Things are beginning to get out of control in currency land.
The $USD is collapsing. Astute chart readers will note that the $USD has already experienced two sharp drops in the last few months (blue rectangles in the chart below). They occurred in late February before the COVID-19 shutdown and late March after the COVID-19 market meltdown subsided.
So why is this current drop (green rectangle in the chart above) so important?
Because this collapse is happening outside of a crisis.
The other two sharp drops were triggered by true Black Swan events (an economic shutdown and viral pandemic). This one is happening while things are actually returning to normal.
Put another way, the $USD is telling us that:
1) Either another Black Swan event is underway already.
2) The world is losing faith in the $USD based on the Fed’s’/ Federal Government’s money printing and stimulus.
For a better perspective on what I am talking about take a look at the next chart. The $USD is breaking its bull market trendline at a rapid clip. The only other time it did this was right before the COVID-19 black swan event.
Something BAD is brewing in the financial system. And it’s going to catch 99% of investors by surprise.
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Graham Summers
Chief Market Strategist
Phoenix Capital Research