Dollar Continues to Fall
Gold&Silver Power Ahead
The US Dollar is systematically being revalued and the Euro has been a major recipient as the largest component in the dollar index. The Euro set up looks similar to the 2017 run from May, here take a look:
Given what is going on here, either there is a fundamental known shift already in place with global central banks repositioning the US Dollar value or the general market dynamics sans paper derivatives selling of Gold and Silver have systematically taken it upon themselves to devalue the US Dollar. Gold and Silver continue their meteoric ascent, here is how far they have come since their March lows:
GOLD +$491.80, +34.0%
SILVER +$13.08, +111.1%
Here is where they currently trade, Gold +$36.0, Silver +$1.705 and Copper up marginally:
Now we look at this devaluation as the ultimate plan out of the Trump Administration which it fits nicely with their America First, Domestic Manufacturing Plan. What will be interesting is how a weaker dollar effects the overall Chinese economy as the Yuan is pegged, so a weaker U.S. Dollar also means a weaker Yuan globally. Perhaps any of our currency experts may want to chime in here. Currency pegs are curious because this costs the pegging administration capital in order to keep the peg. A weaker US dollar should cause the Yuan to rise vis a vis but if the CCP wants to keep the peg as is they will have to sell Yuan as well which would mean buying US dollars and or US debt potentially. These pegs are not guaranteed to run frictionless, there are a lot of moving parts to consider and volatility uptick can make the issue that much more pressing.
So we are seeing a global currency repositioning (all fiats vs metals devaluation) right now and add this among the already heightened global tensions from the lockdown’s and you can see how quickly this could escalate into something larger.
To say that the metals move and the currency moves here are anomalous is an understatement. We feel that a much larger reset is occurring and the risk is very high here for volatility, toss in the election in less than a 100 days, well you get our point. With the central banks on printing overdrive, one can only imagine where this all leads, Gold and Silver haven’t gone parabolic yet, but they might, the US dollar hasn’t lost 20% yet, but it might and we have to be cognizant of these known unknowns.
To quote the legendary Mark Twain,
“It ain't what you don’t know that gets you into trouble. It's what you know for sure that just ain’t so.”
Our Founders Subs will get our changes to the GFBP model as we are adjusting the Energy sector today. The model continues to be patient with the metals and wait for any simple pull back to get long. The model is also looking to lean on the Nasdaq vs the rest of the equity indexes and speculate just a bit that the ratios and butterflies are still to wide. Anyway we hope you enjoy our work and think about subscribing to get the full trader/investor experience.
Please continue to share our work with those that you think would benefit as we are all in this together, Cheers and good luck today traders and investors!
-Magnelibra Econemotions
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