The Next Fed-created Catastrophe – a Currency Crisis – Has Already Begun (+2K Views)

There is no escaping the inevitable – if you aggressively debase your currency eventually you are going to have a currency crisis. The first one has now begun.  Words: 350; Charts: 2

So writes Toby Connor (goldscents.blogspot.com) in edited excerpts from his original article* entitled THE NEXT CRISIS HAS BEGUN: AND THIS ONE IS GOING TO BE IN THE CURRENCY MARKETS.

[The following article is presented by  Lorimer Wilson, editor of www.munKNEE.com and the FREE Market Intelligence Report newsletter (sample here) and may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.]

Connor goes on to say in further edited (and in some instances paraphrased) excerpts:

Over the next 3-4 months the dollar is going to test the lower trend line of the megaphone topping pattern and ultimately break through.

When it does we are going to witness a spectacular collapse in the dollar, probably testing the 2011 bottom by the next intermediate cycle low due in November, and this is going to cause all kinds of problems:

• The bond market [is going to continue] breaking free of Fed manipulation. This will only get worse as bonds recognize the severity of the crisis ahead and the Fed prints harder and faster to try and tame the bond market which will…just accelerate the dollar collapse which, in turn, will intensify the selling in bonds.
• The echo bubble in housing has already been pricked. In the chart below we see the same megaphone topping pattern in play as in the dollar index.

Smart money has known for months this was coming. I strongly suspect the manipulation in gold over the last 8 months was done to transfer physical metal from weak hands into strong hands in preparation for this event. Now it’s time for gold to do its job of protecting wealth during a currency crisis.

…Over the next several days and weeks [we are going to see] gold breaks free of the manipulation and gets busy discounting the coming currency crisis.  The intervention is going to try hard to keep gold prices down but, ultimately, gold is going to:

1.  break free of the artificially low prices,
2. protect wealth during an inflationary environment just as it always does and…
3. rise much further and faster than would have occurred if it had been allowed to trade freely.

Batten down the hatches – the next Fed-created catastrophe has already begun.

[Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.]

*http://goldscents.blogspot.com/2013/08/the-next-crisis-has-begun-and-this-one.html (Subscribe to GOLD SCENTS by Toby Connor by Email)

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