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    Market Update: Dollar Collapse Or Pitchforks?

    Which is the greater risk of the Fed's actions?
    by Adam Taggart

    Friday, June 19, 2020, 2:00 PM

Well, so far the market has shrugged off last Thursday’s violent 6% drop. Though it does seem the momentum of the mania has been substantially tampered down.

Last week’s drop created an “island reversal” that still remains, an encouraging technical sign for the bear camp:

S&P 500 island reversal chart

There have now been as many down days since the appearance of the island reversal than in the entire preceding month. The fact that the market hasn’t been able to rise higher and fill the gap above created by the reversal is a compelling signal that the rally may have finally run out of steam.

The key question now is: Will things consolidate here? Or will all those open gaps left below over the past few months by the face-ripping rally start getting filled via a big coming drop?

As we do each week, we’ve once again asked the lead partners at New Harbor Financial, Peak Prosperity’s endorsed financial advisor, to share their latest insights into the road ahead for investors.

And this week we’re fortunate to be joined by guest expert John Rubino, proprietor of DollarCollapse.com and co-author of The Money Bubble.

John joins us to discuss the implications of the massive price bubble the Fed continues to blow in stocks and bonds. His command of history shows that what’s happening today has plenty of historical precedent, and always ends in painful currency crisis and social revolt against the ruling elite. Will this time be any different?

Anyone interested in scheduling a free consultation and portfolio review with Mike and John can do so by clicking here.

And if you’re one of the many readers brand new to Peak Prosperity over the past few months, we strongly urge you get your financial situation in order in parallel with your ongoing physical coronavirus preparations.

We recommend you do so in partnership with a professional financial advisor who understands the macro risks to the market that we discuss on this website. If you’ve already got one, great.

But if not, consider talking to the team at New Harbor. We’ve set up this ‘free consultation’ relationship with them to help folks exactly like you.

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8 Comments

  • Sat, Jun 20, 2020 - 7:27am

    #1
    Curt504

    Curt504

    Status: Member

    Joined: Mar 22 2020

    Posts: 7

    1+

    IMHO TINA will prop up the dollar for a long time and be downward pressure on all prices.

    That chart of the S&P500 showing weakness needs to be side by side shown against the dollar DXY nudging up into the high 90's.

    Like the black swan of covid wacking us upside the head out of nowhere, it'll take some similar black swan (of the unkown unkowns variety) to dethrown the dolar as the worlds safest haven.   AAAnnnnd deficit spending till heck freezes over won't be that cause (in my guessing).  Theres worse examples of ruining our budget by 2x even 3x worse and still having a strong dollar (look at japan).

    I would (am not) be a gold buyer thinking you'll be growing wealth with appreciation!!!!  I can think of a few reasons that uber rich might consider to squirrel away assets out of the reach of the IRS etc but for most of us who still need to be growing wealth I would not include gold in that basket.  I do include real estate (all forms) but especially (per Rich Dad) rent producing real estate is an especially good store and Grower of wealth.   True in the nuclear winter scenario owning rentals is no help.   I think putting resources into the nuclear winter scenario to be,,, well,,, interesting that folks buy bunkers in New Zealand.  But not practical for folks even the sort of well off folks like myself.

    But thanks Peak folks, good nudging, good info, great tips,  its good to be prepared what ever that means to you personally.   Take care.

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  • Sat, Jun 20, 2020 - 7:38am

    Curt504

    Curt504

    Status: Member

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    Posts: 7

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    Curt504 said:

    Also, re studying that S&P500 chart, which one needs to look across all indices to see a wider picture; Russel, Dow, Nasdaq.  Techs have been strong, wider market weaker;  S&P+Russel.  Which is not good of course.

    That S&P chart looks to me like eliot wave B has topped of an ABC correction down, looking possible start C wave down.  C can be same length as A or longer.   I agree,,,, that eliot has been less and less useful on the way up due to extreme juicing of the market ruining natural correction points.  But if you study the crash waves down in the last many years, they have been clear ABC.   AND when that C ends you know to start buying.   The crash touters always say 5 waves down (a change from bull to bear, where ABC is just correction and retention of the bull market).   AND every time the bear touters where wrong;  3/9/09 was end of C down.   March 23 (+/-) end of C down.  Many more if I scrolled back closely.   I have rolled over from bear to perma bull that the market is indeed wired to always go up,,, but with surprise mini crashes along the way.

    I'd like to refer you to an excellent short term trader that gives excellent longer term turning point helps.  Oscar Carboni:  https://www.youtube.com/channel/UCez8uA1o_fDYsrSf4auWSjg

    The chart guys are great too:  https://www.youtube.com/channel/UCnqZ2hx679DqRi6khRUNw2g/videos

    best to you, curt

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  • Sun, Jun 21, 2020 - 5:13am

    #3
    miguel

    miguel

    Status: Member

    Joined: Mar 10 2020

    Posts: 11

    2+

    Dollar Strength

    For me the likelier scenario is dollar Strength.

    Fed only backstopping what is being guaranteed by US government. As bankruptcies start rolling in, along with contracting GDP and high unemployment, US government won't have the revenues coming in to continue guaranteeing junk debt.

    In Order to pay for escalating defaults, income taxes will need to go up, or yields on government bonds will have to go up, or both. As taxes on contracting GDP and high unemployment will not be sufficient in the immediate short term, yields will have to go up.

    Risk free yields going up is bad news for other markets as investors redistribute. As such, risk will carry a much higher cost, and interest rates across the board go up, irrespective of fed target.

    As for the dollar, as long as confidence remains in US as the relatively safest haven, the dollar should strengthen significantly.

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  • Sun, Jun 21, 2020 - 7:52am

    David Turin

    David Turin

    Status: Bronze Member

    Joined: May 12 2020

    Posts: 54

    1+

    Park some capital?

    I would (am not) be a gold buyer thinking you'll be growing wealth with appreciation!!!!

    I did not hear this in the program.  I heard gold might be a good place to "park some capital," a place to preserve your wealth.  Is there any disagreement that our currency has lost purchasing power over time?

    As to

    downward pressure on all prices.

    this has not been my experience.  The running shoes I have been buying these last many years have tripled in price. I am spending more currency on my regular grocery purchases too.

    My understanding from a consumer perspective, flawed as it may be, is that prices have been rising, and for a long time.  In other words, I feel upward pressure.  My toilet paper rolls are narrower and I had to replace my dispenser last year.

    As I wrote, this is not a new experience for me.  I have been feeling an upward pressure for decades.  The chart expresses what I have experienced:

    https://cdn.digg.com/images/c75ae4f7cf514ef89868b609d40f3d27_ebc53ed963b049b5a14f42eb423586a8_1_post.jpeg

    Some items do appear less expensive, computer software, some gizmos like an Echo Dot or Fire Stick.  Just about everything else, items I routinely purchase, is increasing in price, and has been for a long time now.

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  • Mon, Jun 22, 2020 - 9:08am

    #5

    Adam Taggart

    Status: Platinum Member

    Joined: May 25 2009

    Posts: 4938

    1+

    Sheesh

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  • Mon, Jun 22, 2020 - 10:26am

    DennisC

    DennisC

    Status: Bronze Member

    Joined: Mar 19 2011

    Posts: 146

    Yeah Baby, Yeah!

    Now we're cookin' with gas!

     

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  • Mon, Jun 22, 2020 - 11:26am

    David Turin

    David Turin

    Status: Bronze Member

    Joined: May 12 2020

    Posts: 54

    Yield Curve Control

    Adam, have you all gotten into the topic of "Yield Curve Control" with the New Harbor folk?

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  • Mon, Jun 22, 2020 - 11:52am

    Adam Taggart

    Status: Platinum Member

    Joined: May 25 2009

    Posts: 4938

    1+

    YCC

    No, we haven't. Will be getting into that this week with the NH team.

    cheers,

    A

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