Credit expansion period has finished in 2008, what became the lowest turning point for DXY. Credit contraction means no way for USD devaluation, so it can only rise from there. No credit expansion means no inflation, whatever central banks are doing is not inflationary (see "Steven Van Metre" youtube channel ) despite majority perceives "money printing" should lead to it. This wrong perception by the public is reflected on the chart as correction wave 2. Pretty soon dollar uptrend will resume smashing stock market and gold.
Comment
⋅
Looking at the structure of the wave 2 (red) it seems more like a flat or flatish zig-zag (the first sub wave A seems having 5-wave structure). But both flat and zig-zag should end up with a final wave C subdivided into 5. So we should be expecting the move from March 2020 top to form a proper motive wave. Normally RSI shows divergence with price chart on tipping points of wave 3 and 5, as seen in Sep 2017 and Feb 2018. But it does not show divergence now, what leads to the idea that downtrend started in March is not yet over.
Of course there is inflation, it is seen in nearly every good, except perhaps electronics and oil. Show me anything else that costs less today than it did in 2008? And don't just spout off the government statistics, which are adjusted at will by the powers that be.
Kupitman
⋅
@Stone881, obviously the price of goods/services increased since 2008. I had the same view as yours, but we probably need to be careful with definition of inflation and consequences on macro economy. As the public we treat any price increase as inflation, but it is not the same for FED. Price increase could be result of regulation (COVID related), (import) tax or even income grown/work force price in China. For FED inflation is correlated with business activity and credit expansion/contraction. 10 year of QE did not improve business activity and did not resolve the issue of continuous credit contraction, it only inflated asset prices. As nicely explained in YouTube channel I referred above, FED does not create money, money creation is result of credit expansion, that's why we have not seen let's say significant inflation. All the talks about USD goes to 0, are wrong. USD is the reserve currency and the world needs it. During credit expansion more and more USD are created, but during credit contraction USD disappears with with a speed of multiplication with every credit paid out or defaulted. USD has no way but appreciate during credit contraction that is the main message.