‘Four Generations’

The Average Life Of A Fiat Currency

What if the ‘imminent collapse’ of the dollar is overblown by about 50 – years?

According to this just out, on private gold-filled currency, the article states average life of a fiat currency, is four generations. It goes on to say there are exceptions like the British Pound, continuing on even after hundreds of years.

The Black Swan

In Taleb’s book ‘The Black Swan’, he says it’s an event that nobody expects. It has long lasting repercussions and permanent change.

However, what most if not nearly everybody ignores or leaves out, is his alternate definition. That is:

A Black Swan can also be a future event that’s widely accepted as fact, that does not happen !!!

Is that where we are with the U.S. Dollar?

Even though the dollar has not collapsed and in fact, has rallied as we’ll see below, the ‘collapse’ talk continues unabated.

It’s easy to talk about dollar collapse.

It’s what gets the clicks. No matter that an actual collapse may be years if not decades away.

As of this post, how many ‘monopoly money’ YouTube videos can be found? Seems like it’s the same number or more than, ‘gold to skyrocket higher’.

Well, so far, gold has not skyrocketed higher.

On top of that, this site’s even provided an exclusive correlation that gold’s moving inversely to corn.

See ‘Insight Note at the end of this post.

Ever since the ‘Derecho‘, it’s never been the same.

Back to the dollar.

No doubt, the dollar was whacked over the past trading week. Let’s take a look at what the UUP, price action is saying about itself.

Dollar, UUP, Weekly Chart

The unmarked chart shows the dollar oscillating, testing support for six-months at the beginning of 2021.

Then, in mid-June ’21, UUP pivoted decisively higher (gold, GLD, pushed lower) and never came back to those levels.

Of course, this past week The Usual Suspects were out talking about the dollar and ‘monopoly money’.

Since the ‘gold skyrocketing higher’ forecast failed spectacularly, along with it being the investor’s fault, we then had the ‘clueless‘ and now, it’s ‘monopoly money’.

The chart below shows last week’s bloodbath has served to bring UUP, down to an established trend-line.

It’s important to note, with all that (down) volume, the most since early 2020, UUP was not able (thus far) to break through the trend (blue line).

That leaves the dollar at or near, the danger point.

Continued, sustained selling, risks breaking the uptrend.

If the opposite takes place and UUP starts to rally, last week may have been an inflection point (to the upside).

Gold (GLD) and the dollar appear to still be inversely correlated.

Summary:

Ever since removal of the link to gold in 1971, the dollar has the potential to collapse at any moment.

However, in this case, we at least have some historical precedent that on average, fiat currencies tend to last four generations before becoming worthless.

Wyckoff sates in his writings over and again, ‘somebody always knows something’.

If there’s a collapse afoot, he tells us to look at what the market is saying about itself (not advice, not a recommendation).

Stay Tuned

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

The Danger Point®, trade mark: No. 6,505,279

Insight Note:

It’s been a strange coincidence over the past year or so, ideas presented on this site make their way to certain YouTube sites either in the titles, or within their content.

The timing of this phenomenon, that within a day or two, ‘post it first here, see it on YouTube there’, has occurred more times than one would consider as just ‘coincidence’.

Admittedly, the insights (making their way to certain YouTubers) have not been exclusive … that is, until now.

Recognition of the Gold/Corn inverse correlation, first posted here, is unique to this site.

As far as is known, this correlation has not been presented on any other financial site or YouTube channel or any other medium.

It may be an important data-point and map into this site’s long-time premise; it’s the corn and the grain first, then gold and silver (not advice, not a recommendation).

For more detail, search for Genesis 41.

When ideas from others are incorporated into the analysis presented on this site, full acknowledgement of the source is cited.

As Dr. Elder said in his book ‘Come Into My Trading Room’:

“I have zero respect for thieves”

He’s talking about the theft of his book title: “Trading For A Living”. He goes on to say, (paraphrasing)

‘Do you really want to use market analysis or input from someone that can’t think for themselves?’

Authorization:

Therefore, this footnote is authorizing the further use of the Gold/Corn inverse correlation by others in the industry if they so choose with the following caveat:

If one of the sites monitored (or some other media) uses this exclusive insight, and does so without referencing the source, it puts this author in the unenviable (but not unfamiliar) position of calling out the thief by name … not unlike what Stew Peters is doing (to the hoax/genocide perpetrators) on his broadcasts.

This market environment’s providing a fantastic public service:

It’s separating out the hucksters, the shysters and the otherwise incompetent from those who are, or who are striving to provide a service or useful insight.

The general investing public may find out soon enough, they’re on their own. Maybe unbeknownst to them, they’ve always been on their own.

End

Dollar Divergence

9:51 a.m., EST

Everyone loves to hate the dollar.

That sentiment extreme is a set-up … for the bulls.

If the UUP dollar index ETF, manages to push below the 24.00 – level, it presents the opportunity for a significant bullish divergence.

As Van Metre has stated many times over the past few months, the market’s not expecting, and not in position for a dollar rally.

How can it be … with the rabid gold bulls thrashing about with each upward blip in GLD, GDX and GDXJ.

From this site’s perspective, we’re staying away from that (gold) market and have focused on biotech … where things are really getting underway; but now, back to the dollar.

The weekly chart of UUP, shows the potential set-up.

If somehow we get a (narrow range) push below the 24-level, it would set up a clear bullish divergence on the MACD.

At this point, anything can happen.

Saying that gold will crash if the dollar launches upward is certainly possible. However, in today’s world, the opposite could happen as well.

Just one more reason to say away and focus on shorting an index that’s decisively moving lower: Biotech (not advice, not a recommendation).

Side Note:

The whole ‘divorce’ thing, you know what I’m talking about, could be a signal in disguise.

The ‘higher ups’ may have decided our cardigan wearing benefactor has reached the end of usefulness.

If so, how many biotech rats are now going to jump ship (before the paddy wagon arrives) knowing the jig is up?

Could that be why SPBIO, posted new lows in five time-frames; Daily, Weekly, Monthly, Quarterly and Yearly, last week?

Stay Tuned

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

Dollar Death, Not Yet

The latest financial fad, the ‘dollar destruction’ narrative, appears to be losing steam … at least for now.

shutterstock_536563939

On the other side of the spectrum are the precious metals markets with their ‘all bets are off’, ‘this is it’, narrative.

Of course, it’s a dog pile of expert opinion on the whys of the dollar destruction.

Why not join nearly everyone else on the #MeToo, fiat currency bandwagon?  A safe bet no doubt; we all know how important it is these days to “stay safe”.

So, what’s really going on?

Since this site follows principles laid down a century ago, by Richard Wyckoff, it’s not important to know the “why”.  That reason changes daily if not minute by minute.  The truth behind the move will eventually come out; long after the trend has reversed.

As trading legend Ed Seykota inferred, if you want to make money, fundamentals are essentially a waste of time.

2020-08-06_17-09-41-UUP-Weekly-Force-Index-notesWhat we see is downward thrust energy on the dollar proxy, UUP is declining.  Downward enthusiasm is waning.

Does that mean go long on the U.S. Dollar?  Well, that’s up to the reader.  What is being presented here, is the latest hysteria is at least slowing down or coming to a pause.

As Jeremia Babe reports at this link, were just one or two innings into the greatest financial collapse of all time.  The dollar may go through wild excursions before potentially coming to its long awaited fiat demise.

 

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.