The US presidential cycle runs for 4 years; the years before and after the election are the most market-friendly to the bulls, as politicians promise the kitchen sink. Typically, the incumbent will do all they can to ensure the economy is doing well before the election; they do this by making the monetary condition easier. One way to do this is to lower the US dollar.
Chart 1: US dollar (DXY)
The blue lines are US election dates (November). Both 2016 and 2020 saw a move to get the US dollar down in the 12 months prior to the election.
During the next 13 months the US Government has to fund the US deficit to the tune of $8 trillion dollars of existing and new debt. This means they need to find $8T USD out in the market place to buy this debt. There are many tricks the FED and TREASURY can do to do this, and one trick to lower the price of the US dollar debt to foreign investor by lowering the currency it is sold in (say DXY near $90), otherwise known as currency debasement.
Bert Dohmen of the Wellington posted this (2023-11-27):
We just read that the federal government is running its largest deficit as a percentage of GDP outside of WWII period. Another great achievement!
And next year we are likely to see the greatest money creation out of thin air in the entire history of the US. The Fed has to create ways to finance the record deficits by the creation of new money.
That of course has inflationary implications. And that will plunge the bond market again, making the bond disaster even worse. Remember, last time we wrote the global bond market is $128 TRILLION. That is 128 billion times a billion dollars.
We conservatively estimate that they have unrealized paper losses of at least 60%. Therefore, the loss on the global bond market would be a staggering $77 TRILLION!!!
Debasement of the currency is a likely event to massive indebted sovereign states. Investors can protect themselves from this by investing in anti US dollar investment vehicles like: Gold, Silver, Oil, Crypto.
Chart 2 - Ethereum cycle is ready to run on currency debasement.
Chart 3 - Ethereum Channel support and resistance forecast or equal move forecast.
Original Post: https://ift.tt/4hN7iAt
