many successful investors and traders tend to be. Following the crowd isn’t the best financial advice. Recently my contrarian spidey senses have been going off. If you have been following the Stock Markets, and particularly, the fundamentals, you have heard the word inflation be mentioned once or twice. Who am I kidding! That’s all everyone talks about!. The Fed is talking about it, the financial media is talking about it. And for good reason. When I worry about recent inflation, and future inflation I look at it two ways. Firstly, inflation is about a weaker currency. If a currency is weak, it takes more of that weaker currency to buy something. Hence the rising price. Regular readers may recall my worry about the currency war. Nations want a weaker currency to keep assets inflated and to boost exports for economic recovery (mainly the Euro and the Yen on the export front). The second worry regarding inflation is the current situation. With government checks and such, we are in a situation where there are people with more money competing for the same number of goods and services. Productivity is the key, and what we have to increase in order to warrant that extra money supply. Productivity will be a talking about in the near future, especially if we see more supply chain issues. I have heard that there are many young people on golf courses talking about how they will never go back to work. They have made more money trading stocks and crypto’s! This macro look is a bit different than the Federal Reserve. The Fed is telling us that this inflation is temporary. “Transitory” is the word they use. This type of inflation is only occurring due to economies re-opening and people beginning to spend money. Money velocity is increasing. The Fed is NOT raising interest rates, even with inflation data coming above 5% and hitting decade highs, because they believe once consumers begin shifting purchases from goods to services, the inflation will come back below the 2% level. Billionaire hedge fund managers (some still active) such as Ray Dalio, Stanley Druckenmiller, and Paul Tudor Jones have come out sounding the alarm bells on Fed policy and the inflation trade. The Fed will need to raise rates sooner rather than later to avoid major inflation. But, the markets seem to be calling the Feds bluff. Everyone knows the current market environment is all about speculation. Cheap money from the Fed helps. The party keeps going. If the Fed was going to raise rates, many expect the stock markets would tank. They would take a big hit on the taper tantrum. This could be the reason the Fed does not want to raise rates, because of the potential financial crisis that could snowball. Leveraged trades, pension funds, major banks could be affected on a large stock market decline which would trigger a larger crisis. Some say the Fed is trapped, and transitory inflation is a way for them to delay rate hikes for as long as possible. Let’s not forget that there is more debt out there, so a rate hike would make payments more expensive for consumers and for government. But now I want to turn all of this on its head. Pull a 180 turn. What if Deflation is the real threat and NOT Inflation? Inflation signals are: 1.Rising Interest Rates (A Fall in Bond Prices) 2.Rise in Foreign Currencies (Euro, Loonie etc) or another way to put it, a fall in the US Dollar 3.Rising Gold Prices Deflation signals are the opposite: 1.Lower Interest Rates (A Rise in Bond Prices) 2.Rise in the US Dollar 3.Falling Gold Prices Let's see what the chart's tell us: Above are the daily charts of the US 10 year yield, and bonds. I have chosen TLT, but you can see the same on BND. Just remember: there is an inverse correlation. When bond prices rise, yields drop and vice versa. Looking at the 10 year first, do you all remember when the rising 10 year yield was spooking financial markets? Interest Rates were rising, fueling perma bear doomsday market crash scenario’s. Now, we hardly hear about that. And for a good reason. The 10 year yield had to hold above 1.50% for further upside momentum. This did not happen. We have not closed below 1.50%, and it looks like yields are heading LOWER. In today’s trading, yields are puking. A 5% decline at time of writing. TLT might be the important macro chart for the next few months. We have triggered an Uncharted Market Structure pattern. We would be going long, and expect more upside as long as TLT remains above 140. This means higher bond prices, which is big for two reasons. First, it ticks a deflation criteria box. Secondly, it will test the asset allocation model. Money tends to run into bonds when there is a risk off environment. Meaning money will LEAVE stocks for bonds. Perhaps this is signaling an event in the near future which will cause money to run into bonds. Deflation anyone? DXY chart is the chart for this idea. Currently, we are in some Dollar long trades based on the daily chart meeting Uncharted Market Structure criteria. But the weekly chart is hinting at further US Dollar strength. The 89 zone is major support. The Dollar found support there and ranged for weeks, before shooting higher. It seems like a double bottom pattern is in the works. Once again a bit worrying as Dollar strength generally means something is coming down the pipeline. Money flows into the Dollar when things are uncertain. It is a safe haven currency. OR, the Dollar can finally be playing out as I have said months ago. In this currency war, the Dollar is the best fiat out of the bunch. The other way to look at this is through the lens of interest rate differential. If the Fed is going to raise rates sooner than other central banks, money would flow into the greenback. This week and month will be big for the US Dollar. If we close below 90.50 on the DXY, then the deflation criteria for the Dollar becomes challenged. But as of now, the new uptrend is still in play meaning another tick in a deflation criteria box. Last but not least, Gold. This is where things get a bit murky. As a trade, I think there is some upside for Gold that could occur this week. But we want to focus on the longer term. If interest rates drop, this is positive for Gold. But conversely, the prevailing thought is that a stronger dollar is negative for Gold. I still believe money can run into both the Dollar and Gold if there is a confidence crisis (people begin losing trust in government, central banks and fiat currency). Everything macro is pointing to higher Gold prices even with a rising Dollar. Gold is a bit tough to analyze. It looked great with us breaking a flag/pennant pattern, but we have closed below on the retest, so the pattern is now invalid. You can see I have a major flip zone where Gold is currently. This 1775 zone is key. I will be watching this weeks close closely to determine whether Gold continues to move higher. In summary the deflation idea has some technical support. When I see bonds and the US Dollar rising, I automatically think a run into safety. Fear. Perhaps this fear has to do with the pandemic and future variants (the Lambda variant which is deadlier than Delta was recently announced), or maybe big money is pricing in deflation.
TVC:DXY
by Uncharted-FX
2
The target no one believes. (Recession)The target no one believes. (Recession) -Dollar at massive support. Deflation = recession -Oil at big ressistence. -Banks cant keep risking printing money anymore, would risk hyperinflation -Double tops with massive algo trasaction growing with big insider selling high staks. -Summer is the slowest part of the investing period -Momentum totaly useless -Vix at history lows and making support. -EURUSD and GBPUSD at massive resistence. Currencies getting too expensive. -Gasoline prices too high to sustain profits in airline indutries. -Unemployment still too high. -More small companies are suffering, big index stocks overvalued.
OANDA:SPX500USDShort
by PivotX
2
The dollar will die a slow deflationary death.The trajectory of the DXY will be determined by the battle between inflation and deflation. If the narrative of sustained long-term inflation prevails, it will be dollar positive. The Fed is desperately trying to create inflation in this highly indebted economic landscape because inflation erodes the real debt obligation of debtors (the biggest debtor being the US government). In the short-term the inflation narrative could aid the DXY but over the medium- to longer-term the DXY is expected to sink... The moves in the bond market this week has also reflected that the market is starting to buy into the Fed transitory inflation narrative and that interest rates will remain low for the foreseeable future, despite Janet Yellen's rubbish remarks on interest rates as of late. Over the longer-term I expect 10-year treasury yields to remain in this downward deflationary channel. Like all the debt supercycle's we have had in history, this one will end just like the rest of them, with deflation. The velocity of money will bottom out (MV = PQ) and central banks will find themselves in a liquidity trap. The Fed will continue to create deflation with the continued misallocation of capital into overpriced assets. Enjoy the ride to global Japanification people!
TVC:DXYShort
by GustavFourie96
3