Since Trump's election, US dollar has eroded badly

Trump has been bragging about the stock market's gains, but what we don't hear about is the fact that the US dollar has eroded badly. Since his election the dollar has fallen to a 3-year low.

Trump is destroying the US dollar.

I called this at the time of the election and I said it was based, at the time, on two things. 1) Trump's  proposed expansion of fiscal stimulus. (More spending and tax cuts.) And, 2) the ongoing rate hike campaign of the Fed, which is inflationary and therefore NOT bullish for the dollar contrary to what most people believe.

Since then a new and far more corrosive element has entered the picture and that is the Trump Administration's aggressive use of sanctions. This is what I have called the "weaponization" of the US dollar.

This has set in motion an irreversible trend of "de-dollarization." The Rest of the World has no other choice. The USA's use of sanctions designed to limit or completely shut entities or entire nations out of the global, dollar-based transaction and clearing system is too great a risk. Even US allies can be indirectly affected by the sanctions' policy.

Alternatives will be sought. We see this in the rise of new, bilateral trade and clearing arrangements (Russia-China, China oil trading in yuan, etc.) We also see this in rise of Bitcoin and other cryptocurrencies, which I believe, reflects this trend toward de-dollarization and it will continue.

Trump will go down as having presided over the greatest period of dollar depreciation in history. Watch.

Since Trump, US dollar is getting killed.

Trump may be reveling in the stock market's gains since his election victory, but the dollar is going in the other direction. It is getting killed.

When Trump was elected the Dollar Index was at 98. Now it's at 90. Dollar/yen was at 118, now it's at 110. Euro/dollar was at 1.04, now it's at 1.23. British pound was at 1.23, now it's at 1.37. Canadian dollar was at 1.36, now it's at 1.24.

Trump has been a disaster for the dollar.

What's more, the dollar's fall is still in its early stages. With his monkey idiot Treasury Secretary, Steve Mnuchin, and the endless sanctions on everybody--the literal weaponization of the US dollar--these fools have set in motion a powerful trend of global "de-dollarization."

It is becoming plainly obvious to countries and institutions around the world that the risk of being shut out of the global, dollar-based transaction and clearing system is too great so alternatives are being sought. This is one explanation for the rise of Bitcoin and other cryptocurrenices. You can also see it in newly emerging bilateral agreements between nations, such as China and Russia, where transactions and trade are being conducted in ruble and yuan.

Add to this the fiscal stimulus of the tax cuts (money printing) and the Fed's rate hikes which they stupidly believe squash inflation. (5 rate hikes since Dec 2015 and inflation up, dollar down, gold up, oil up.)

It's over for the dollar. Trump and Mnuchin...the tag team that will destroy the dollar.

Get short, everybody. Get short.

The dollar is toast

The United States has just imposed sanctions on Venezuela because it does not like the outcome of the Venezuelan election. 

That's sanctions on Russia (3 times), Venezuela, Iran, North Korea, Syria and who knows how many other countries. These sanctions are forms of economic warfare. 

Their goal is to lock these countries out of the dollar-based financial system of the world. How long do you think people will continue to want to "net save" in dollars when they are potentially subject to indiscriminate seizure of their assets and blockage of the ability to transact commerce? 

Not long. 

I predict an end to the dollar's role as global reserve currency very quickly. 

The world won't tolerate the risks of net saving in dollars anymore. We have signed our own death warrant here because of our incompetent and clueless moron "leaders." When I am president this will all be reversed.

What f'cking hypocrisy.

Saudi's continue to take on dollar loans. How long will they hold the riyal peg?

Saudi's just took on another $10 billion in debt from international banks. While that's small potatoes, it continues to add to a growing pile of foreign debt.

Low oil prices have drained their budget: the Kingdom is now running deficits. They're also maintaining the riyal peg to the dollar at $3.75.

How much cash are they willing to burn to keep maintain this peg? On the one hand they're selling dollars and on the other hand they're borrowing dollars...to sell?

Crazy shit.

I can't wait 'till this country implodes and the people there chop of their motherfucking rulers' heads.

We got it ALL correct. Here. At MNE. Not anywhere else. Not even at other MMT sites.

We were following flows, not defiicts.

We got it all correct--the economy, stocks, gold, the dollar. Go back and do a search here on any of these terms and see how we called it. And you didn't have to wait three years (or more) and watch markets and economic forecasts go wrong in your face.

We called it precisely.

No need to go anywhere else.

After 8 years of a rally the NY Times just now talks the dollar bull case. It's over.

HEADLINE INDICATOR...HEADLINE INDICATOR...HEADLINE INDICATOR..BLEEP, BEEP

After 8 years of the dollar going up the NY Times talks bullish on the dollar. It's over folks.

I said in the latter part of last year the dollar was going to peak

I said that when the Fed raises rates the dollar will start heading down.

I said based on the fiscal picture developing now (NOT any "harder to get" b.s.) the dollar is going down.

This is proof. Sell the dollar. Oh, wait...you don't trade Forex??

THEN BUY  MY FOREX VIDEO COURSE!

HSBC forecasts lower dollar in 2016, as I did months ago

HSBC is now forecasting the U.S. dollar to decline in 2016. I made this call months ago.

They're catching on to some of the arguments I made here and also some of the things that I teach in my Forex course. Namely, that rising interest rates are bearish, not bullish, for the dollar. (I'm not sure  they really understand why, however.)

Anyway, I am building a short dollar position at the current time. This trade would have been doing much better right now were it not for all the China related panic and falling commodity prices, but people are buying dollars for all the wrong reasons, I feel.

Patience is the key, here.

Very strong jobs report. Blew away all forecasts, including my own! The deficit's too small?

The jobs report was incredibly strong. Nonfarm payrolls rose by 268k, blowing away even the most bullish forecasts. The dollar has rallied to a six-month high.

Those MMT people who have been saying that "the deficit is too small" really have to stop now because they are totally discrediting themselves and making MMT look stupid.

We have been correct here at MNE all along, emphasizing top-line government spending as the key indicator.

I admit, however, as having taken a wrong turn recently on the dollar. I was bearish. Maybe it was all that, "making the euro harder to get" nonsense. People have to admit their mistakes or they have zero credibility as far as I am concerned.

Budget deal is unequivocally bullish for stocks, economy. Buy the S&P and take a vacation until March 2017.

The biggest negative factor that we have been talking about here--the debt ceiling--is now out of the way until March 2017. We are in the clear, having averted what could have been a disastrous default of the entire U.S. economy.

With this new budget deal the amount of fiscal stimulus will be significant. Not only does the Congressional Budget Office anticipate a spending increase of over $230 billion over the next two years, the additional spending of $112 billion implied in this budget deal means that spending over the next two years will rise by nearly $340 billion.

That is significant and it means two things for sure:

1) The economy WILL NOT go into recession

2) You can go buy stocks now (buy the S&P Index, it's simpler) and basically take a vacation until March 2017. You will be handsomely rewarded.

I don't care what anyone is telling you about the deficit, they are going to be wrong. And if I end up being wrong here in my prediction, feel free never to read this blog again or mock me from now until forever.

Oh, and one more thing...the dollar will fall because some pricing power will return to foreign exporters. And if and when the euro rises it won't be because it has become "harder to get." It's all about price, not quantity. People should know that.

P.S. If and when the Fed raises rates (and they will) that will be an added fiscal stimulus. Those who have been saying here, that it doesn't work that way, can also call me out as ignorant if it in fact doesn't end up to be bullish.

Turkish lira drops sharply against dollar because of horrific events, but I am buying it right now.

The Turkish lira has just opened up sharply lower against the U.S. dollar because of the horrific bombing that took place yesterday. However, the dollar's fundamentals are weakening so I am buying the Turkish lira right now. (Selling, USDTRY.)

 

Remember, my online Forex course is coming up, Oct 19-23.

Things are getting very tense. The dollar is headed down, big time. Sign up for my Oct 19-23 Forex course and cash in on what will be some very big moves!

Things are very tense. The debt ceiling. Syria. ISIS, Russia. American neocons. Very scary indeed and to me, it looks like one major casualty will be the U.S. dollar.

If you haven't already taken my course, now is the time. October 19-23. Online.

Click below for more information.

Canary in the coal mine? Dollar suddenly collapses against the Turkish Lira.

When emerging market currencies start rallying...

Jim Rogers: mind blowingly perfect when it comes to being wrong!

After years of telling us how the dollar was going to get killed because of Fed "money printing" he inexplicably gets bullish at the top. Amazing!!

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Dollar showing signs of weakness

The  dollar  is at a 3-week low against the Aussie and British Pound. It's at a one-month low against the Mexican peso.

This comes as speculation has been increasing about a Fed rate hike tomorrow. If so that would would be the first in nine years.

This dollar weakness could all be reversed if the Fed does raise rates, however, I  think that the rate hike (if it happens) is already well discounted and the whole thing could end up to be a "buy the rumor, sell the news" type of event.

On the other hand if the Fed doesn't raise then the dollar will almost certainly sell off further.

Time to fade Jim Rogers, AGAIN. And make more money...AGAIN!!

Bow-tied buffoon

Back in April, clownish, bow-tied buffoon, Jim Rogers, said he was bullish on the dollar. I wrote about it here saying that one ought to short the dollar. History has pretty much shown that if you do everything opposite of Rogers you will make a lot of money.

Sure enough, the Dollar Index at the time Rogers professed his love for the greenback was just under 100. Today it's around 95. The euro/dollar exchange rate was at 1.06. Today it's at 1.13. And dollar/yen was at 119 and it's roughly at the same level today.

I only bring this up because Rogers is saying that the markets won't let the Fed keep the rates up for long. LOL!!! He's the same guy who, for YEARS, had been saying that the markets wouldn't allow the Fed to keep rates low: there'd be inflation and hyperinflation and China would balk at buying and on and on and on. The idiot is probably LONG TREASURIES now after years and years and years of saying he was shorting them. Hahahahaa!!

Same with Schiff. He's been doing the Rogers thing, too, and saying that the Fed will never be able to raise rates or stop QE. That's the complete opposite of what he had been saying for years: that the markets would punish the Fed and send rates skyrocketing because of its policies.

I need to invent another language to express, in words, how FUCKING CLUELESS these guys are. But their brazen lack of humility and SHAME....WOW! It's really something to behold. Really.

Anyway, do yourself a favor and go short Treasuries. Since Rogers now thinks they will never go down (the "markets" won't let them) they'll probably crash like hell once the Fed puts through the first rate hike.

Gonna short USDJPY pretty soon

The dollar is experiencing a bounce along with stocks after getting crushed over the past week. I don't know about the euro, which may very well head lower as it's doing now, however, I think the dollar's break all the way down to 116 yen on Monday signals a change in trend.

I have been looking for the yen to rally based on a couple of factors, one being the steep drop in oil prices and the other, the fact that after four years Japan has begun restarting their nuclear reactors.

Right now I am looking for a level  to short USDJPY and I think I may enter this trade around 121.28 if we get up there.

Bet against the fools when the Fed raises rates. It's a lock!

They were all wrong about monetary policy and in particular the rate cuts, ZIRP, QE, balance sheet expansion, everything. They had it all wrong. 

People like Schiff, Faber, Rogers, Reinhart & Rogoff, Bill Gross, Martin Feldstein, the GOP, Obama, and so many more. Quacks and elite quacks. Ideologues. Snake oil salesmen and snake oil saleswomen.

We were told that interest rates would spike, there was going to be hyperinflation, gold would soar to $5,000 an ounce or higher, the dollar would get crushed, yada, yada, yada.

Some are still saying it.

Now as we are on the verge of the first rate hike in seven years many of these same quacks and fools are warning of dire consequences. They're saying that the Fed has no room to "undo" what it did, that it will bring on dire consequences, that the bubble it created will blow up with a ferocity of the Bikini Atoll H-bomb test.

What do YOU think will happen?

I'll tell you what I think will happen. The exact opposite of what the aforementioned, "Gang of Clueless" think is going to happen.

Even if I didn't know a stick of economics (MMT economics), I would bet the ranch and do the opposite of whatever those idiots say just because they've been sooo wrong for so long on so many things. Now they're talking about the dire consequences of  the coming rate hike cycle.

Ha!

Wild horses couldn't keep me from betting against these fools even if I knew nothing.

Any good horse racing handicapper will tell you that you always bet on form. If a horse is prone to winning and if that horse is prone to winning even more consistently under certain conditions then you bet and you bet aggressively. But these horses are prone to BEING WRONG AND LOSING! So I will bet heavily against them.

That’s what I will be doing.

So...rate hikes? Yep...and stocks soar, dollar crashes, commodities finally get off the floor.

Why? 

Because it's the opposite of what we've been doing for the last eight years, which has been to cut rates, strip the economy of assets (central banks are doing this) and take income away from people. 

Sure, you're helping a few folks get cheaper credit, but they have to pay it back to the banks so the banks are the ones who earn and more importantly, lower rates set the price lower of many other things.

On the other hand, when the government starts issuing people checks--I don't care whether that's a Social Security check or a payment to a doctor via Medicare or INTEREST PAYMENTS--that's  money to keep and money to spend and that's a fiscal stimulus.

The past eight years have been deflationary. The idiots got it wrong. WE got it right. The next few years of rate hikes will start the boom cycle again. Buy stocks, buy commodities, short the dollar, short bonds, clean up make a fortune and invite me on your sailboat or yacht, but make sure it's somewhere warm where the water's nice and clear. 

Dollar is tanking

Dollar down over 100 pips against the yen this morning. Euro is up over 1.11. Even very weak currencies like the NZ dollar are getting into the act, up 80 pips overnight.

What's causing this?

Not sure, but I have been saying that U.S. Federal Gov't spending has been slowing. This may be starting to be felt through purchase/supply channels, etc. Forex markets reacting.

As for the euro, I don't think there is huge upside because if the U.S. economy weakens as a result of a spending slowdown, then European exporters will start cutting prices again. Furthermore, Greece is not out of the woods; it just bought some time with the new bailout deal.

Anyway, I am a trader. If the dollar is falling now I am shorting it. By the way...my short USDJPY position, which I have had on for two weeks is near turning a profit now.

Dollar/yen getting slammed. I'm short, which is nice, but wondering whether or not this has something to do with Greece?

Dollar/Yen getting slammed in the last hour. I am short thanks to my trading strategies and other analyses, but wondering if this has something to do with growing angst over Greece?

Janet Yellen gives Forex traders green light to take the dollar lower

Janet Yellen just gave Forex traders the green light to take the greenback lower. In her comments to the media yesterday she said this:

“I think we have seen that it’s had a negative effect on net exports and so served as a something of a drag on the economy, and probably that drag is going to continue for some time to come,” 

I am betting that the markets take this as a sign to push the dollar lower. We are already seeing it this morning, with dollar weakness across the board.

This is easy money for Forex traders.

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