Currencies wars have never stopped, Trump needs dollar lower, but everyone else wants their currencies lower also, and China has had just about enough of this pattern, looking to lower theirs for a change, hence the Trump V China currency war. Fed wants to raise, cant get inflation or wages to increase, need a stronger dollar to raise too. Lets see, who usually wins these tussles? Oh yeh, the banks. And all that big fat money talking up the big game of buying the xlf, and options in xlf. But whoops, it didn't happen, and the big bank bet didn't pay...yet. Catch 22... Trump needs dollar lower for longer, and banks need a stronger dollar for their profits, and all those Goldman boys screaming in his ear. Jobs? Create jobs? How does he do that with the AI and tech replacing humans - headwinds? He can't, not enough anyway. People are not stupid. Or at least anyone with half a brain, skills, experience, and not afraid to roll up their sleeves, and value the results. Besides, they were too expensive, and corps laid gave them packages to leave/retire. These folks have dropped out of the workforce, which is why wages won't increase, they are all low paying jobs requiring no experience, which of course, high school and college grads DO NOT HAVE. Corporate US has ended its value on hiring humans, robots are cheaper, and do not form unions (yet?). Here's the lower PICTURE... LOWER wage dollars mean lower inflation for longer, means no raising rates maybe even lower later (yes rate decrease), means the only thing they can do, lower balance sheet, results in lower equities. Unless of course, the dollar rockets upward due to currency wars (and not inflation), which would let the FED raise, which would simply and absolutely crash equities. There is no solution that keeps this bull market running. Bears are growling, and are starving.
Simple chart fact. Every time there has been a severe and quick change in China currency strength, equities drop.
Note the correlation change recently between this pair and stocks. They were synced and now Oppo, so when dollar bounces, stocks will tumble. Also note the flow to big cap, as perhaps a final rotation money flow to stocks safety, waiting for the sell signal of all sell, signals, to cash. Gold may not know which way to go, and be confused, with rising dollar and no inflation, weird combo. Bad combo.
Final thought, we need higher oil for inflation, do NOT see that happening, tech usage headwinds for that, people just using less of the black gold (electric cars, tele conferencing) , and its going to get worse.
Simple chart fact. Every time there has been a severe and quick change in China currency strength, equities drop.
Note the correlation change recently between this pair and stocks. They were synced and now Oppo, so when dollar bounces, stocks will tumble. Also note the flow to big cap, as perhaps a final rotation money flow to stocks safety, waiting for the sell signal of all sell, signals, to cash. Gold may not know which way to go, and be confused, with rising dollar and no inflation, weird combo. Bad combo.
Final thought, we need higher oil for inflation, do NOT see that happening, tech usage headwinds for that, people just using less of the black gold (electric cars, tele conferencing) , and its going to get worse.