Warning: The US Dollar is Breaking Down in a Big Way
The market has begun to realize just how much money the elites will need to print in the coming months.
Between the $2 trillion stimulus program and the Fed’s various credit facilities, the US has already printed over $4.8 trillion in the last 12 weeks.
This is roughly 25% of US GDP… being printed in just three months. Put another way, on an annualized basis the US is on track to print its entire GDP in new money in the span of a single year.
Small wonder than that the USD is breaking down in a major way.
Basic economics tells us that the more of something there is, the less value it has. And the US is printing new dollars at a pace never before seen in history!
In the long term, the USD remains in an uptrend… just barely.
If it breaks the trendline below, things could start to get interesting. Meaning the two–year bull market in the USD is over.
There are many implications for a declining USD. One of the biggest ones is that it signals higher inflation is coming.
A Tectonic Shift to Higher Inflation
The long–term Treasury is warning the same thing.
You see, bond yields trade based on inflation. So the higher inflation is, the higher bond yields need to rally. And the yield on the 30–year Treasury is breaking out to the upside, telling us the bond market is forecasting higher inflation.
This signals a tectonic shift is underway. If we do get higher inflation in the US, those who carefully prepare for it could make literal fortunes.
I’ll be covering inflationary hedges in these pages in the coming days. Just know for now, the macro backdrop tells us we are moving into an inflationary framework.
Editor, Money & Crisis