While everyone continues to focus on stocks, a much larger, far more important situation is brewing in the single most important asset class in the world. That situation involves the U.S. Dollar.
This article is an edited ([ ]) and revised (…) version of the original (written by Graham Summers) to ensure a faster & easier read. It may be re-posted as long as it includes a hyperlink back to this revised version to avoid copyright infringement.
While CNBC and the financial media love to talk about stocks, the reality is that the currency markets are the largest trading at an astonishing $4-$5 trillion per day (by way of contrast, the NYSE trades less than 4% of this per day), so when a major change occurs, it hits these markets first and, on that note, the single most important currency in the world, the U.S. Dollar Index, is imploding. Thus far in 2017, the greenback has fallen like a brick. As I write this it’s down 9% this year alone.
This is just the beginning. It’s only going to get worse from here.
Far more importantly, this collapse has meant the U.S. Dollar Index breaking below CRITICAL support. It will now begin unwinding its entire bull market from 2014.
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. 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.
Put simply, this chart is telling us that the $USD is going to be collapsing in the coming months.
The implications of this are going to be tremendous for the financial system. US corporate profits will be increasing particularly for large multi-national companies. Emerging Markets will outperform and, most importantly, the $USD’s collapse is going to be like rocket fuel for inflation trades. Smart investors will use this trend to make literal fortunes.
If you’re not taking steps to actively profit from this, it’s time to get a move on.
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