The Sword of Damocles is hanging over the world economy, held only by a single hair of a horse’s tail. With such visible danger, the problem could have been fixed easily by either using a gold chain or even removing the sword altogether.
But the elite, and central bankers have had other plans. Instead of replacing the hair with a solid metal chain, the sword is today hanging by a very fragile thread that can break at any time.
The global financial system was on the verge of collapse a decade ago. Central banks around the world, led by the Fed injected around $25 trillion in loans and guarantees. Banks like Citigroup, Morgan Stanley, Merrill Lynch and Bank of America got trillions. (see table below).
Today, more than ten years since the Great Financial Crisis started, the debt problem has become uncontrollable. Global debt has doubled since 2006 and together with derivatives and unfunded liabilities risk has grown exponentially. So $100s of trillions increase in debt and liabilities has not bought the world enduring stability but instead weakened the foundations on which the world economy rests to an extent that the next rescue attempt will totally fail.
NEW WORLD ORDER GOVERNMENT
It is therefore inevitable that the Sword of Damocles will soon drop and cause irreparable damage to the world. We can speculate if central bankers are totally unaware of the risks or if they have a hidden agenda. There are theories that the elite will orchestrate a collapse of the dollar and of the financial system which will cause global panic. The purpose would be to hand over political and economic power to a centralised authority with the BIS (Bank of International Settlement) and the IMF playing a central role. Social unrest and migration is all part of the plan. The ultimate goal would be a NWO (New World Order) government and currency. Microchipping everyone and eliminating private property would be also be part of the plan.
Whether this is all conspiracy theory or if a clandestine plan of this nature actually exists, time will tell. For most people it all seems very farfetched and unlikely. What seems more certain is that when the current economic super bubble bursts there will be dramatic changes in the world economy and in the political system. If governments and central banks lose control over both the financial system and the political system then the vacuum created could be extremely dangerous. If law and order cannot be maintained, then the whole fabric of society will disintegrate. That would also involve the breakup of national borders as well as mass migration on a much bigger scale than we have seen so far.
A DIFFERENT WORLD
Whatever the exact course of events, the world will experience major changes starting in the next few years. By mid-century our children and grandchildren will live in a very different world to the one that the West has experienced since WWII. Humanity has always adapted throughout history and most certainly will this time too. But there is likely to be a lot of suffering and hardship for a major part of the global population. The explosion in the world population from 1 billion to 7.5 billion since 1850 is likely to reverse. This will lead to a reduction of maybe 2-3 billion people due to war, civil unrest disease, famine and lack of nutrition.
All forecasts are by definition wrong so only future historians will get the facts right. What is going to happen in the shorter term is easier to forecast with greater accuracy. When the Sword of Damocles falls within the next 1-3 years, the damage inflicted to the financial system will be of such magnitude that central banks desperately will print $100s of trillions or quadrillions to save the system. But this time the printed money will have no effect. Instead it will destroy the value of money and create the biggest global hyperinflationary period in history.
GOLD REVEALS GLOBAL CURRENCY COLLAPSE
Major trends normally start in the periphery before they move into the centre. There is no better measure of hyperinflation than gold. Because gold reveals the mismanagement of the economy and the debasement of the currency that has been rampant in most countries in the last 100 years. If we just take the dollar, it has declined 97% against gold since 1970 and 80% since 1999.
HYPERINFLATION IN VENEZUELA
But that decline is nothing compared to the countries that are already encountering hyperinflation.
By the end of this year, inflation in Venezuela is expected to reach 1 million percent!!
At that rate, Venezuela is now in the Weimar stratosphere. In January this year the IMF estimated that Venezuelan inflation would be 2,400% in 2018. Only the IMF can make such an incredible mistake in forecasting 2,400% when the actual will be 1 MILLION percent. What this also shows is that when hyperinflation takes hold it increases stratospherically. A cup of coffee cost 2,300 Bolivar a year ago and is now 2 million Bolivar. From August they will take five zeros off the currency. We will see how long it will be before hyperinflation adds them back again.
As Margret Thatcher said, “the problem with socialism is that you eventually run out of other people’s money. And that is where Venezuela is. An oil rich and previously prosperous economy turns to socialism and has now totally run out of money”.
And the effect on the economy is totally disastrous. GDP is down over 40% in the last 3 years. Just in 2018, GDP is expected to be down 18%.
<img src="https://goldswitzerland.com/wp-content/uploads/2018/08/venezuela_gdp-600×318.jpg" sizes="(max-width: 600px) 100vw, 600px" srcset="https://goldswitzerland.com/wp-content/uploads/2018/08/venezuela_gdp-600×318.jpg 600w, https://goldswitzerland.com/wp-content/uploads/2018/08/venezuela_gdp-150×79.jpg 150w, https://goldswitzerland.com/wp-content/uploads/2018/08/venezuela_gdp-768×406.jpg 768w, https://goldswitzerland.com/wp-content/uploads/2018/08/venezuela_gdp-720×380.jpg 720w, …read more
From:: Common Stock Warrants
Resource Investors – Will The Wait Be Worth The Pain? and Some Great Articles
“I continue to look for gains of 500%, 1,000% and possibly more within the next 2 years.”
I’ve got some great articles for you today (see below) which should get you excited about the opportunities that lie in front of us.
Perhaps you have given up on gold and silver?
In my opinion, that would be a big mistake as I continue to see big gains on the horizon. I’m not talking about 5% or 10%. I am talking about opportunities that should bring us 1,000s of percent and more. I invest to hit home runs not a few percentage points. True, not all of these speculative investments will reward you and some will be losers which is why you need a basket of these opportunities.
The question I always ask is, what are you doing now to prepare for the breakout?
Yes, I know the markets are depressed and perhaps you have a right to be depressed, but things change folks and markets can change on a dime from bear to bull.
For me, there is only one way to play this resource sector and it is by investing in quality junior mining companies and/or long-term stock warrants trading on those companies.
If you are not familiar with stock warrants, you can receive The Stock Warrant Handbook for FREE by visiting, http://CommonStockWarrants.com along with more freebies.
As well, many investors are finding great opportunities with warrants on the U.S. stocks in other sectors, bio-techs, pharmaceuticals, banking, blank check companies, etc.
Remember that only 25% or so of my personal portfolio is in stock warrants, the balance are common shares in the junior mining companies and I am on the hunt for new additions to my portfolio.
There are many interesting opportunities in stocks as well as the stock warrants available today, so if you are not a current subscriber, LET’S GET YOU STARTED NOW.
The next several years, 2018 – 2020 will see some exciting times in the PM sector and I am looking to make a fortune. Do you want to follow me? Let’s have some fun and make money together.
Recent Articles On Our Websites:
From the shores of Lake Chapala, Jalisco, Mexico
Dudley Pierce Baker
From:: Common Stock Warrants
DOW / GOLD – A 98% FALL NEXT
July 26, 2019
by Egon von Greyerz
“The winner takes it all, the loser standing small” (an Abba song) is the next phase in the world economy. Sadly there will be few real winners since the world and its people will be the loser in the coming phase of destruction of asset values, implosion of debts as well as a breakdown of the fabric of society.
I do realise that this all sounds very gloomy, and also that bearers of bad news are not popular. But the world is now facing an inevitable breakdown of the biggest debt and asset bubble in history. It is absolutely certain that this will happen, so it is in my mind not a question of if but only when.
EVERYBODY WILL LOSE BUT IMPORTANT TO LOSE LESS
Although we will all be losers to some extent, there are be some who are better protected than others. And the few people who understand this will be the winners in the investment world.
This week I want to make the message simple. There is one graph that tells the whole story of what will happen in the next few years. Anyone who “gets” this chart also understands what is going to happen. But there is only a minuscule percentage of maybe 0.5% of the investment population who would even look at a simple chart that could be the difference between misery and fortune. This means that over 99% of the investment world will not be prepared for what is coming next and most of these people will see a destruction of their assets to an extent that has never occurred previously in history. Their journey will end up in miseries whilst the few who take the tide that leads to fortune will have secured their financial position.
There is a tide in the affairs of men.
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.
On such a full sea are we now afloat,
And we must take the current when it serves,
Or lose our ventures.
Shakespeare – Julius Caesar
STOCKS VS GOLD – A VICIOUS FALL COMING
The chart I am talking about is the stock market compared to gold. I will take the US market as the example but the ratio chart gold versus stocks could be applied to most stock markets in the world.
If we first look at the Dow/Gold chart since 1997, we find that it topped in July 1999 at 45. This means that one unit of the Dow bought 45 ounces of gold. It then crashed by 87% to 6 in 2011. Since then there has been a steady recovery to the 20 level. In technical terms that means a very normal 38% correction.
So 19 years after the Dow/Gold top in 1999, the stock market is still extremely weak measured in real terms or real money which is gold. And this is in spite of a major recovery in stocks since the 2009 bottom. This bodes ill for stocks. Whether the correction goes a bit higher than the 20 level is irrelevant. The chart shows that stocks have recovered in nominal terms due to massive money printing. But in real terms, stocks are in a long term downtrend since 1999 and this downtrend will soon resume with a vengeance.
DOW GOLD – FOUR CRASHES SINCE 1837: 70%, 90%, 96%, 87%
To understand the longer trend we need to look at a long term chart since 1800. The chart below shows that stocks have been in a long term uptrend against gold for 200 years. This is the natural consequence of the real growth of the world economy fuelled by industrialisation and the discovery of oil. Between 1800 and 1913, the swings of the Gold/Dow ratio were relatively small with one exception. But with the foundation of the Fed and modern central banking the swings became much greater.
PANIC OF 1837 – 70% FALL
The biggest crisis in the 1800s was the Panic of 1837 which lasted until 1844. As with all crises, this one was preceded by a major speculative bubble with stock and land prices surging together with commodities like cotton and also slave prices. This led to a deflationary crash and a depression with high unemployment and bank failures. Out of 850 US banks, 343 closed entirely and 62 failed partially. During the 7 year crash, the Dow/Gold ratio declined by 70%. This was by far the biggest decline of the ratio in the 19th century.
CRASH 0F 29 – 90% FALL
The next big fall was after the stock market Crash of 1929 when the ratio fell 90%. Thereafter it went up 14 fold to a top in 1966. The next big drop was 96% with Dow/Gold reaching 1 to 1 in 1980. Then the biggest surge ever in the Dow/Gold ratio started with a 45 fold increase between 1980 and 1999. Stocks boomed and gold declined. That 1999 peak is likely to stand not just for years but for decades. (see chart above)
DOW/GOLD – A 98% FALL COMING
The big Megaphone pattern in the Dow/Gold ratio since 1913 completed on the upside in 1999. Between 1999 and 2011, the ratio crashed by 87%. This is not the end of the down trend. The next big move will at least reach the bottom of the Megaphone. I would be surprised if the ratio doesn’t go well below the 1 level it reached in 1980. More likely is 1 Dow to 1/2 ounce of gold or lower. (see chart above)
A fall of that magnitude will involve a stock crash from …read more
From:: Common Stock Warrants
ALERT: Greyerz – The Global Reset Will Come Like A Thief In The Night
July 15, 2018
As the world edges closer to the next crisis, today the man who has become legendary for his predictions on QE and historic moves in currencies, told King World News that the global reset will come like a thief in the night.
Where have all the dollars gone? Long time passing
Where have all the dollars gone? Long time ago
Where have all the dollars gone? Uncle Sam has spent them everyone
When will he ever learn? When will he ever learn?
The Global Reset Is Coming
July 15 (King World News) – Egon von Greyerz: “When Pete Seeger wrote the famous song “Where have all the flowers gone” back in 1955, little did he know that the total US debt, which was a few hundred billion dollars at the time, would, 63 years later, be almost $70 trillion.
But there is no reason why Seeger should have known. He was a singer-songwriter and his legacy will last a lot longer than Nixon’s, Greenspan’s, Bernanke’s, and all the other players that have contributed to this massive growth in credit and destruction of the dollar. While Seeger’s song – a work of art – is likely to be around for at least another 50-100 years or longer, all the opportunists that have destroyed the US economy, and thus the world economy, will soon be forgotten…
Listen to the greatest Egon von Greyerz audio interview ever
by CLICKING HERE OR ON THE IMAGE BELOW.
Egon von Greyerz continues: “It is absolutely unreal how the world pays so much respect to mediocrity or even incompetence when it comes to running the financial system. Central banks and their heads have created this monster balloon which is now waiting to be popped. They have given the world the impression that they have been instrumental in saving the world economy. The central bank chiefs that managed to retire before the balloon burst can count themselves lucky. In my view, the luck is now in the process of running out for the present ones.
These chiefs believe so much in their own ability as saviors of the world that they don’t understand that all they are doing is creating a much bigger monster by printing and printing and printing. They are so arrogant that they can’t even call their actions by an honest name. What they are doing is sheer Money Printing or MP. But instead they call it QE or Quantitative Easing. What an absolutely ridiculous name that is designed to hide their own inadequacies as well as cheating the people. Nobody understands what QE means and that is, of course, deliberate. They simply confuse the people and mislead them into believing that their hocus pocus is actually some alchemistic formula that creates eternal prosperity.
These central bank heads are now so confident of their control of the situation that they are turning the QE to QT (Quantitative Tightening). That is, of course, utter and sheer arrogance. QE hasn’t worked. All it has done is to turn a fragile financial system into the biggest bubble in history. Even with zero or negative interest rates combined with massive MP, real GDP is not growing (measured with real inflation). Also, several dollars, euros or pounds of credit expansion are required in order to create just one dollar, euro, etc, of GDP growth.
Since QE, MP, or whatever you call it, hasn’t worked, why the hell does anyone think that QT will work? This is like taking away the punchbowl from a chronic alcoholic who will die from his drink or die due to lack of drink. And it is exactly the same for the global economy. It will collapse with more QE and and will collapse from QT. So QE / QT = TE (THE END).
“When will they ever learn, when will they ever learn” that you can’t create prosperity by printing money? And remember that money printing is not just what central banks do directly. Money printing also means credit expansion by banks, credit card, and finance companies, etc. All of these lend out 10-50 times the deposits or capital they receive. There is, of course, only one way to learn a lesson properly, which is the hard way. And the hard way in the case of the world economy is that the monster bubble pops. And like with many bubbles, this one only contains hot air.
Thus, the $2.5 quadrillion monster bubble contains just empty promises that all disappear when the bubble is popped. These promises are not only words, but also $2.5 quadrillion of monetary promises or IOUs. To keep the bubble from deflating, central banks have had to constantly pump it up bigger and bigger. So more and more debt will fill the bubble together with inflated assets and even more empty words from bankers and politicians to make it all look plausible.
The debt explosion is not just a US disease. It is a US-led global phenomenon that has infiltrated most nations around with a central bank that can print money. Just look at the chart below illustrating how global debt has tripled since 1999 from $80 trillion to $240 trillion today.
GLOBAL DEBT: The $240 Trillion Nightmare
When the global debt and asset bubble pops, the world will find out that there was nothing inside. Of course, there are real assets and real wealth, but the problem is that when the bubble pops, all the debt will implode …read more
From:: Common Stock Warrants
By Clive P. Maund
July 19, 2018
I watched Trump’s press conference in full following his meeting with Russian President Vladimir Putin in Helsinki. To me, Trump sounded positive and perfectly reasonable, and his behavior at this time was actually Statesmanlike. Here is a link to the full press briefing including an English translation of what Mr Putin said. It is worth watching this in full if you haven’t already, as shortened versions are likely to be selectively edited.
Of course it was to be expected that the gangsters who now run the United States but don’t entirely control Trump would react in a hostile manner to Trump’s remarks, but even I was a little taken aback by their rabid apoplexy. The mainstream media, which they totally control, went into full attack mode on Trump.
Whilst the majority of normal and balanced people would doubtless like to see a state of peace and concord between Russia and the United States, that is not what the Military Industrial complex and the Neocons want – they want Russia as an adversary, because they need a bogeyman, an enemy, so that they can continue to drain the blood and treasure of the American people into their coffers. It has been estimated that a Military budget of $200 billion per year would be more than adequate to defend the Homeland of the United States against any and all who might try to threaten or overrun it militarily. However the Military and the Pentagon bleeds the American taxpayer to the tune of $800 billion per year – $600 billion in excess of what is required to get the job done – so it’s no wonder that the American middle class is feeling drained and exhausted, and the infrastructure of the country crumbles as defense contractors live “high on the hog”. Furthermore, much of this budget is wasted on inefficient projects like the vastly expensive F-35 fighter, whose real purpose is to funnel money into the pockets of all involved in it. That’s just the military we are talking about here and doesn’t take account of the other arms of the bloated parasitic government machine.
John Brennan had the effrontery to call Trump’s Helsinki press conference “nothing short of Treasonous”. Stop and think about that for a minute – Trump makes the effort to defuse a dangerous escalation of tensions with Russia, which is in no-one’s interest except the Neocons and the Military, and he gets called treasonous for his pains, which is a gross disrespect to the democratically elected President of the United States and therefore to his supporters – in other words the greatest percentage of voters at the election. In the writer’s view this kind of disrespect to the democratically elected President of the United States by someone holding public office is not only disgraceful but itself treasonous, and if the United States judicial system functioned properly, which it does not as it has been totally corrupted by the gangsters who now control the country, Brennan would be fired and incarcerated. In the old days, when real traitors were recognized as such and given short shrift, he would probably have been put up against a wall and shot – if he was lucky.
As we know, the Deep State exercise total control over the mainstream media, which attacked Trump like a pack of rabid dogs right after the Helsinki conference. They clearly hold the view that the majority of the population are absolute morons who will believe anything, and sadly, they are probably right, which is what makes the outlook so bleak. You may be amused to read some of their attack articles of the past few days, such as You’ll never make America great again by chucking Americans under a Russian bus in such a grotesquely disloyal manner, Mr President and Trump’s darkest day and Putin’s Puppet!Clearly, you have to be retarded to believe this Deep State propaganda, but it seems like a lot of people are. Even Arnie chimed in, saying that Trump had sold out America to Russia. Now, Arnold Schwarzenegger was a great and unique “tough guy” actor, and his loyalty to his adopted country is certainly to be commended, but my pet dog knows more about geopolitics than him, and for that matter a lot of the Left-wing liberal acting class that flocculate around Los Angeles, who are high on ideals and low on acumen and analysis – he is simply clueless about how the country has been taken over by a coterie of gangsters who are bleeding it white. This became obvious when the crooked, shifty semi-articulate George W Bush became President in 2000 and things quickly went downhill thereafter. Bush junior made Al Capone look like a member of the aristocracy. Soon after, the gangsters pulled off their spectacular stunt on September 11th 2001, which enabled them to “stitch up” the American people with their Patriot Acts, and then attack Afghanistan and Iraq. Their total unaccountability and impunity is amply illustrated by the way they have repeatedly plundered the assets of the American people in recent years. They netted hundreds of billions from the sub-prime scam of the 2000’s, and when that came off the rails they simply claimed “too big to fail” status for their big criminal corporations which were bailed out at public expense by such measures as the euphemistically named TARP (Troubled Assets Relief Program), which in reality stands for “We screwed up and you, the people, are going to pick up the tab”. After that they concocted their QE and super low interest rate scam, which enabled them to borrow money at almost no cost to speculate in Real Estate and stocks etc. on a gargantuan scale and drive prices into the stratosphere, while the ordinary Joe who expected to be able to live off interest on his savings going into retirement was left with nothing and no choice but to live off his savings, either that or join in the …read more
From:: Common Stock Warrants
After a rough few months in the junior resource sector there are signs that the worst may be behind us and the seasonal tailwinds just over the horizon are a welcome respite for weary investors. Given the potential importance of this recent inflection point I felt it was a good time to have a conversation with Bob Moriarty and get his insights on investor sentiment and where we might be in the investing cycle. The conversation didn’t disappoint. Without further ado here is Energy & Gold’s July 2018 conversation with 321gold founder Bob Moriarty…
CEO Technician: You put out a couple of pieces in the last week which pointed out that everything is lined up nicely for a bottom in precious metals. Can you elaborate on what you’re seeing?
Bob Moriarty: Have you read the piece I wrote on July 6th last year?
CEO Technician: Yes.
Bob Moriarty: I called it absolutely accurately to the day last year. The problem with this year is that the exact cycle low is on the 12th (July 12th) but we had a full moon on the 28th of June. I think we’ve seen it, I think we’ve made the low. Monday they were running the stops, platinum was down $40 or so and gold briefly fell below $1240 in the August futures. Now they always run the stops before they run prices back up. I think we’re going to have a two month rally and probably go up $150 on gold.
CEO Technician: You think gold will be back near US$1400 again within a couple of months?
Bob Moriarty: Yes.
CEO Technician: Have you also noticed that the gold miners have been outperforming the metal itself recently? GDX is basically back to where it was a few weeks ago when gold was trading near US$1300.
GDX/GLD Ratio (Daily – 1 Year)
Gold miners have been outperforming gold since February and we’ve seen an upside breakout in the GDX/GLD ratio in the last week.
Bob Moriarty: Yes, that’s a good indicator. That’s the sort of stuff we see at the end of declines. Now i’m not going to say this is a bottom but I will say it’s a tradable low. I think we will see at least two months of upside. However, I will put one proviso in, I think we are going to see the crash of the century sometime in September/October.
CEO Technician: You think we’re going to have a crash in the broader stock market?
Bob Moriarty: Correct.
CEO Technician: What will the catalyst be for that?
Bob Moriarty: It’s going to be a combination of the euro, interest rates, and inflation. What we know is that the world is functionally bankrupt and there are so many potential flashpoints. It could start in Italy, it could start in Mexico, it could start in Venezuela. We’re due a crash, and when is the only question, not if. It’s going to happen and I suspect it’s going to be in September/October. So while I think we’ve put in a bottom in the precious metals sector and we’re going to have a nice move up for a couple of months, I highly recommend going to cash in early September.
CEO Technician: You think the crash will be a liquidity event in which anything that can be sold to raise cash will be sold?
Bob Moriarty: Correct. If you go back to 2008 I called the top fairly accurately in March 2008 but I didn’t realize the gold mining shares would be crushed as badly as they were in September/October 2008. So rather than a buy and hold strategy, I much prefer a trading strategy which would mean getting into cash around Labor Day.
CEO Technician: I was just on a tour of the Yukon sponsored by the Yukon Mining Alliance. I visited about half a dozen camps for companies such as White Gold (TSX-V:WGO) and ATAC Resources (TSX-V:ATC). One of the popular topics of conversation was the trade war between Canada and the US and how it might affect various aspects of the mining industry in Canada. There were a lot of questions being asked but not a lot of answers on this subject. What are your thoughts on Trump’s trade wars and how it could affect the mining sector?
Bob Moriarty: When you are transporting liquid nitroglycerine what do you want to make sure you don’t do?
CEO Technician: Ummm…you don’t want to spill it?
Bob Moriarty: Or shake it. You want to be really stable. I think a good analogy of the world’s financial system is 50 million tons of nitroglycerine. I think the people wondering what’s going on and not having answers are exactly right. Nobody knows what’s going to happen. I certainly don’t have any clue. I just know from an economics 101 point of view that trade wars are always a disaster. Trump has pulled the pin on a hand grenade and that’s a very dangerous thing to have done. You talked about liquidity, if Trump destabilizes the world financial system there will be a flight to liquidity and everything will get sold off. This is going to be an exceptionally dangerous time. Think about 2008 squared….or cubed.
CEO Technician: Wow. Switching gears back to the juniors, a lot of companies are doing summer exploration programs right now, particularly in the Golden Triangle of British Columbia and the Yukon (areas where it’s difficult to work during the colder months of the year). We’ve begun to see some Golden Triangle stocks and some Yukon stocks moving up in anticipation of exploration news. What are your thoughts on how to play the summer exploration news flow from an …read more
From:: Common Stock Warrants
After a strong start to this week’s trade, the U.S. dollar is on the back foot on the final trading day of the week, month, and quarter. The proximate cause for the buck’s weakness is good news overseas: specifically, the EU countries reached an agreement on migration, while the UK’s Q1 GDP was revised up by 10 basis points to 0.2% quarter-over-quarter.
Talk that U.S. President Trump is considering pulling out of the World Trade Organization (in contrast to the cooperative headlines out of Europe) may also be contributing the bearish sentiment on the greenback.
Technically speaking, the U.S. Dollar Index remains within its clear uptrend that has taken the index from around 89.00 in mid-April to a high near 95.50 yesterday. Some U.S. dollar bears have noted that yesterday’s peak coincides, to the pip, with the high from last week and posited that this could mark a potential “double top” pattern for the buck.
Source: TradingView, FOREX.com
While we agree this could ultimately prove to be a double top pattern, bulls may want to avoid flipping their outlook on the world’s reserve currency just yet. For one, the pattern won’t be confirmed until and unless rates break below the “neckline” (or the trough between to the two highs) at 94.20; until that time, traders may prefer to place more weight on the dollar’s established bullish trend.
More importantly, today marks the end of the second quarter, and quarter-end is a time when wonky things happen in the forex market. Because most global portfolio managers report performance as of the end of the quarter, they often use the last couple days of the quarter to rebalance their existing exposures and currency hedges.
If the value of one country’s equity and bond markets increases, these money managers typically look to sell or hedge their elevated risk in that country’s currency and rebalance their exposure back to an underperforming country’s currency. The more severe the change in a country’s asset valuations, the more likely portfolio managers are either under- or over-exposed to certain currencies.
Put simply, if US stock and bond markets outperform their European counterparts over a three-month period (as they have this quarter), large global investors end up with more exposure to the U.S. dollar by default. Therefore, they may look to sell or hedge the U.S. dollar to bring their currency exposure back to their target weights. Seen from this perspective, it would be strange if we weren’t seeing a dip in the dollar heading into the end of the quarter.
It’s also worth noting that the U.S. Independence Day holiday is next Wednesday, so many US traders will be away from their desks throughout next week. With liquidity at a low ebb, the dollar could see inconsistent price action (either larger-than-usual volatility if there are any market-moving economic developments or, more likely, slower trade than usual if there’s nothing to shake things up).
As you can see, market conditions for the U.S. dollar are a bit abnormal (and likely will continue to be in the next week), so traders should exercise more caution than usual when interpreting the price action in the world’s reserve currency.
About the Author
Senior Technical Analyst for FaradayResearch. Matt has actively traded various financial instruments including stocks, options, and forex since 2005. Each day, he creates research reports focusing on technical analysis of the forex, equity, and commodity markets. In his research, he utilizes candlestick patterns, classic technical indicators, and Fibonacci analysis to predict market moves. Weller is a Chartered Market Technician (CMT) and a member of the Market Technicians Association. You can reach Matt directly via e-mail (email@example.com) or on twitter (@MWellerFX).
From:: Common Stock Warrants
JAMES WEST: FIRST WAS CRYPTO, NOW CANNABIS, NEXT UP COMMODITIES
Canada has catalyzed the conversion of the Midas Letter from a mining centric to a broader multimedia digital platform that are now focused on video production. Recently they have focused on the hottest markets. Lately, that has been the cannabis industry. Canada has stolen the spotlight for this market, and they are working on a documentary about it. Midas Letter has launched a series of indexes for cannabis companies which have done well from 6.4x to 15x over the past couple of years.
He thinks the bubble in cannabis will burst as the cost of production falls later this year. Many “non-licensed” companies will deliver cannabis to your door very quickly at a fraction of the cost of the licensed establishments. Three billion has been invested into the cannabis space so far this year in Canada, and some forty plus billion has entered it over the last few years.
By mid-2019 a lot of money will flow into the resource sector. Gold currently is struggling and that may in part because of the younger generation has been looking at crypto. There is a broad perception that the days of fiat and commodity backed currencies are coming to an end. He doesn’t agree with that concept and is buying mining stocks.
Copper will be significant in the next cycle and to lesser degrees lithium and cobalt due to the electric vehicle revolution. Battery demand is driving demand for these materials. There is a risk of supply-side shocks with copper in Chile due to union demands. He discusses the various companies in the space.
Talking Points From This Weeks Episode
• The next commodity cycle will be different.
• Cannabis bubble is likely to pop in Canada later this year.
• Next resource cycle will be lead by Copper, Lithium, and Cobalt.
• Copper supply shocks are possible.
James West is publisher and editor of The Midas Letter, an independent capital markets entrepreneur and investor. He has spent more than 20 years working as a corporate finance advisor, corporate development officer, investor relations officer, media relations and business development officer for companies involved in mining, oil, and gas, alternative fuels, healthcare, internet technology, transportation, manufacturing, and housing construction.
From:: Common Stock Warrants
This is a great time to celebrate your Holidays with friends and family.
On Monday, July 2nd, Canadian markets are closed for Canada Day. US markets are open.
On Wednesday, 4th July, US markets are closed for the Fourth of July but Canadian markets remain open through normal hours.
Many of the Canadian resource companies have operations and personnel in Mexico which will elect a new president on July 1st. I personally don’t think any of our investments will be affected by a new president, but we shall see.
As you may recall, home for me is in Ajijic, Mexico where there are several events planned for both Holidays.
There are several thousands of Americans and Canadians living here but we/they are all proud of where we came.
On a personal note for me, I have lived here for 19 years. On June 22, after about a one year process I received my Mexican Citizenship and Passport, while retaining my U.S. Citizenship. As I now joke with my friends and family, ‘build the wall, I am legal on both sides’.
If you are one of my many subscribers, I greatly appreciate you business, if not, I encourage you to join me soon.
The rally in resource shares will start soon,
From:: Common Stock Warrants