22 thoughts on “DOLLAR UPDATE

  1. s29

    Welcome back Gary.

    I agree with Gary for the next 6-9 months that the USD will go lower. Election uncertainty, especially when Trump wins, combined with the Fed not raising interest rates will cause the dollar to move lower.

    This could be slightly bullish for the US stock markets (better earnings), but I think it will be bearish for the European markets. They won’t be liking a strong Euro.

    But I think in the long term it will be a big false move, because the Euro is going to splatter in the end. There’s just no way this political monetary union will stay together long term. Look at the uprisings against the establisments in France, Spain, Italy and Greece. Even in stronger Euro-countries like Germany and the Netherlands this trend don’t bode well for the Euro.

    1. Gary Post author

      As far as I can tell none of that matters when it comes to currencies. All that matters is who is printing fastest, and for the last year it looks like the Fed has succeeded in out printing everyone else and has halted the dollar rise.

      In theory the Fed has ended QE but since they will never be audited who really knows? Based on what is actually happening it looks like the Fed started another massive QE campaign last year and is now winning the currency wars.

      1. s29

        I think it matters a lot. All the big moves down in the Euro from the high in 2008 were predominantly caused by the uncertainty of the future of the common currency union. This causes big capital outflows from Europe and within Europe (like Southern European money going into German bunds). That’s why the German rates are way lower than US or UK bonds (not only because of ECB QE).

        European equities had 28 months of capital outflows in a row as of late. This is smart money leaving European shores for the S&P 500. That’s why US stock markets held up way better than European stock markets, despite a higher dollar.

        But for the time being, there are too many USD bulls, they have to be wiped out for a false move that will propel the USD to new highs.

        The current USD QE is caused by private parties taking on more debt (look at M3 Money Supply), not because of more Fed QE.

        1. Gary Post author

          I think you’ve been listening to Armstrong’s nonsense 🙂

          He’s already missed the entire rally in gold. All the way up he’s been trying to find excuses for why gold would turn and fulfill his prediction of sub $1000. He’s still looking for a “slingshot” move back down. Completely clueless.

          On the other hand I was expecting the dollar to top. Why? Because the CRB was due for a 3 year cycle low either late last year or early this year. For that to happen the dollar would have to top.

          As it turns out I was correct. The CRB did bottom and the dollar has topped.

          Meanwhile he remains in denial. So he’s missing the rally in gold and he’s keeping anyone following him on the wrong side of the currency markets. I expect his reputation and Socrates are going to take a huge hit when the dollar produces the recognition phase this fall that a new bear market has begun.

          1. s29

            I think Armstrong is overrated. But capital flows are capital flows. There’s no denial there have been huge capital flows from Europe because of the uncertainty of the future of the Euro.


            This is smart money not trusting the Euro anymore. This has a huge impact on the exchange rate of the Euro. Look at the prices since 2008.

            Once Italy or France wants to get out of the Euro, there’s toasted. Everybody will be going back to national currencies again, but first the Euro will decline a lot before that happens. You don’t have to be a prophet to see this one coming.

            This can take up several years of course, so countertrends rallies will be happening.

  2. Gary Post author

    Hmm we didn’t buy miners 3 weeks ago. We started buying on May 31. We just exited all leveraged positions on Aug. 11th. During that time we increased the metals portfolio from +56% to +144%.

  3. duckwhorocks1

    Dollar may be in a bear market but it won’t be severe as the USD is about to crush the Yen. That in turn in going to crush Gold.
    Oil moving out of its low, which I think will take it to $70 will evaporate miner profits. This has been the best bull run for Gold stocks and the reason is that the REAL price of Gold rose so much. I,e, Gold went up while other commodities went down. That is about to change. Prepare for a bloodbath in Gold stocks.

    1. Gary Post author

      I think you need to take another look at the yen. It has clearly started a cyclical bull market. Price bottomed right on long term support at 80 and has rallied violently, turning the 200 day moving average sharply higher.

      Remember the media is always on the wrong side of the market at major turning points. You should always ignore the media spin when cycles are in the timing band for a major reversal because they will always be behind the curve. The fundamentals will have already changed.

      We are seeing a classic example of this in oil right now. The fundamentals have already reversed yet many traders are still clinging to the fundamentals from 2015. At bottoms the market will anticipate a reversal in the fundamentals long before it is clear to the average trader.

      1. duckwhorocks1

        That is where we disagree.
        The Yen made a countertrend move to reset expectations.
        Already at current Yen levels Japanese exports are getting crushed.

        You can run all the cycle stuff but at the end of the day for the last 40 years, USD-Yen is tied to Interest rate differentials. The Fed will be raising again and that will destroy the Yen.
        I am short Yen via USD, Short Gold and Gold stocks and long Oil and general stocks.

  4. CooLoser

    I’m very surprised by the shift in thinking of where you believe exactly the US Dollar would bottom next year. At or near $72 for the Dollar is a most extreme drop over the next 9-12 months.
    If this unfolds as expected – it bodes well for Gold to test its all time highs at $1923 in an A wave?

    1. Gary Post author

      I doubt the dollar goes to 72 or lower during this 3 year cycle. Like I said in the video it will be the next 3 year cycle that bottoms in 2020 where the real damage will be done. That’s when the dollar should break below 71.

        1. Gary Post author

          That’s what everyone thinks and that is why everyone is on the wrong side of the trade.

  5. nanu

    Hi everybody I think the gold is still in the corrective mode & now a days running with the usd rather than opposite

    1. Gary Post author

      I’ll bet a burrito that if NUGT goes back to 70 you won’t be able to pull the trigger 🙂

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