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Currency

The Dollar Bull Overstays Its Welcome

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Posted by Roland Watson

on Thursday, 22 December 2016 08:14

Back in March 2008, as the Credit Crunch was biting, the US Dollar, as measured by the US Dollar Index (USDX), was bottoming after a drop of over six years fuelled by the War on Terror. Silver had previous topped out at about $21 and was later to visit $50 as the dollar faced the abyss again just above the 70 level. To date, that level has been the all time low for the USDX.

USD INDEX

Looking at the 45 year chart for the USDX, it is clear the dollar has been on a downward trajectory interspersed with some rallies since 1985. As of 2008, the dollar has been in an 8 year rally. It is no coincidence that gold and silver have struggled during this time and precious metal investors will be wondering when the dollar will resume its 31 year bear?

While writing for subscribers on the US Dollar, another look at the USDX chart suggested that the dollar bull was beginning to outstay its welcome. Lines have been drawn between each high and low to highlight each dollar bull and bear.



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Currency

US Dollar & Gold

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Posted by Ross Clark - Institutional Advisors

on Wednesday, 21 December 2016 08:12

We continue to monitor the seventeen-year cycle in the US Dollar Index and its relationship with gold. Looking at gold since the Dollar bottomed in May, the patterns of 1999, 1982 and 1983-85 are a close match. The Fibonacci levels come into play in each instance. 

The October 7th low at $1242 (labelled level 50 on the chart) was the last support before gold broke the May 31st low of $1199. It is deemed to become the midpoint of the eventual decline. The resistance level at 76% was a test of the previous support around $1310 during the summer. April and May become the 38% level in the pattern. The measured range for the downside move is $1105 +/- $5. 

Screen Shot 2016-12-21 at 6.45.35 AM

...view entire analysis & large charts HERE



Currency

Yuan's Day of Reckoning

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Posted by Michael Pento - Pento Portfolio Strategies Strategies

on Tuesday, 20 December 2016 07:53

China's economy and markets have been defying the laws of economics since 2009. Amid a worldwide financial crisis during that year, they managed to grow their economy by 8.7%. But that growth was fueled by a $586 billion dollar government stimulus package, which was followed by an additional $20 trillion dollars in new construction spending over the next seven years.

China's economy became the envy of the world as the economy expanded through the edict of government to build massive cities that were mostly vacant. In fact, estimates are that 52 million homes in China are currently vacant and 90% of those empty units were purchased for investment purposes.

As investors sat on empty real estate, debt levels in the shadow banking system rose to troubling levels. A real estate bubble of this magnitude would bring most economies to the brink of destruction. But fear not; the megalomaniacs in Beijing had a solution: in 2015 they created a new bubble in the stock market to offset the fragile real estate bubble.

And to accomplish this, 40 online brokerage lenders helped arrange more than 7 billion yuan worth of loans for stock purchases.

As you can imagine, China's leverage problem quickly reached epic proportions. Fueled by margin debt the Shanghai Composite (SSE) started 2015 at 3,234 and hit 5,023 by June 4th; a 150% surge from the preceding 12 months, before plunging.

Shanghai Index:

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Currency

US Dollar Powers To a 14Yr High

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Posted by Michael Campbell & Victor Adair

on Monday, 19 December 2016 07:49

Victor on the recent collapse in Precious Metals that motivated him to cover his short position. More on the CDN Dollar, 14 yr high in the US Dollar, 14 yr low in the Euro, Stocks, Bonds and a market that has made a big move producing a big opportunity - Crude Oil

....Michael's Shocking Stat: Astonishingly Large Numbers Courtesy of Youtube

Traders

 



Currency

War on Cash Spreads to India

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Posted by John Browne - Euro Pacific Capitalital

on Thursday, 15 December 2016 07:12

new-world-order-war-on-cash-900x350Over the past year, central banks, commercial bankers and prominent economists have expressed the view that digital money and transfers should replace large denomination cash and cash transactions. This dramatic transition has been fostered under the guise of the public interest in an effort to curb terrorism, tax evasion and criminal activity. Many observers contemplate more sinister motives that involve increased government control of economic activity. The latest country to engage in this 'war on cash' is India.

In a TV announcement on November 8th, India's Prime Minister Narendra Modi announced that the Reserve Bank of India's large denomination 500 and 1,000 rupee bank notes, worth some $7.5 and $15 respectively, would lose their status as legal tender on midnight on December 31, 2016. That meant holders of those notes (which represent 86 per cent of the value of all outstanding rupee notes) had less than two months to exchange the notes for smaller new notes, or lose out completely. The government also mandated than any large exchanges had to be accompanied by tax returns in order to prove that the cash generated had already been taxed.



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