The USD continues to rise simply by being one of the least ridiculous places to put your money.
We made printer go brrrrr, but at least we didn’t do this.
As Doomberg famously said, “We are not run by serious people”.
Now the word “we” pretty much applies all across the globe, but some “we”s are worse than others, and that’s what we investors need to know in order to keep our money safe.
And please remember as I’ve mentioned in the past, the US and Jerome Powell did make money printer go brrrr, but per capita, every G20 nation not names Russia did it worse.
So they will almost certainly be paying for their actions well before the US does.
This was the story of the past 7 days, and for good reason.
We all expect Britain to be a bit more sane, at least compares to the rest of Western Europe.
But it doesn’t mean they don’t do equally stupid shit sometimes.
Money is flooding out of the UK, and what are they doing to fix it?
What Zimbabwe did, of course.
Now you may see some temporary relief during this time of panic. Like rate hikes, etc.
But just like when the EU does it, I don’t think anyone is going to care because the fundamentals are that tainted.
RIP FTSE 100
And as we’ve seen in the US, this is not solving what it was intended to solve. So let’s replicate it!
If it saves the Sterling, in their minds it’s probably worth it.
But I don’t think it will matter. It’s not mattering for the Euro.
Why would it be so different here?
Speaking of the major currencies’ biggest dumpster fire, the Euro took another hit this week, as Italy finally had enough and elected somebody who no longer wants to play by the EU’s rules.
As you could probably guess, finding her victory speech on YouTube is difficult, because they don’t want anyone to see it.
They just want to call her “Far-Right”, as if that’s even an insult anymore. She probably is far-right by definition, but that’s what people are wanting now.
You can find her victory speech on Twitter if you care enough, it’s all over the place. But here is a speech from a few years ago illustrating her thoughts on the EU, the UN, and the elites. She pro-Italy, and anti-everything else.
Before the election, I figured we would see Italy leave the EU within about 5 years.
This could now be accelerated.
Say what you want about Italy’s failure to handle their money in a prudent and non-corrupt way (They pretty much wrote the book on it), but you cannot afford to lose one of your top countries if you’re the EU.
IMO, Macron is the only reason France isn’t next.
There is zero reason to be in Euros. Everything we’ve expected to happen is finally taking shape.
“Ok, we’re serious now. We’re stepping in.”
Says the bank who can’t do anything right.
And because I like picking on mainstream financial media, here is a delightful sequence of videos from the exact same source, two months apart.
Now doing something is certainly better than what the BOJ has been doing (fuck-all nothing), but who out there thinks this is going to matter long-term?
The second video even mentions this. There are not enough parties involved, and it already contradicts current monetary policies Japan has had for decades.
What It Means
We continue to have a very bullish outlook on the USD.
The DXY is the USD versus a basket of currencies, the vast majority is made up of the Euro, the Yen, and the Pound.
The United States can continue to sit back and do less than these places, and still come out the cleanest dirty shirt in the hamper by far, and this is what we expect.
Other NAFTA currencies like the MXN and to a lesser degree the CAD, continue to stay strong by comparison as well.
And when the price of Oil goes back up, I expect to see continued strength in the CAD going forward.
As we’ve been saying for the past 5-6 months, USD is the place to be right now, and likely for awhile.
A lot of you outside the US make no effort to diversify your currencies into USD holdings, because it throughout your life, it never really mattered, because you buy most of what you need in your country of residence.
It doesn’t matter — until it does.
At the very least, everyone reading this can gain USD exposure through the blockchain.
Here are my top options:
I did say in a later episode how I’m diversifying out of stablecoins, and into fiat USD. I am now slowly diversifying back into some stablecoins for protection against future bank failures should they occur.
The cautions that concerned be about stablecoins about a month ago have subsided a bit.
But all of you have access to either USDC, USDT, BUSD, USDP, or TUSD, and you should be utilizing this.
A lot of you are frogs boiling in a pot right now, and one day it may be too late.