Another day, and the dollar continues it's march lower. Take a peak at the ugly chart below.
There seems to be no doubt a decision has been made stock markets must continue to march higher, and the dollar will be sacrificed. Quite honestly it's amazing to watch. When was the last time we saw a correction in the market. Now a days we may get a one or two day pull back, then off to races. I can't remember when we saw a 5% to 10% pullback in stock markets, it just doesn't seem to happen.
In addition to our markets continuing to march higher at the cost of the dollar, there are many other additional reasons why the dollar is under pressure. Here are a few examples:
- Massive deficits with no end in sight.
- China trading in Yuan backed oil contracts, putting pressure on the Petro Dollar
- Valiollah Seif, the governor of the Central Bank of Iran, was quoted recently by domestic media, saying that Iran would either replace the US dollar with a new common foreign currency or use a basket of currencies in all official financial and foreign exchange reports. http://www.presstv.com/Detail/2017/01/31/508508/Iran-to-ditch-dollar-as-Trump-anger-builds
- Russia continuing to diversify away from the dollar, they are buying Yuan, gold, and other currencies
- Crypto currencies which is a tiny market cap now, but will continue to be a black hole for dollars as people globally lose confidence.
- It goes on and on
So what does this mean? It means it's more important than ever to diversify your assets away from the dollar. It means inflation will be here soon, regardless to the BS numbers we are told. It means the saver will get wiped out, as keeping money in a savings accounts, or bonds will not keep up with inflation.
While it' s hard to find any markets that trade freely, at some point it's hard to believe assets such as gold, silver, bitcoin, litecoin will not continue to march higher. Obviously in 2017 we had a huge run in cryptos, at some point I expect that march higher to continue. That does not mean this current pullback in cryptos is over. Also, we are starting to see a pulse in gold and silver which should accelerate.
Bottom line find ways to protect your purchasing power.