Why is the US Dollar Collapsing if Inflation is Too Low?
By Graham Summers / GoldSeek
Did you know inflation is too low?
I didn’t. And neither does the $USD.
The greenback is down almost 10% this year and is about to end 2017 with its largest loss in over a decade.
Bear in mind, the $USD is collapsing at this pace DESPITE the Fed raising rates three times in 2017.
Why does this matter?
As I explain in my bestselling book The Everything Bubble: the Endgame For Central Bank Policy, US sovereign bonds (also called Treasuries) trade based on inflation expectations.
Put simply, when inflation spikes higher, so do Treasury bond yields.
When bond yields rise, bond prices fall.
When bond prices fall, the Bond Bubble bursts.
When the Bond Bubble bursts, the EVERYTHING bubble follows.
Well, guess what? The yield on 10-Year US Treasuries is spiking, having broken above its 20-year trendline.
What’s coming will take time for this to unfold, but as I recently told clients, we’re currently in “late 2007″ for the coming crisis. The time to prepare for this is NOW before the carnage hits.
Best Regards
Graham Summers
Chief Market Strategist
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Whistler Blowers, Insiders
The numbers in the inflation charts has been cooked for decades. The inflation is there.
True. For about as long as I can remember now, inflation numbers have been pretty much ex anything that costs money, ongoing. I believe it’s something everybody knows, like other statistics cooked, but about everybody’s onboard that painting a prettier picture and rose colored glasses is the stuff for trying to maintain market confidence. It’s like everybody needs to agree a pile of the unmentionable is fertilizer, lest it be seen for what it is and be sold for pennies on the dollar.
There is also the simple fact that all the big players know they are all dressed up, with nowhere to go. There are no buyers for the mountain of paper they’re holding, without the markets tanking. Sort of ironic, isn’t it, that so many of the ultra wealthy can only be so, on paper? Only a finite amount of investment paper can actually be exchanged for real money, this why markets crash when the herd wants out. All that stock is never, ever really worth what it appears to be worth, in bull markets, because all of it can never, ever be converted to real money. Money itself is imaginary, computer blips and paper, when you think about it, worth what you can get people to agree it’s worth, everything a con game, but that’s another subject.