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The U.S. dollar is currently accepted as the world’s reserve currency, but it hasn't always been this way...

One year ago, the two most crowded trades going into 2015 were being long the USD and short US Treasurys. While the former trade had questionable success, the latter most certainly did not work and while hedge-fund managers and other large speculators spent December 2014 setting the biggest bets against Treasuries in four years, fast-forwarding 12 months later we find that the smartest money in the room has fully abandoned those massive short Treasury bets.

While Americans anxiously prepared for their Christmas festivities, anti gun proponents in Congress were hard at work drafting a new bill. If passed H.R. 4269 would literally redefine the Second Amendment as evidenced by the bill’s description, which in no uncertain terms clarifies its ultimate goal: “To regulate assault weapons, to ensure that the right to keep and bear arms is not unlimited, and for other purposes.”

This, ladies and gentlemen, is what "trading" has become.

In 2013, Maduro’s first year in office, the government released a Christmas carol praising the Socialist utopia's dictator. Last year, Maduro debuted a “socialist Barbie” that almost bankrupted stores forced to sell it after the government forced the price down to a tenth of its value. And this year, as AFP reports, "Christmas is dead, there is not enough money," according to one resident, noting there is no Christmas decor anywhere and people do not have enough money to buy presents. Some cannot even afford the basic goods needed to put together a traditional feast of roast pork and assorted sides.

There’s only one investment we can think of that many people either love or hate reflexively, almost without regard to market performance: gold. And, to a lesser degree, silver. It’s strange that these two metals provoke such powerful psychological reactions - especially among people who dislike them. Nobody has an instinctive hatred of iron, copper, aluminum, or cobalt. The reason, of course, is that the main use of gold has always been as money. And people have strong feelings about money. From an economic viewpoint, however, money is just a medium of exchange and a store of value. Efforts to turn it into a political football invariably are signs of a hidden agenda, or perhaps a psychological aberration. So, let’s take some recent statements, assertions, and opinions that have been promulgated in the media and analyze them.

The situation is clear: the 2008 Crisis was the warm up. The next Crisis will be THE REAL Crisis. The Crisis in which Central Banking itself will fail.

There has been a "continued shunning of fixed income" with over $25 Bn of outflows from bond funds in three weeks, of which $6.4 Bn took place in the past week, resulting in outflows in 6 of past 7 weeks.However, the biggest outflow risk is not to Junk but to investment grade, that main funding source for trillions in corporate stock buybacks: it was the IG space that took another beating with largest outflows ($3.5bn) in 17 weeks!

In an unexpected turn of events, the disappearance of not just synthetic but very physical dollars has hit one region much harder and much faster than we expected. Africa.

With just a handful of trading sessions left in the year, this is how the major global markets look as 2015 is about to close. As of this moment, and in keeping with the Christmas spirit, the biggest question is whether the S&P500 will close green or red for the year.

While Sweden is over-flowing with excess cash on bank balance sheets, it appears that banks in Hong Kong are desperate to borrow Yuan (or scared to lend) as overnight HIBOR just exploded higher to 9.45% - a record for the interbank offered rate. The HKD and CNY/CNH FX markets remain relatively stable (with Yuan fixed marginally higher again for the 3rd day). The last time 1-week HIBOR rates spiked like this, US equity markets crashed on Black Monday.

"The most important channel through which the Dragon's Tail scenario can affect other markets is trade, although financial linkages and market contagion could also have a significant impact on some markets and asset prices."

There are a few correlations that we find particularly compelling...

Needless to say, these names are just the beginning: once the redemptions - and gating - genie is out of the bottle, there is no putting it back.