Are Charts Telling Us The $USD Is Heading For Trouble?

By quick way of review, here’s the key chart. As you can see, the $USD staged a large bull market run in 2014 as the [Foreign] Federal Reserve wound down its QE program. The greenback was then range bound for three years until this month when it broke down in a big way.

https://i0.wp.com/gainspainscapital.com/wp-content/uploads/2017/08/GPC82917.png

US Dollar ($USD) dropping below critical support.

Here’s the $USD’s chart running back 40 years. I call this the “single most important chart in the world,” because how the $USD moves has a massive impact on all other asset classes.

As you can see the $USD broke out of a massive 40 year falling wedge pattern [between 2014-2016]. This initial breakout has failed to reach its ultimate target (120) and is now rolling over for a retest of the upper trendline in the mid-to low-80s.

https://i2.wp.com/gainspainscapital.com/wp-content/uploads/2017/08/GPC829172.png

The Long Term [40 year] Chart Of The $USD

Question:

What happens when new currency is created with few limits by central and commercial banks?

Answer:

Far too much debt and currency are created.

https://rasica.files.wordpress.com/2017/04/word-image-2.jpeg?w=556&h=306

Central Bank Balance Sheets have increased by $10 trillion in the last decade and $1 trillion YTD in 2017.

Question:

What happens when an extra $10 trillion in central bank debt plus another $80 trillion or so in other global debt is created in a decade?

Answer:

Prices rise because each unit of fiat currency purchases less.

Market                             Early 2007                                  Early 2017

NASDAQ Composite            2,400                                        6,000

S&P 500 Index                      1,400                                        2,370

T-Bond                                     110                                            150

Gold                                         700                                         1,250

Silver                                         13                                              18

Crude Oil                                  60                                              50

Now might be a good time to grab some physical gold, silver and cold stored Crypto.

Source: Political Vel Craft

 

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