The world hates the US Dollar. Why? The US Dollar has been the world’s reserve currency since after World War II and foreign governments have been forced to use the dollar for international trade, which has allowed the US Government to impose its hegemony (dominance) over the world. The US has become the world’s bully and imposed its own political and cultural agenda on everyone else.
Foreign countries led by China and Russia are fed up and a global plan has been introduced to remove the dollar’s dominance and replace it with a more balanced currency made up of multiple international currencies. That currency is shaping up to be the SDR or Special Drawing Rights issued by the IMF or International Monetary Fund.
Up until recently, US Treasuries were required to be held in reserve by foreign countries as collateral for international trade, however, today US treasuries are becoming less desirable by foreign governments and many are selling their treasuries in record numbers.
Mexico has sold billions in US Treasuries in the past year and China, Russia and many other countries are also joining the bandwagon and selling billions of their US reserves each year.
But reducing dollar dominance is not the only reason to sell foreign treasuries. The US government is bankrupt and has shifted from being the largest creditor nation to the largest debtor nation in the world.
Foreign governments know that the US dollar is losing value and will eventually be replaced as the world’s reserve currency. October 1st of this year will be the first step as the Chinese Yuan is added into the basket of world reserve currencies that make up the SDR.
In addition, our central bank policies have replaced the natural laws of the free market system and have abused the laws of economics by artificially elevating the equity and bond markets while ignoring the general economy as a whole.
Their massive bond buying Ponzi schemes along with negative and historically low interest rates have created huge mal-investment in the US economy which has created huge bubbles in the stock, bond and real estate markets.
As a result, true and natural price discovery is dead in most markets and investors now look to the central bank for guidance rather than the natural fundamentals of a free market. Socialist central bank policies now rule the economic world as they play by the same play book of all the failed socialist economies before them. History and human nature repeats itself.
The US is not happy about these changes in global monetary policy because they know they will lose their power over the world’s monetary system. As a result, the neocon’s within our government keep beating the war drums accusing those trying to reduce the power of the US dollar, mainly China and Russia.
It amazes me how the average person doesn’t see it, but then again, the average Joe is typically ignorant to the way economies and governments destroy the freedoms of the populace in order to enrich the politicos with help from their massive propaganda machine.
The writing is on the wall for this country. The country that I love is dying and sadly no one is the wiser.
Look, I know you guys are losing patience over the current price of gold. We are all frustrated by the constant downward pressure forced on the price of gold by the central banking cartel, but if you look closely, you can see that the interventions are having less effect on price as we have recent higher lows that are forming right along the major bull market uptrend line in red.
I told you last week to expect an attack by the cartel as we had options expiry this week and sure enough, just like clockwork, they hit gold and silver just like they have done every month prior. A successful trader knows how to be patient and eventually our positions will pay off.
Next week will be the beginning of a new upswing, especially after tomorrow’s 4pm EST IMF meeting regarding the inclusion of the Chinese Yuan in the SDR basket of currencies. They chose 4pm on Friday, after the US markets close for a reason and I think we’ll see a reaction in the markets on Monday.
We are still in a classic bull flag pattern and once gold breaks the upper blue trend line, we should see a steady rise to new highs. Once the price reaches the 1400 level and holds, expect a rather quick move to the upside from there.
One thing is for certain. The Fed will do everything in their power to hold the economy together until after the election. They will try to make everyone think things are just hunky dory until after Hillary is crowned as queen.
If that doesn’t happen and Trump somehow pulls off a win, all hell will break loose. That way they can blame the collapse on Trump. Hang in there, things are really starting to heat up and the global economy is just hanging by a thread. Once it implodes, your precious metal positions will light up!
Stock Market: (SPY) (QQQ)
There is a tremendous amount of negative energy in the stock market right now and the Fed is desperate to keep things from coming unglued before the election. (Take note of the headlines below.)
The stock market is right on the verge of breaking the latest uptrend line and once it does, we can expect to see a major retrace down from there. The Stochastic Oscillator confirms that we are due for a downtrend as it is showing extreme overbought conditions.
Energy Stocks: (XLE) (UNG) (USO) (LNG)
Oil has broken through the upper trend line of the megaphone pattern. This would normally signal a major move higher from here and a lot is happening in the headlines regarding the potential for a production freeze from Saudi Arabia, Iraq and Iran in November.
That being said, these countries are having a hard time agreeing to any production cuts, as both Iran and Iraq depend on the sale of oil for the general welfare of their economies. As a result, this agreement to cut production is fragile at best and come November, I wouldn’t be surprised to see the price of oil come tumbling down again.
In the short term, we may see our technical pattern play out with a short rise higher in October before the final outcome of the November meeting is revealed.
For aggressive traders, this might be a good entry point for a quick short term trade, but don’t hold your breath for a production cut deal to send oil skyrocketing.
(SLW) January 2017 CALLS
(GDX) January 2017 CALLS
(RGLD) January 2017 CALLS
(SPY) December 2016 PUTS
Pain Spreads To Germany's Second Biggest Bank: Commerzbank Scraps Dividend, Fires 20% Of Workforce
With Deutsche Bank mercifully missing from overnight headlines for the first day in almost two weeks, it is time to bring attention to Germany's second largest bank which, as a Handelsblatt leak cautioned earlier in the week, confirmed it is also going through a historic rough patch.