Stocks resumed their rally last week after Janet Yellen reassured investors that things are so bad she won't raise interest rates any time soon. The Dow Jones Industrial Average jumped 277 points, or 1.6%, to 17,792.75 while the S&P 500 added 37 points, or 1.8%, on this idiotic "bad news is good news" scenario.
- Why the U.S. Dollar Rate Today Hit an 11-Month High
- A Market Circus Made by Policy Clowns
- Why I'm Still Short Miners (and You Should Be Too)
- The Stronger U.S. Dollar Is Actually Destroying the Markets
- Westerners Should "Be Very Afraid" of Friday's Chinese Yuan-IMF Decision
- A Yuan Reserve Currency Is Coming – Brace for a $2 Trillion Global Disruption
- WARNING: Record Global Sell-Off of U.S. Debt Could Trigger Economic Collapse
- The Only U.S. Dollar Move That Matters Now
- How You Can Win the Government's War on Cash
- How to Beat This Market’s “Three Cs” of Risk
- U.S. Dollar Drops as Global Stock Markets Decline
- China's Yuan Reserve Currency Plot to Depose Dollar Dates Back Years
- Peter Schiff on U.S. Dollar Crisis: "The Dollar Bubble Is Going to Burst"
- Currency Wars: China Now Has Unprecedented Control Over the U.S. Dollar
- [WARNING] China, Russia Create Own Gold Market to Take Down U.S. Dollar
- A Failure of Iran Nuclear Deal Could Upset Global Dollar Hegemony
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The industrial commodities complex is riding the crest of this infernal "bear market rally." This is unlikely to last. I'm still bearish on the commodities, and with good reason.
Today I thought it would be worthwhile to check in on a few of the short plays I recommended on miners last year and put their "improved" status into perspective.
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The U.S. dollar remains the most important financial instrument in the world. The dollar rally has been the single most decisive factor in determining economic growth (or weakness) and market direction since early 2014.
Right now, that’s not a good thing. A stronger dollar has a far-reaching, negative domino effect that pressures global markets in all directions.
China's yuan was just awarded reserve currency status. This was the precise event former Wall Street banker Evander Smart warned of in September:
"If you live in the West, and this goes down, be afraid, be very afraid," Smart wrote in an op-ed for "future of money" site Coin Telegraph on Sept. 10. "The world is starting to prepare for life without the dollar and westerners should, too!"
Inclusion into the IMF's $280 billion basket of currency reserves alongside the U.S. dollar, the Japanese yen, the British pound, and the euro, becomes official on Nov. 30.
As an SDR world reserve currency, the Chinese yuan is now legitimized as a serious competitor to the U.S. dollar.
It's almost certain a yuan reserve currency will become reality 11 months from now, triggering a foreign currency shift of as much as $2 trillion - an existential threat to the U.S. dollar's status as the world's primary reserve currency.
Last week, Bloomberg reported that International Monetary Fund (IMF) officials have told Chinese officials that the yuan will join the organization's basket of reserve currencies "soon."
Foreign governments buy U.S. debt because of its status as the world’s reserve currency – the American economy has long been viewed as a safe place to invest.
But that’s all changing now – events that could spark a U.S. economic collapse are already underway…
The Wall Street Journal revealed this week that China – the largest holder of U.S. investments – is ridding itself of its U.S. investments at the fastest rate in history. Central banks in China, Russia, Brazil, and Taiwan are selling U.S. government bonds at such a pace that it’s caused the most dramatic shift in the $12.8 trillion Treasury market since the 2008-2009 financial crisis.
Foreign central bankers’ massive offloading of U.S. debt sends a dangerous signal.
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You might think the U.S. dollar is going to crash. That makes sense as the value of paper currencies continues to be destroyed by central banks trying to reduce their debt.
But the dollar's been getting stronger since 2014. And if it moves up through its next resistance level, it would rock financial markets.
Most point to the bankruptcy of Lehman Brothers as the main trigger of the 2008 financial crisis.
Perhaps equally as important, but certainly not as well-covered, is what happened the following day...
That's when Reserve Primary Fund, one of the original and largest money market funds, saw its $785 million of Lehman holdings revalued to zero. Naturally, redemptions soared.
The fund's net asset value fell from $1 to $0.97 - a rare case of "breaking the buck," and redemptions were frozen for seven days.
As people ran for the exits from the 2008 meltdown, eventually almost 25% of money market assets sought redemption.
Liquidity instantly went from a waterfall to a trickle, and the financial system was pushed to the precipice.
With the crunch on, cash suddenly became extremely valuable. That was duly noted by central banks the world over. And those frozen redemptions give us some clues as to what lengths the authorities will go in order to achieve their aims; they're more determined than ever to do away with physical cash.
We now have some compelling evidence that central bankers are pushing to eradicate physical cash completely - and it's not for your benefit.
The last few weeks of trading have been downright rough...
The markets staged a "whistling past the graveyard" rally for a little more than a week after the Aug. 24 crash only to come tumbling down again by 3% on Sept. 1 as nearly every sector was hit.
Robust technical support levels that were years in the making have been snapped like so many little twigs.
Key indicators have all but failed traders who are scrambling to find bottoms to trade off of, and the Chicago Board of Options Exchange Volatility Index (VIX) has been breaking six-year records, topping 53 on Aug. 24 and 30 on Sept. 1.
The sheer breadth of the chaos is matched only by the growing chorus of pundits speculating on the drivers of the chaos.
Let them speculate and fumble around in the dark. What's really rocking this market is what I call the "Three Cs."
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U.S. Dollar Drops Today: The U.S. dollar fell against the yen and euro yesterday, after global markets had another down day.
The Dow Jones Industrial Average was down 114 points Monday and another 400 points early Tuesday. The Stoxx Europe 600 was down 0.4% Monday, while Germany's DAX slipped 1%.
China has long-planned for a yuan reserve currency to undermine the U.S. dollar.
The People's Bank of China (PBOC) made its first move as far back in 1994 - more than 20 years ago.
And the years of planning have paid off. We're only a year away from a yuan reserve currency now.
Peter Schiff, economist, best-selling author, and CEO of Euro Pacific Capital, believes a U.S. dollar crisis is underway.
"The dollar is very overvalued...and the dollar is a bubble," he told Newsmax Prime on Aug. 11. "This dollar bubble is going to burst."
Indeed, two weeks later and Schiff's prediction proved timely. The U.S. dollar index has suffered a fourth-straight loss, and U.S. markets have plummeted in the worst weekly sell-off in four years.
China fired a shot heard 'round the world Aug. 11, stoking fears of what could become the ugliest of all currency wars. In a surprise move, the country massively devalued the yuan 2% - its biggest one-day devaluation in 20 years.
China's yuan devaluation will have more than just that immediate impact - it gives the country unprecedented, long-term control over the U.S. dollar.
China and Russia have finally had enough of Western central bankers' clandestine gold market manipulation to prop up the U.S. dollar.
F. William Engdahl, an American-German economic researcher and best-selling geopolitical author, was quoted by business blog Sputnik on Aug. 16. He said that Russia, China, and other emerging economies are involved in & the genial move & to establish an entirely different gold market.
& They stand to add to the new energy surrounding a renaissance in gold as a support of solid, well-based currencies to replace the diluted and devalued dollar system...&
There's a lot at stake in the recent Iran nuclear deal.
And it's not just about hard feelings or the possibility of Iran attaining nuclear weapons capability.