Pay Attention! The US Dollar is at a very important price point!

Happy start to 2021 Friends! I hope this chart finds you having a blessed start to the year.

I'm sure we have all heard the expression, old resistance turns into new support. Well this has indeed particularly been the case in the dollar, and the visual of it becomes distinct when we overlay the dollar on a monthly TF with our Fibonacci levels.

This analysis took a great deal of research to put together so please be sure to like & comment if you found this content resourceful!

We see a few things here observed within the chart:

• We are at a massive make or break point on where the dollar is headed
• We have arrived at a long time support/resistance level on a high TF
• The ema trend is clearly bearish
• Bear flags forming again on the daily TF
• Commodities and equities and crypto are all continuing to rise in value relative to the devalued US Dollar
• US Dollar was moving in a rising channel however all the stimulus has resulted in it knocking back to 2018 lows/ 2009-2010 highs.

The theory of a 'deflationary' environment I think at this point is totally out of the question. I personally imagine the dollar to continue to erode away after a small bounce here on long term support, until we finally see the Fed raise rates. Until rates are raised I imagine this will continue to drop.
I have read and am well aware of the fact that "QE did not create inflation", and I can certainly agree QE did not create hyper-inflation like all the Austrian economist were preaching - however inflation is certainly occurring and I think the best place to get the most real gauge on inflation is to see the yield on stable coins - coins pegged to the USD - especially credible ones like USD Coin backed by Visa. If you think, "well that is fringy Zen" - then you have your head in the sand because as of this week "US Banks can now Run Nodes for Stablecoins" - this essentially enables financial providers to use a better, safer, faster product then the legacy ACH /SWIFT process of yesterdays. Citation of this available below.

So why does this matter to you as an individual? The biggest and most shocking reason in my opinion is the yield on these stable coins and if I shop around and look on different platforms with different cryptobrokers like Coinbase, Binance we see some modest yield, but some DeFi platforms like Yearn.finance & Zerion what we see the market rewarding dollar 'hodler's' with is shocking:


• USD Coin: 6-13.31%
• DAI 14.6-18%
• USDT 7.6-11.03% (Yes the infamous tether has LOWER yield then the Visa backed play)
• TUSD 3.6%
• WBTC 0.0653%

I am NOT recommending you do anything at all or invest in any of these things, I think the dollar is going to find temporary support and then sell off very slowly over potentially years until the Fed raises rates. I anticipate rates will be raised to combat inflation in 4 years. My point in bringing this up is the new indicator we have available for gauging inflation by looking at the yield of the USD itself.

The implications as far as I can see, especially with the added institutional adoption is that the USD is currently experiencing very real inflation that is much higher than the 2% target we are hearing about in FOMC meetings. I believe the yield provided holding these stable US Dollar Coins is a great new indicator for the actual inflation the dollar is facing. I am not recommending buying them or anything, but rather want to clarify that there importance is in utilization as a new indicator. I likewise believe we need to pay heed to the amount of risk at play when we look at fixed income yield relative to yield in holding a product in parity with the USD. Within my bond portfolio, was taking on risk in American Airlines for a 8% yield, and Delta yielding 7%, FedEx 2%! The amount of risk in those bonds is far higher then the USD itself. I feel like these new products will be very disruptive to traditional finance.

For those wondering, and I made the comments in earlier ideas below, but I closed the entire bond portfolio and moved it into ETH throughout the month of October-November.

Dare I say it, at the start of 2020 in need of some liquidity I was in a 3M CD offering a rate of 0.2% (this was to help with the inflation bite). Keep in mind this new USDC is compatible with Bank Wires and ACH already. I feel like the infrastructure of this all was built so swiftly and quietly it crept up on us all fast.

This brings up an important concept when looking into the fine print of the Visa/Circle backed digital dollar: "Each digital dollar is backed by cash and short-term US government treasury bonds, not fractional reserve commercial bank money. Reserves are governed by the Centre Consortium" - fascinating right?! "Not fractional reserve commercial bank money." I think this is how we need to realize they are offering this much yield. The structure of the greenback, the engineering itself of it is undergoing an evolution that is clearly spelled out here right off the VISA backed Circle website. I will offer a citation below.


There website goes on to say: "Digital dollars like USDC work like other digital content — they move at the speed of the internet, can be exchanged in the same way we share content, and are cheaper and more secure than existing payment systems. We use cloud infrastructure and blockchain networks to scale dollar storage and movement."

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Please be sure to tell me why I may be wrong friend! If you disagree please kindly let me know what I might not know about and should add to the analysis! I'd love to know how you are strategizing in this environment? Running into gold & silver? Longing energy? Do you think Bitcoin is the destination?

Love the TradingView community, and it aids us all when you share your expertise and likes guys!

Good fortunes to you dear trader! If you have your own charts on the dollar please share them with me & our amazing community so we can learn together!



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Citation:
https://www.marketwatch.com/story/crypto-prices-jump-after-u-s-regulator-says-banks-can-use-stablecoin-connect-to-blockchains-11609811050#:~:text=Cryptocurrency%20prices%20briefly%20popped%20late,as%20nodes%20in%20a%20blockchain.

Again not recommending this to anyone, and this is for businesses not customers even and I am only adding this as a citation for my comment not to market or anything for VISA, it is simply for credibility for the research submitted here:
https://www.circle.com/en/features/yield