While we have heard for years, and in some cases even decades, that the U.S. dollar and bond market would one day face a day of reckoning, it continues to appear as if that moment has finally arrived.
Whether it’s the Federal Reserve’s unprecedented balance sheet, the skyrocketing U.S. national debt, or the bubbles that have been inflated in the stock, bond, and real estate markets, the signs have been building for years. Yet the question has always been, when will these issues finally be resolved by the markets?
More and more, it appears as if we have finally entered the beginning of that transition. China, the largest creditor to the United States, continues to make arrangements to circumvent the dollar. Whether through the launch of its PetroYuan, or rumors of it withdrawing from the U.S. debt market. Of course this is an addition to their massive gold buying spree of recent years.
News also continues to surface of massive corruption within the political and banking system, with more evidence of significant arrests and revelations to come. And if true disclosure of what’s been going on behind the scenes shifts over to the financial markets, the impact will be stunning.
This is what the crypto currency markets are reflecting. Yes, there is paradigm changing value in the block chain technology. Yet the staggering rate at which the cryptos continue to rise is also some reflection of the decay of the dollar, and a loss of confidence in the current Wall Street system.
This has been prevented from being reflected in most of the financial markets due to Federal Reserve printed money and Wall Street manipulation. Yet if disclosure continues to occur as expected, the financial board will simply have to be repriced.
To what degree this occurs in 2018 will be fascinating to watch. Yet the idea that the balance of power shifting away from the United States is a far off scenario that might theoretically occur one day in the future no longer reflects reality.
Adjusting accordingly, whether financially or otherwise, has never been more important. Those who do will be rewarded significantly.
January 22, 2017