The "collective consciousness" as some have called it in the past, the market is an almost perfect diagnostic tool for determining where we are and where we're going. Millions of minds in their buying, selling, and even political voting decisions determine what we value as a society collective. We can see this everyday on charts — the price of stocks, bonds, commodities, forex etc. all reflect what we value. The needs and wants of society tend to repeat, and charts can illustrate these with the patterns they create. Today we see a pattern that hasn't repeated since 2002.
The US Dollar Currency Index (DXY) broke its uptrend it had been making since March 2008. It dipped below the trend line in July and has attempted to recover back above $95, but has failed to and will fail to recover (see DXY September 2002). Looking at the Dollar in 2002, the same pattern had occurred. The dollar broke its uptrend in June and recovered only back to the underside of the trend line. On October 28th 2002, the DXY broke down and started a six year downtrend. GOLD as a stable store of value started its uptrend on the very same day, the 28th of October 2002 and has climbed from $320 to $1900. This is no doubt attributed to the large amounts of currency printing by the Federal Reserve over the last 20 years. In these 20 years we have experienced 3 major economic crises: the Internet Bubble, the Great Recession, and now the global Covid-19 pandemic. In all of them, printing money has been the solution.
Today a month away from an important presidential election the DXY is a month away from resuming a downtrend, GOLD a month away from resuming an uptrend, and Bitcoin a month away from starting a new bull run. The policy of printing money and devaluing our dollar has been the standard for decades now and presidential candidate Biden hopes to continue that legacy. All eyes will be on this election in November and it will greatly influence the movement of hard currencies and stable stores of value. At this critical economic pivot point it would be prudent of anyone to hold cash, wait, and continue to watch Biden, Gold, & Bitcoin.
How can the dollar be anything but toast for either party? Another two trillion as part of the mix? My understanding is a debt to GDP ratio of 130% makes resolving the deficit an absolute impossibility without a reset and will eventually lead to the end of the dollar.
Stone881
⋅
A fan of history could clearly see that dollar is weak in Republican administrations and strong in Democrat, going back at least to Reagan. So while I do agree with you on most of this post, I think you have it wrong w regard to Biden.