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A Global Deleveraging Crisis Is at Our Doorstep
The blogosphere is rife with talk of the “death of the US Dollar.”
The US Dollar will eventually die, as all fiat currencies do. But the fact remains that it is the reserve currency of the world. And everyone on the planet has been borrowing in US Dollars for decades, or leveraging up using Dollars.
When you borrow in US Dollars you are effectively shorting the US Dollar. So when leverage decreases through defaults or restructuring, the number of US Dollars outstanding diminishes.
And this strengthens the US Dollar.
With that in mind, it looks as though we are in the early stages of a massive, multi-year Dollar deleveraging cycle. Indeed, the greenback is now breaking out against EVERY major world currency.
Here’s the US Dollar/ Japanese Yen:
Here’s the US Dollar/ Euro:
Even the Swiss’s decision to break the peg to the Euro hasn’t stopped the US Dollar from breaking out of a long-term downtrend relative to the Franc:
The fact that we are getting major breakouts of multi-year if not multi-decade patterns against every major world currency indicates that this US Dollar bull market is the REAL DEAL, not just an anomaly.
With that in mind, I continue to believe the US Dollar is in the beginning of a multi-year bull market. And this will result in various crises along the way.
Globally there is over $9 trillion borrowed in US Dollars and invested in other assets/ projects. This global carry trade is now blowing up and will continue to do so as Central Banks turn on one another.
This will bring about a wave of deleveraging that will see the amount of US Dollars in the system shrink. This in turn will drive the US Dollar higher.
Indeed, consider that the US Dollar actually MATCHED the performance of stocks for the year of 2014.
Any entity or investor who is using aggressive leverage in US Dollars will be at risk of imploding. Globally that $9 trillion in US Dollar carry trades is equal in size to the economies of Germany and Japan combined.
Smart investors are preparing now.
If you’ve yet to take action to prepare for the second round of the financial crisis, we offer a FREE investment report Financial Crisis "Round Two" Survival Guide that outlines easy, simple to follow strategies you can use to not only protect your portfolio from a market downturn, but actually produce profits.
You can pick up a FREE copy at:
http://www.phoenixcapitalmarketing.com/roundtwo2.html
Best Regards
Phoenix Capital Research
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"When you borrow in US Dollars you are effectively shorting the US Dollar"
So when demand for the Dollar rises.... you are shorting it ?
Huh, thats new !
If i were Yellen.... i would print more dollars and buy gold with it.
This would work very well.... as long the Dollar is being accepted as a serious currency ofcourse.
that's just that slightly insane theory that every trade is going long in something and short in something else
a lot of effort has been put in explaining to the trading masses that they should always go long in something and short in something else, and look at all trades this way
it implies that you would not borrow in USD if you thought that the USD would go up, which is a fallacy, pure and simple
it also implies that borrowing as such is part of a "trade", which is another fallacy, as such, or should be seen as a special trade in time, or of time
but again, it implies that all trades and trading is somewhat equal and similar, which is then due to looking at all human exchanges as pure contracts and transactions
in short, it's hogwash and a piece of truthiness
Phoenix contrary indicator . Market will be up 300 points for the rest of the week.
Who cares? There I said it!
The only thing at my doorstep is Saturday's NYX, which I have been too lazy to pick up.
Front of the plane or back of the plane. Not really that much difference since the plane is going down!!!
This makes sense to me. Aside from owning cash and no debt - what's the best way to play a multi-decade increase in the value of the USD relative to assets?
Buy LEAP calls in USD/JPY or USD/EUR for a synthetic long, or buy LEAP ITM put on same pairs and buy actual currency pair. If the pair ever drop below the put price you can exercise and get your money back minus the put premium.
Phoenix Capital's predictions have been wrong for the past 5 years. Will this time be different?
All of his predictions have been wrong?
I seem to remember him say that the economy was in bad shape and fed would print liberally and it was intent of fed to crush the dollar.
I don't believe you. WADR, from Missouri, so show me when and where he said that.
Apparently everyone else can actually print faster...
"winning"
The cleanest turd in the pile. The dollar is holding on because the world economy is slowly crumbling but the last to die still means your gonna be dead. Fortunately with our economic and immigration policies we won't have to wait very long and the sound of the trapdoor opening will be a complete surprise to the sheep.....
K2: “They ain’t making it any more': managing our land sustainably”
http://www.neurope.eu/article/poto%C4%8Dnik-managing-our-land-sustainably/
De reActie van D'n Arend op de uitspraak "door de informatie van Snowden kan dadelijk iedere regering claimen dat hun 'wetenschappelijke adviesorgaan' verantwoordelijk is voor ..." is net binnen.
http://www.mintpressnews.com/the-us-government-wants-you-to-hate-snowden...
Netwerk @SuperWil wil dat iedereen een opleiding tot IntuïtieTrainer gaat volgen. Ofwel je leven leiden in lijn met de 'Logica van de 1'.
Een politicus wordt geacht om 'onafhankelijk en zonder last & ruggespraak' de juiste beslissing voor 'jezelf en het algemeen belang' te nemen. Natuurlijk is dat onmogelijk zonder dat de rechtstaat aan waarheidsvinding doet.
http://www.volkskrant.nl/buitenland/noodtoestand-in-baltimore-om-geweldd...
In Baltimore zijn al gewelddadige protesten uitgebroken, omdat in het 'LAND van de VRIJHEID' nog steeds het gedachtegoed van Spinoza niet wordt toegepast.
Sheep are normally pretty undisturbed by their introduction to the slaughterhouse; it is always too late...