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(Hey everyone, this is the SECOND half of the Finale, you can find the first half here)
The Dollar EndgameTrue monetary collapses are hard to grasp for many in the West who have not experienced extreme inflation. The ever increasing money printing seems strange, alien even. Why must money supply grow exponentially? Why did the Reichsbank continue printing even as hyperinflation took hold in Germany?
What is not understood well are the hidden feedback loops that dwell under the surface of the economy.
The Dragon of Inflation, once awoken, is near impossible to tame.
It all begins with a country walking itself into a situation of severe fiscal mismanagement- this could be the Roman Empire of the early 300s, or the German Empire in 1916, or America in the 1980s- 2020s.
The State, fighting a war, promoting a welfare state, or combating an economic downturn, loads itself with debt burdens too heavy for it to bear.
This might even create temporary illusions of wealth and prosperity. The immediate results are not felt. But the trap is laid.
Over the next few years and even decades, the debt continues to grow. The government programs and spending set up during an emergency are almost impossible to shut down. Politicians are distracted with the issues of the day, and concerns about a borrowing binge take the backseat.
The debt loads begin to reach a critical mass, almost always just as a political upheaval unfolds. Murphy’s Law comes into effect.
Next comes a crisis.
This could be Visigoth tribesmen attacking the border posts in the North, making incursions into Roman lands. Or it could be the Assassination of Archduke Franz Ferdinand in Sarajevo, kicking off a chain of events causing the onset of World War 1.
Or it could be a global pandemic, shutting down 30% of GDP overnight.
Politicians respond as they always had- mass government mobilization, both in the real and financial sense, to address the issue. Promising that their solutions will remedy the problem, a push begins for massive government spending to “solve” economic woes.
They go to fundraise debt to finance the Treasury. But this time is different.
Very few, if any, investors bid. Now they are faced with a difficult question- how to make up for the deficit between the Treasury’s income and its massive projected expenditure. Who’s going to buy the bonds?
With few or no legitimate buyers for their debt, they turn to their only other option- the printing press. Whatever the manner, new money is created and enters the supply.
This time is different. Due to the flood of new liquidity entering the system, widespread inflation occurs. Confounded, the politicians blame everyone and everything BUT the printing as the cause.
Bonds begin to sell off, which causes interest rates to rise. With rates suppressed so low for so long, trillions of dollars of leverage has built up in the system.
No one wants to hold fixed income instruments yielding 1% when inflation is soaring above 8%. It's a guaranteed losing trade. As more and more investors run for the exits in the bond markets, liquidity dries up and volatility spikes.
The MOVE index, a measure of bond market volatility, begins climbing to levels not seen since the 2008 Financial Crisis.
Sovereign bond market liquidity begins to evaporate. Weak links in the system, overleveraged several times on government debt, such as the UK’s pension funds, begin to implode.
The banks and Treasury itself will not survive true deflation- in the US, Yellen is already getting so antsy that she just asked major banks if Treasury should buy back their bonds to “ensure liquidity”!
As yields rise, government borrowing costs spike and their ability to roll their debt becomes extremely impaired. Overleveraged speculators in housing, equity and bond markets begin to liquidate positions and a full blown deleveraging event emerges.
True deflation in a macro environment as indebted as ours would mean rates soaring well above 15-20%, and a collapse in money market funds, equities, bonds, and worst of all, a certain Treasury default as federal tax receipts decline and deficits rise.
A run on the banks would ensue. Without the Fed printing, the major banks, (which have a 0% capital reserve requirement since 3/15/20), would quickly be drained. Insolvency is not the issue here- liquidity is; and without cash reserves a freezing of the interbank credit and repo markets would quickly ensue.
For those who don’t think this is possible, Tim Geitner, NY Fed President during the 2008 Crisis, stated that in the aftermath of Lehman Brothers’ bankruptcy, we were “We were a few days away from the ATMs not working” (start video at 46:07).
As inflation rips higher, the $24T Treasury market, and the $15.5T Corporate bond markets selloff hard. Soon they enter freefall as forced liquidations wipe leverage out of the system. Similar to 2008, credit markets begin to freeze up. Thousands of “zombie corporations”, firms held together only with razor thin margins and huge amounts of near zero yielding debt, begin to default. One study by a Deutsche analyst puts the figure at 25% of companies in the S&P 500.
The Central Banks respond to the crisis as they always have- coming to the rescue with the money printer, like the Bank of England did when they restarted QE, or how the Bank of Japan began “emergency bond buying operations”.
But this time is massive. They have to print more than ever before as the ENTIRE DEBT BASED FINANCIAL SYSTEM UNWINDS.
QE Infinity begins. Trillions of Treasuries, MBS, Corporate bonds, and Bond ETFs are bought up. The only manner in which to prevent the bubble from imploding is by overwhelming the system with freshly printed cash. Everything is no-limit bid.
The tsunami of new money floods into the system and a face ripping rally begins in every major asset class. This is the beginning of the melt-up phase.
The Federal Reserve, within a few months, goes from owning 30% of the Treasury market, to 70% or more. The Bank of Japan is already at 70% ownership of certain JGB issuances, and some bonds haven’t traded for a record number of days in an active market!
The Central Banks EAT the bond market. The “Lender of Last Resort” becomes “The Lender of Only Resort”.
Another step towards hyperinflation. The Dragon crawls out of his lair.
Now the majority or even entirety of the new bond issuances from the Treasury are bought with printed money. Money supply must increase in tandem with federal deficits, fueling further inflation as more new money floods into the system.
The Fed’s liquidity hose is now directly plugged into the veins of the real economy. The heroin of free money now flows in ever increasing amounts towards Main Street.
The same face-ripping rise seen in equities in 2020 and 2021 is now mirrored in the markets for goods and services.
Prices for Food, gas, housing, computers, cars, healthcare, travel, and more explode higher. This sets off several feedback loops- the first of which is the wage-price spiral. As the prices of everything rise, real disposable income falls.
Massive strikes and turnover ensues. Workers refuse to labor for wages that are not keeping up with their expenses. After much consternation, firms are forced to raise wages or see large scale work stoppages.
These higher wages now mean the firm has higher costs, and thus must charge higher prices for goods. This repeats ad infinitum.
The next feedback loop is monetary velocity- the number of times one dollar is spent to buy goods and services per unit of time. If the velocity of money is increasing, then more transactions are occurring between individuals in an economy.
The faster the dollar turns over, the more items it can bid for- and thus the more prices rise. Money velocity increasing is a key feature of a currency beginning to inflate away. In nations experiencing hyperinflation like Venezuela, where money velocity was purported to be over 7,000 annually- or more than 20 times a DAY.
As prices rise steadily, people begin to increase their inflation expectations, which leads to them going out and preemptively buying before the goods become even more expensive. This leads to hoarding and shortages as select items get bought out quickly, and whatever is left is marked up even more. ANOTHER feedback loop.
Inflation now soars to 25%. Treasury deficits increase further as the government is forced to spend more to hire and retain workers, and government subsidies are demanded by every corner of the populace as a way to alleviate the price pressures.
The government budget increases. Any hope of worker’s pensions or banks buying the new debt is dashed as the interest rates remain well below the rate of inflation, and real wages continue to fall. They thus must borrow more as the entire system unwinds.
The Hyperinflationary Feedback loop kicks in, with exponentially increasing borrowing from the Treasury matched by new money supply as the Printer whirrs away.
The Dragon begins his fiery assault.
Hyperinflationary Feedback Loop
As the dollar devalues, other central banks continue printing furiously. This phenomenon of being trapped in a debt spiral is not unique to the United States- virtually every major economy is drowning under excessive credit loads, as the average G7 debt load is 135% of GDP.
As the central banks print at different speeds, massive dislocations begin to occur in currency markets. Nations who print faster and with greater debt monetization fall faster than others, but all fiats fall together in unison in real terms.
Global trade becomes extremely difficult. Trade invoices, which usually can take several weeks or even months to settle as the item is shipped across the world, go haywire as currencies move 20% or more against each other in short timeframes. Hedging becomes extremely difficult, as vol premiums rise and illiquidity is widespread.
Amidst the chaos, a group of nations comes together to decide to use a new monetary media- this could be the Special Drawing Right (SDR), a neutral global reserve currency created by the IMF.
It could be a new commodity based money, similar to the old US Dollar pegged to Gold.
Or it could be a peer-to-peer decentralized cryptocurrency with a hard supply limit and secure payment channels.
Whatever the case- it doesn't really matter. The dollar will begin to lose dominance as the World Reserve Currency as the new one arises.
As the old system begins to die, ironically the dollar soars higher on foreign exchange- as there is a $20T global short position on the USD, in the form of leveraged loans, sovereign debt, corporate bonds, and interbank repo agreements.
All this dollar debt creates dollar DEMAND, and if the US is not printing fast enough or importing enough to push dollars out to satisfy demand, banks and institutions will rush to the Forex market to dump their local currency in exchange for dollars.
This drives DXY up even higher, and then forces more firms to dump local currency to cover dollar debt as the debt becomes more expensive, in a vicious feedback loop. This is called the Dollar Milkshake Theory, posited by Brent Johnson of Santiago Capital.
The global Eurodollar Market IS leverage- and as all leverage works, it must be fed with new dollars or risk bankrupting those who owe the debt. The fundamental issue is that this time, it is not banks, hedge funds, or even insurance giants- this is entire countries like Argentina, Vietnam, and Indonesia.
The Dollar Milkshake
If the Fed does not print to satisfy the demand needed for this Eurodollar market, the Dollar Milkshake will suck almost all global liquidity and capital into the United States, which is a net importer and has largely lost it’s manufacturing base- meanwhile dozens of developing countries and manufacturing firms will go bankrupt and be liquidated, causing a collapse in global supply chains not seen since the Second World War.
This would force inflation to rip above 50% as supply of goods collapses.
Worse yet, what will the Fed do? ALL their choices now make the situation worse.
The Fed's Triple Dilemma
Many pundits will retort- “Even if we have to print the entire unfunded liability of the US, $160T, that’s 8 times current M2 Money Supply. So we’d see 700% inflation over two years and then it would be over!”
This is a grave misunderstanding of the problem; as the Fed expands money supply and finances Treasury spending, inflation rips higher, forcing the AMOUNT THE TREASURY BORROWS, AND THUS THE AMOUNT THE FED PRINTS in the next fiscal quarter to INCREASE. Thus a 100% increase in money supply can cause a 150% increase in inflation, and on again, and again, ad infinitum.
M2 Money Supply increased 41% since March 5th, 2020 and we saw an 18% realized increase in inflation (not CPI, which is manipulated) and a 58% increase in SPY (at the top). This was with the majority of printed money really going into the financial markets, and only stimulus checks and transfer payments flowing into the real economy.
Now Federal Deficits are increasing, and in the next easing cycle, the Fed will be buying the majority of Treasury bonds.
The next $10T they print, therefore, could cause additional inflation requiring another $15T of printing. This could cause another $25T in money printing; this cycle continues forever, like Weimar Germany discovered.
The $200T or so they need to print can easily multiply into the quadrillions by the time we get there.
The Inflation Dragon consumes all in his path.
Federal Net Outlays are currently around 30% of GDP. Of course, the government has tax receipts that it could use to pay for services, but as prices roar higher, the real value of government tax revenue falls. At the end of the Weimar hyperinflation, tax receipts represented less than 1% of all government spending.
This means that without Treasury spending, literally a third of all economic output would cease.
The holders of dollar debt begin dumping them en masse for assets with real world utility and value- even simple things such as food and gas.
People will be forced to ask themselves- what matters more; the amount of Apple shares they hold or their ability to buy food next month? The option will be clear- and as they sell, massive flows of money will move out of the financial economy and into the real.
This begins the final cascade of money into the marketplace which causes the prices of everything to soar higher. The demand for money grows even larger as prices spike, which causes more Treasury spending, which must be financed by new borrowing, which is printed by the Fed. The final doom loop begins, and money supply explodes exponentially.
Monetary velocity rips higher and eventually pushes inflation into the thousands of percent. Goods begin being re-priced by the day, and then by the hour, as the value of the currency becomes meaningless.
A new money, most likely a cryptocurrency such as Bitcoin, gains widespread adoption- becoming the preferred method and eventually the default payment mechanism. The State continues attempting to force the citizens to use their currency- but by now all trust in the money has broken down. The only thing that works is force, but even the police, military and legal system by now have completely lost confidence.
The Simulacrum breaks down as the masses begin to realize that the entire financial system, and the very currency that underpins it is a lie- an illusion, propped up via complex derivatives, unsustainable debt loads, and easy money financed by the Central Banks.
Similar to Weimar Germany, confidence in the currency finally collapses as the public awakens to a long forgotten truth-
There is no supply cap on fiat currency.
When asked in 1982 what was the one word that could be used to define the Dollar, Fed Chairman Paul Volcker responded with one word-
All fiat money systems, unmoored from the tethers of hard money, are now adrift in a sea of illusion, of make-believe. The only fundamental props to support it are the trust and network effects of the participants.
These are powerful forces, no doubt- and have made it so no fiat currency dies without severe pain inflicted on the masses, most of which are uneducated about the true nature of economics and money.
But the Ships of State have wandered into a maelstrom from which there is no return. Currently, total worldwide debt stands at a gargantuan $300 Trillion, equivalent to 356% of global GDP.
This means that even at low interest rates, interest expense will be higher than GDP- we can never grow our way out of this trap, as many economists hope.
Fiat systems demand ever increasing debt, and ever increasing money printing, until the illusion breaks and the flood of liquidity is finally released into the real economy. Financial and Real economies merge in one final crescendo that dooms the currency to die, as all fiats must.
Day by day, hour by hour, the interest accrues.
The Debt grows larger.
And the Dollar Endgame Approaches.
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Abstract/TL;DIMPORTANT: This article is mostly quotations and maps from research done in the past thirty years; the rest is old evidence that's been overlooked by many folks interested in this subject. Cultures on both sides of the Atlantic share symbolism, architectural styles, rituals, and artifacts; and cultures on both sides of the Pacific share genetics, artifacts, rituals, and symbolism. Academics are beginning to give the idea of trans-Atlantic and trans-Pacific crossings another look. It'll be a bit in-depth, so read Parts 1 and 2 if you'd like additional context. References will be linked to conserve space.submitted by CopperViolette to AlternativeHistory [link] [comments]
———How History Becomes Myth: Corrupted Traditions———Alasdair MacIntyre, After Virtue: A Study in Moral Theory, 1981 & 1985
"[I]n sustaining those traditions which provide both practices and individual lives with their necessary historical context. Lack of justice, lack of truthfulness, lack of courage, lack of relevant intellectual virtues—these corrupt traditions, just as they do those institutions and practices which derive their life from the traditions of which they are the contemporary embodiments" (Cottingham 546).Here's a more recent example, this time from two Greek professors:
Victor David Hanson and John Robert Heath, Stanford-educated professors, Who Killed Homer?: The Demise of Classical Education and the Recovery of Greek Wisdom, 2001
"The Greeks, unfamiliar to the public at large, are also now dead in the university itself. Today, Classics embraces a body of knowledge and a way of looking at the world that is virtually unrecognized, an almost extinct species even in its own precious habitat, the academic department. We Classicists are the dodo birds of academia; when we retire or die, our positions are either eliminated or replaced with temporary and part-time help" (Muraresku 15-18).The General Directorate of Antiquities and Cultural Heritage in Greece thinks along these same lines. However, she places more blame on religions and crusades:
Dr. Polyxeni Adam-Veleni, head of the General Directorate of Antiquities and Cultural Heritage in Greece, 2018 interview
"Yes, we have [missing information]. Thanks to Christianity. That's the reason. It's that simple. It's nothing else. They changed everything ... The destruction of the Great Library of Alexandria. This is a great loss, the greatest in the world, in my opinion. Things would be so different if we had all those sources, all those ancient texts. We have so little from antiquity." (Muraresku 65).A Classics student and lawyer studied in Greece as part of a 10-year research project. This is what he wrote about lost texts:
Brian C. Muraresku, Brown University Phi Beta Kappa graduate with degrees in Latin, Greek, and Sanskrit, The Immortality Key: The Secret History of the Religion with No Name, 2020
"It took weeks to arrange the meeting in September 2018 with [archaeologist and scholar] Dr. Polyxeni Adam-Veleni, head of the General Directorate of Antiquities and Cultural Heritage in Greece. When it comes to the legacy of the civilization that shaped the modern world, she is the boss. The director is responsible for making sure nobody forgets about Ancient Greece ... In Adam Veleni I've found a kindred spirit willing to talk about events that weren't openly discussed in my entire time at university" (Muraresku 54, 56).Plato's texts have been interpreted 100% literally, laughed at, or simply ignored. Several Greeks tried interpreting myths rationally. Even Herodotus was skeptical of the information he was receiving. As he mentioned in his Histories:
Herodotus, Histories III, ca. 450 B.C.E., pgs. 115-116:
"About the far west of Europe I have no definite information, for I cannot accept the story of a river called by non-Greek peoples the Eridanus, which flows into the northern sea, where amber is supposed to come from; nor do I know anything of the existence of islands called the Tin Islands [Kassiterides], whence we get our tin.... [I]n spite of my efforts to do so, I have never found anyone who could give me first-hand information of the existence of a sea beyond Europe to the north and west. Yet it cannot be disputed that tin and amber do come to us from what one might call the ends of the earth. It is clear that it is the northern parts of Europe which are the richest in gold, but how it is procured is another mystery ... In any case it does seem true that the countries which lie on the circumference of the inhabited world produce the things which we believe to be most rare and beautiful" (Herodotus III, 115-116; qtd. in Koch and Ling, 96).Knowing traditions can become corrupt with time, religious researcher Dr. Daniel Wallace gave a list of practical attitudes and questions to ask in his lecture How Badly Was the New Testament Corrupted?:
Two Attitudes to Avoid:
Thore Bjørnvig, Seductive Similarities: A Comment on Gerum, Trans-Atlantic Contacts and Analogies, 2010
"However interesting and revolutionizing it would be to be able to present evidence for other prehistoric contacts between the Old and the New world, one has to accept the scientiﬁc demand for sound evidence if any serious discussion of the possibility of contacts is to be conducted."A fellow researcher gives a similar view:
Stephen Jett, Pre-columbian transoceanic influences: Far-out fantasy, unproven possibility, or undeniable reality?, July 14, 2017
"It is true that meaningful assessment of the issue requires time and effort. It also requires a broad approach: The evidence of archaeology alone is insufficient, and one must also look closely at aspects of climatology, oceanography, watercraft and navigation, linguistics and epigraphy, ethnography, ethnobotany, ethnogeography, human genetics, medicine, and so forth.Likewise, some California researchers gives practically the same view:
Alice Storey and Terry L. Jones, Diffusionism in Archaeological Theory: The Good, The Bad, and The Ugly, 2014:
“In the 1970s diffusion as a concept was generally marginalized by the “New Archaeology,” which tried to distance itself from earlier types of explanation, particularly migration and diffusion. For New Archaeologists, to employ these concepts was contra a scientific approach to archaeological interpretation (Ucko 1995).”Terry L. Jones, California archaeologist, California Polytechnic State University, Traveling Prehistoric Seas: Critical Thinking on Ancient Transoceanic Voyages, 2018
“Unlike most of her generation (she received her Ph.D. from Harvard in the 1960s), Alice Kehoe has never been overly enamored of the “new” archaeology, hence her willingness to think about transoceanic diffusion, which is a topic that was essentially thrown under the bus by processualists in the 1960s, 1970s, and 1980s. … Kehoe defends diffusionism, inductive reasoning, critical thinking, political awareness, and empiricism. This combination is unusual among American scholars, but it provides a refreshing contrast to the politically correct archaeology currently being advanced on many American campuses.”Now that we know how history can become legends and myths, let's delve into the article's topic.
———Atlantis: The Lost Trans-Atlantic Maritime Culture———Plato says Atlantis was a culture comparable in wealth to Egypt and ancient Greece. Atlantis ruled across Europe and Africa. The only culture comparable to this was the Megalithic Builders who built Stonehenge. This ancient monument is the only one of its kind in Europe or the British Isles. Because folks often relate it to Egypt or the Pyramids, one Scottish archaeologist mentioned:
Julie Gibson, a county archaeologist working in the Orkney islands of northern Scotland:
"I've heard this place called the Egypt of the North. Turn over a rock around here and you're likely to find a new site."Plato said Atlantis existed over 9000 years ago. This is an issue because archaeology has not found evidence of a maritime culture across Atlantis's described territory. However, Plato mentions the names of multiple ancient Greek rulers, which means Atlantis developed prior to 1600 B.C.E. and became corrupt by 1100 B.C.E.
"Solon said that the priests in their narrative of that war mentioned most of the names which are recorded prior to the time of Theseus, such as Cecrops, and Erechtheus, and Erichthonius, and Erysichthon, and the names of the women in like manner" (Critias).When Poseidon first colonized his Atlantic island, it was already inhabited. He fell in love with a woman named Cleito and they have several children. To honor them, Poseidon named the entire island after his firstborn, Atlas, and named the Ocean after him also. This is why it's called the Atlantic Ocean.
Plato, Critias, 360 B.C.E.
"[A]t the very beginning they built the palace in the habitation of the god and of their ancestors, which they continued to ornament in successive generations, every king surpassing the one who went before him to the upmost of his power, until they made the building a marvel to behold for size and beauty" (Critias).Reconstruction of Stonehenge Phase III c. 2000 B.C.E.
Like Poseidon's temple, Stonehenge was built on a plain at the south-central point of an island in the Atlantic. It was built over a house-like timber structure and was added onto for over 1800 years. In the site's earliest phases, each stone represented an individual's grave. Therefore, it is likely the five sets of trilithon stones in the site's center represent ten very wealthy or influential individuals.
Stonehenge and the British Isles in relation to continental Europe's henges, burial mounds, and rivers. Based on strontium analysis, people throughout Europe and the Mediterranean would have known about Stonehenge.
Jim Leary, a University of York field archaeology lecturer described in a recent National Geographic interview as part of the August 2022 issue:
"[England's megalithic construction and urbanization] was insane, utterly unsustainable. We tend to think of people during the Neolithic as somehow being at one with their environment, but they appear to have been just as bad as we are. They were clearing, felling, digging, and consuming their environment at an unsustainable rate in building these huge projects" (National Geographic).Susan Greaney, English Heritage archaeologist
"It was like a mania sweeping the countryside, an obsession that drove them to build bigger and bigger, more and more, better and more complex."Raising megaliths on coastal islands and crossing the English Channel would have required skilled sailors. As a European archaeologist studying the Neolithic stated:
Serge Cassen, Archaeologist, University of Nantes
"To get to the island—and it really was an island at that time—you had to have a boat. But not just a raft or a dugout. They needed a proper watercraft that had planks tied tightly together. The Gavrinis capstone weighed more than 20 tons, so you could imagine that the boat had to be pretty large."Recent evidence suggests these knowledgeable sailors colonized the Azores also. As a recent BBC program on megaliths in the mid-Atlantic mentioned:
Dr. Félix Rodrigues, Physicist, University of the Azores - Was the Azores home to an ancient civilization? – BBC REEL
“The fact that there are megalithic structures on this [Azores] island automatically implies that we are talking about voyages in the Atlantic that took place in the second millennium BC. This is impressive and changes the paradigm of deep Atlantic voyages in very remote periods."The evidence is interesting. If they made it to the Azores, they likely used star navigation and ocean currents. However, Plato already told us humanity was sailing the ocean in the distant past:
Plato, Timaeus, c. 360 B.C.E.
“[I]n this island of Atlantis there was a great and wonderful empire which had rule over the whole island and several others... "[I]n those days the Atlantic was navigable; and there was an island situated in front of the straits which are by you called the Pillars of Heracles; the island was larger than Libya and Asia put together, and was the way to other islands, and from these you might pass to the whole of the opposite continent which surrounded the true ocean; for this sea which is within the Straits of Heracles is only a harbour, having a narrow entrance, but that other is a real sea, and the surrounding land may be most truly called a boundless continent."Even in 2000 B.C.E., the Azores were not larger than Libya and Asia. The only landmass that size in the Atlantic is the Americas. We'll get to that, but let's narrow down Atlantis's location first.
Plato, Critias, 360 B.C.E.
"[T]hat which is now only a name and was then something more than a name, orichalcum [Greek for "Mountain copper"], was dug out of the earth in many parts of the island, being more precious in those days than anything expect gold.By Plato's time, orichalcum was a metal from mythology. It was no longer traded, implying that the island's supply ran out. This is similar to what a recent analysis of Britain's copper mines is suggesting:
Williams and Le Carlier de Veslud, Boom and Bust in Bronze Age Britain: Major Copper Production from the Great Orme Mine and European Trade, c. 1600–1400 BC., 2019
"The widespread distribution of Great Orme metal across Britain and into continental Europe suggests major production levels, probably for commodity trade rather than simple gift exchange [until the copper ore started running out]. Even higher total outputs have been estimated for the Mitterberg region of Austria, reaching up to 20,000 tonnes of copper between the sixteenth and thirteenth centuries BC"The Stonehenge Landscape. Most standing stones and megaliths are located near mountain copper sources and major rivers. This suggests Neolithic society had more structure and organization than previously suspected; this view is becoming more common.
Modern research is revealing a more connected Neolithic and Bronze Age Europe than originally thought:
Jim Leary, a University of York field archaeology lecturer:
"It's almost like starting over from scratch. A lot of the things we were taught as undergraduates in the 1990s we know simply aren't true."Plato and his colleagues knew about Atlantis' rituals, describing their instruments and care at length:
Plato, Critias, 360 B.C.E.
"[In their sacrificial rituals], they drew from [a blood-filled] bowl in golden cups, and pouring a libation on the fire, they swore that they would judge according to the laws on the pillar, and would punish him who in any point had already transgressed them, and that for the future they would not, if they could help, offend against the writing on the pillar, and would neither command others, nor obey any ruler who commanded them, to act otherwise than according to the laws of their father Poseidon."Map of Bronze Age European artifacts, such as golden cups and petroglyphs. Bronze Age trade networks are more comparable to Iron Age trade networks than to Neolithic trade networks.
British Museum, Royal Trust Collection, 2022
"The [Rillaton gold] cup is a very rare example of early Bronze age gold and is one of only seven other Northern European examples [uncovered so far]. It is similar to another [unstable, rounded-bottom] cup in the British Museum, the Ringlemere Cup; however, that example has been severely crumpled during its history."Plato said Atlantis held sway across Europe as far as Italy and of North Africa as far as Libya and Egypt. When the Neolithic Anatolians—the descendants of the folks who built Gobekli Tepe—reached the Atlantic Coast, they began raising megaliths. Their territory covered Atlantis's territory. Later, bronze metallurgists known as the Bell Beaker Culture held sway across the same territory as the Megalithic Builders and Atlantis. It is perhaps unsurprising then to find several gold cups and many gold artifacts, such as golden "crowns" from this same territory, especially in Britain.
Because many sites and interpretations are being reexamined, old artifacts are being brought out of storage for additional investigation. This is happening with the Nordic Bronze Age, a culture that appears to have played a role in the Late Bronze Age Collapse. During this era, an unknown sea-faring confederacy of 9 or 10 tribes assaulted the eastern Mediterranean. As a Mediterranean archaeologist and researcher noted:
Eric Cline, an archaeologist-historian at George Washington University and author of 1177 B.C.: The Year Civilization Collapsed, stated in a presentation on this collapse:
"[The Late Bronze Age Collapse] catastrophe was enormous. It was a loss such as the world would not see again until the Roman Empire collapsed more than fifteen hundred years later. But what caused it?" (NCASVideo).We find a similar description of this collapse in Bently et al., Traditions & Encounters: A Brief Global History: Volume I: From the Beginning to 1500, 2016:
"About 1200 B.C.E., the Mycenaeans engaged in a conflict with the city of Troy in Anatolia. This Trojan War, which Homer recalled from a Greek perspective in his Iliad, coincided with invasions of foreign mariners in the Mycenaean homeland. Indeed, from 1100 to 800 B.C.E., chaos reigned throughout the eastern Mediterranean region. Invasions and civil disturbances made it impossible to maintain stable governments or even productive agricultural societies. Mycenaean palaces fell into ruin, the population sharply declined, and people abandoned most settlements" (Bently et al. 138-140).Ramesses II and Ramesses III both mentioned these foreign mariners, carving their military campaigns onto Egypt's stone temples. There are many written examples that describe this invasion.
"[T]he unruly Sherden whom no one had ever known how to combat, they came boldly sailing in their warships from the midst of the sea, none being able to withstand them." – Ramesses II, Tanis Stele IILikewise, Ramesses III commented on them:
"The foreign countries made a conspiracy in their islands. All at once the lands were removed and scattered in the fray. No land could stand before their arms, from Khatte, Qode, Carchemish, Arzawa, and Alashiya on, being cut off at [one time]. A camp [was set up] in one place in Amor. They desolated its people, and its land was like that which has never come into being. They were coming forward toward Egypt, while the flame was prepared before them. Their confederation was the Peleset, Tjekker, Shekelesh, Denyen, and Weshesh, lands united. They laid their hands upon the lands as far as the circuit of the earth, their hearts confident and trusting: "Our plans will succeed!"" – Ramesses III, New Kingdom Egypt Medinet Habu temple inscriptionsCompare that military statement to Atlantis's invasion:
Plato, Timaeus, c. 360 B.C.E.
This vast power, gathered into one, endeavoured to subdue at a blow our country and yours and the whole region within the straits.Helle Vandkilde, "Bronze Age Voyaging and Cosmologies in the Making: The helmets from Viksö Revisited": Counterpoint: Essays in archaeology and heritage studies in honor of professor Kristian Kristiansen, BAR International Series 2508, 2013:
"The warships in the Mediterranean [Late] Bronze Age sometimes had bird-headed devices on stern and rear and Homer mentions trunked or beaked ships (Wachsmann 1998), analogous to the Viksö helmets and other Urnfield items with Vogelsonnenbarke. Some of the ship-borne 'Sea People' warriors probably came from the western Mediterranean, and may even have included maritime warriors from the Atlantic zone and northern Europe. This idea of Urnfield-Mediterranean connections from c. 1200 BC onwards is not new (e.g. Kimming 1964; Wachsmann 1981, 1998; Kristiansen 1998: 96, 170ff), but it now gains new relevance by revisiting an old find. A thread leads from war and social upheaval in the east Mediterranean over Sardinia and Iberia to Viksö with offshoots to adventurous sea travels, warfare, material culture emulation, transfer of cosmological elements, myth-making and the transport of bronze along the Atlantic coasts" (Bergerbrant and Sabatini 175).The Nordic Bronze Age's potential trade links with the British Isles and its settlements. If elephants and giraffes could be brought to the far north, they could also be brought to the Isles.
By the 18th Century, researchers in North America and Europe were beginning to notice similarities between symbols and rituals on both sides of the Atlantic.
David McCullough, Yale University, two-time Pulitzer Prize winner and receiver of the Presidental Medal of Freedom, the nation's highest civilian award, The Pioneers: The Heroic Story of the Settlers Who Brought the American Ideal West, 2019:
"Accounts of [North America's mounds and earthworks] were already exciting eastern scholars. Ezra Stiles, the president of Yale, thought they proved the descent of the Indians from the Canaanites expelled from Palestine by Joshua. Benjamin Franklin speculated such mounds might have been constructed by Hernando de Soto in his wanderings" (McCullough 48-50).Emilius Oviatt Randall, The Serpent mound, Adams County, Ohio: Mystery of the Mound and History of the Serpent: Various Theories of the Effigy Mounds and the Mound Builders, 1905, pg. 120
“We have stated that the Great Serpent in Adams County is the largest and best preserved effigy relic of the Mound Builders, certainly in the United States and probably in the whole world. It has, however, a counterpart in the Old World. In Great Britain, as is well known, there are frequent remains of a race of people similar to, if not identical with, the Mound Builders of America. Their European relics, how- ever, are mostly of stone, seldom purely of earth. In Scotland there is a very remarkable and distinct ser- pent, constructed of stone. This work has so much in common with the Ohio serpent that we produce the description of it as given by Miss Gordon Cummin in "Good Words" for March, 1872. We also reproduce a cut of the Serpent of Loch Nell, showing its great resemblance to the Ohio Serpent."Right: Serpent Mound in Adam's County, Ohio; Left: Typical serpent style during the Nordic Bronze Age.
Charles C. Mann, 1491: New Revelations of the Americas Before Columbus, 2011
“In the absence of written records, researchers have developed techniques for teasing out evidence of the past. Among them is “glottochronology,” the attempt to estimate how long ago two languages separated from a common ancestor by evaluating their degree of divergence on a list of key words. In the 1970s and 1980s linguists applied glottochronological techniques to the Algonkian dictionaries compiled by early colonists. However tentatively, the results indicated that the various Algonkian languages in New England all date back to a common ancestor that appeared in the Northeast a few centuries before Christ” (Mann 43-44).The appearance of giants and horned serpents in the Eastern Woodlands. This map is based on language analysis, oral traditions, and cultural artifacts.
Comparison between a horned serpent oral tradition and two Eurasian horned serpent species.
Left: Petersborough Petroglyph Park figures; Right: Nordic Bronze Age figures.
Left: Petersborough Petroglyph Park's Nordic Bronze Age-style boat carving; Right: Nordic Bronze Age boats.
Left: Petersborough Petroglyph Park's Nordic Bronze Age-style boat carving; Right: Nordic Bronze Age \"Solar Ships\"
Several individuals have interpreted these carvings before. As "deanspic" summarizes on his flickr page:
Retired Harvard professor Barry Fell believes the petroglyphs are inscriptions by a Norse king named Woden-lithi (Servant of Odin), who was said to have sailed from Norway up the St. Lawrence River in about 1700 BC.Tribes across North and Central America have traditions of European colonizers before Columbus:
Rene Chateaubriand, “Voyages to America”, 1826
“The Indians are in agreement in saying that their fathers came from the west; they found the works of the Ohio just as they are to be seen today. But the date of this migration of the Indians from the west to the east varies according to the nations… Another tradition claims that the works of the Ohio were raised by white Indians. These white Indians, according to the red Indians, were to have come from the east; and when they left the lake without shores (the sea), they dressed like the palefaces of today.”Compiled accounts of oral traditions in Mesoamerica reveal a similar tale:
Igantius Donnely, Atlantis: The Antediluvian World, 1882
Clavigero tells us ("Hist. Antiq. del Messico," Eng. trans., 1807, vol. i.) that according to the traditions of the Chiapenese [native Mexicans] there was a Votan who ... came from the east. He built a great city in America called "Nachan," City of the Serpents ... The date of his journey is placed in the legends in the year 3000 of the world, and in the 10th century BC [1,000 B.C.E.]We find another tradition among the Algonquin tribes:
Archaeologica Americana, July 7th, 1919
“Limestone quarries in “Florida” are believed to have provided anchors for ancient international sea trade. John Johnston, Indian Agent of the Shawnee, reported an Algonquian tradition that they came to North America from across the (Atlantic) ocean and that white people using iron tools inhabited Florida. Homer said the Phoenicians anchored their ships with the help of a pierced stone [see Odyssey 13:77]” (Americana 271).Map of North American earthworks and burial mounds based on archaeological atlases. Many of these sites no longer exist.
T. Apolean Cheyney, Historical Sketch of the Chemung Valley, 1868:
“The tumulus, represented upon plate III, is [a] peculiar construction, appears to belong to a class of mounds different from any others embraced in this exploration. The work of construction has the ditch on the inside and the wall on the outside of the mound center as do the Druid Barrows of England. The mound from the peculiar form of its construction, as well as from the character of its contents, has much resemblance to the Barrows of the earliest Celtic origin, in the Old World ... A British Archaeologist says: “This is a perfect description of the ancient sepulchural barrows in the British Isles” (Cheyney 87-88).Lynda Norene Shaffer: Native Americans Before 1492, 1992:
“Only two hundred years ago, in the woodlands of Eastern North America, there were tens of thousands of large earthen mounds, all of which had been built by Native Americans. They were impressive structures. Visitors who saw them were amazed by the size of many, by their number, and the intricacy of their design. Yet the significance of these earthworks, indeed, their very existence, is one of the best kept secrets of American history.”Map of North America's burial mounds in 1894.
Even before Cyrus Thomas published the mound distribution map, most archaeological sites were long gone. As a couple of researchers noted:
Charles C. Jones, Jr., Southeastern United States archaeologist, The Antiquities of the Southern Indians, 1873:
“Within a generation most of the stone structures were gone and almost forgotten. They had become foundations, chimneys and the walls of new buildings. No one knew who had built these mysterious structures. It was supposed that such things could not have been built by Indians, since they were thought too primitive to create such architecture. It was supposed that perhaps the Spanish or Welsh Prince Madoc built them.”Left: Hopewell Culture axeheads; Right: European Bronze Age axeheads and personal artifacts.
Left: Hopewell Culture \"Keyhole Artifact\"; Right: Phoenician Symbols of Tanit.
Several researchers tried to understand the European-style artifacts they kept uncovering.
Dr. Augustus Christian Adolf Zestermann, Memoir on the European colonization of America, in Ante-Historic Times, 1851
"[W]as it necessary that they should sail in a straight line from Ireland or Norway to America? May they not, like the Northmen, have sailed from one island to another of the Northern Ocean, until at length, perhaps, after decades of years, they found the way to America as the Northman did in later times?"Stephen D. Peet, The Mound Builders: Their Relics and Works, 1891, pg. 299, 350:
"Was it owing to the extension of the Phoenician voyages or to the zeal of Druidic priests that these things were introduced? The contact seemed to have produced a marvellous effect. It was not a decline from the bronze age which we see in these familiar symbols, but the effect of contact with European voyagers in pre-Columbian times, pre-Columbian discovery in fact. The conclusion is startling, but this is the only way that we can account for the marvellous resemblances. Certainly no ordinary nature worship could produce a cultus which would combine all the elements of the eastern faiths Druidic, Phoenician, Hittite, all in one, nor could the law of growth account for the details as they are seen.”Cyrus Thomas, Problem with the Ohio Mounds [a 19th-century attempt to understand copper artifacts and other peculiar items]:
“Much more evidence of like tenor might be presented here, as, for example, the numerous instances in which articles of European manufacture have been found in mounds where their presence could not be attributed to intrusive burials, but the limits of the paper will not admit this. I turn, therefore, to the problem before us, “Who were the authors of the typical works of Ohio?” (Thomas 24).As a recent trans-Pacific researcher noted when describing these early investigations:
Alice Storey and Terry L. Jones, Diffusionism in Archaeological Theory: The Good, The Bad, and The Ugly, 2014:
“Conventional wisdom among American academics up to the 1890s was that the mounds were the works of a lost tribe of Israel, Phoenicians, or the Norse…”Dr. Troy Case and Christopher Carr, The Scioto Hopewell and Their Neighbors, Jul 24, 2008
“Most excavations of Ohio Hopewell ceremonial sites occurred from the 1840s through the 1920s. Unpublished information on site layouts, features, artifacts, and skeletal series from these investigations and some later ones have discouraged the analysis and cultural interpretation of the material legacy of Ohio Hopewell peoples. In one single Mound identified as “mound 25”, Warren K. Moorehead uncovered 69 copper and iron headplates and 92 copper and iron breastplates” (Case and Carr 6).Left: Two North American \"Sun Disc\" symbols; Right: Glyph-style characters from the Nordic Bronze Age, specifically the c. 2000 B.C.E. Nyköping site.
Distribution of Nordic Bronze Age \"Solar Wheel\" petroglyphs; each location has several examples.
Distribution of several North American sites with Nordic Bronze Age-style \"solar wheels.\"
Joseph M. Knapp, On the Great Hopewell Road, 1998:
“The federal government was instrumental in fostering the veer towards rationality in ‘Moundbuilder’ matters, specifically through the creation at the Smithsonian Institution of the Division of Mound Exploration, Bureau of Ethnology. Cyrus Thomas, a specialist in entomology as well as ethnology, was in 1881 appointed Director of this activity and in 1894 published a summary titled Report on the Mound Explorations of the Bureau of Ethnology, 1890-1891. In addition to developing the framework of North American Indian culture areas and mound classification largely still in use today, he reported results of the Divisions excavations proving that ‘Moundbuilder’ burial practices were seen among pre-Columbian Shawnee groups."Left: The Danza de Los Voladores rain-making ritual as practiced in modern-day Mexico; Right: Petroglyph from the Nordic Bronze Age's \"Tanum 311\" site.
Alfred O. Coffin, M.A., Alcorn Agricultural and Mechanical College, Rodney Mississippi, Origin of the Mound Builders — Thesis, 1889
"The words Atlas and Atlantic have no satisfactory etymology in any language in Europe or Asia, and we are certain no such roots are found in the Greek; but in the Nahuatl language we find their homes."Poseidon named his son Atlas, the island Atlantis, and the ocean Atlantic. There are similar terms in the Mexican Nahuatl language.
Works Cited: https://www.academia.edu/89614691/The_Atlantic_Confederacy_Works_Cited?source=swp_share
As the Fed begins their journey into a deflationary blizzard, they are beginning to break markets across the globe. As the World Reserve Currency, over 60% of all international trade is done in Dollars, and USDs are the largest Foreign Exchange (Forex) holdings by far for global central banks. Now all foreign currencies are crashing against the Dollar as the vicious feedback loops of Triffin’s Dilemma come home to roost. The Dollar Milkshake has begun.submitted by peruvian_bull to Superstonk [link] [comments]
The Fed, knowingly or unknowingly, has walked into this trap- and now they find themselves caught underneath the Sword of Damocles, with no way out…
Sword Of Damocles
“The famed “sword of Damocles” dates back to an ancient moral parable popularized by the Roman philosopher Cicero in his 45 B.C. book “Tusculan Disputations.” Cicero’s version of the tale centers on Dionysius II, a tyrannical king who once ruled over the Sicilian city of Syracuse during the fourth and fifth centuries B.C.
Though rich and powerful, Dionysius was supremely unhappy. His iron-fisted rule had made him many enemies, and he was tormented by fears of assassination—so much so that he slept in a bedchamber surrounded by a moat and only trusted his daughters to shave his beard with a razor.
As Cicero tells it, the king’s dissatisfaction came to a head one day after a court flatterer named Damocles showered him with compliments and remarked how blissful his life must be. “Since this life delights you,” an annoyed Dionysius replied, “do you wish to taste it yourself and make a trial of my good fortune?” When Damocles agreed, Dionysius seated him on a golden couch and ordered a host of servants wait on him. He was treated to succulent cuts of meat and lavished with scented perfumes and ointments.
Damocles couldn’t believe his luck, but just as he was starting to enjoy the life of a king, he noticed that Dionysius had also hung a razor-sharp sword from the ceiling. It was positioned over Damocles’ head, suspended only by a single strand of horsehair.
From then on, the courtier’s fear for his life made it impossible for him to savor the opulence of the feast or enjoy the servants. After casting several nervous glances at the blade dangling above him, he asked to be excused, saying he no longer wished to be so fortunate.”
Damocles’ story is a cautionary tale of being careful of what you wish for- Those who strive for power often unknowingly create the very systems that lead to their own eventual downfall. The Sword is often used as a metaphor for a looming danger; a hidden trap that can obliterate those unaware of the great risk that hegemony brings.
Heavy lies the head which wears the crown.
There are several Swords of Damocles hanging over the world today, but the one least understood and least believed until now is Triffin’s Dilemma, which lays the bedrock for the Dollar Milkshake Theory. I’ve already written extensively about Triffin’s Dilemma around a year ago in Part 1.5 and Part 4.3 of my Dollar Endgame Series, but let’s recap again.
Here’s a great summary- read both sides of the dilemma:
Triffin's Dilemma Summarized
(Seriously, stop here and go back and read Part 1.5 and Part 4.3 Do it!)
Essentially, Triffin noted that there was a fundamental flaw in the system: by virtue of the fact that the United States is a World Reserve Currency holder, the global financial system has built in GLOBAL demand for Dollars. No other fiat currency has this.
How is this demand remedied? With supply of course! The United States thus is forced to run current account deficits - meaning it must send more dollars out into the world than it receives on a net basis. This has several implications, which again, I already outlined- but I will list in summary format below:
Essentially, they print their own currency to buy Dollars. Wanting to earn interest on this massive cash hoard when it isn’t being used, they buy Treasuries and other US debt securities to get a yield.
As their domestic economy grows, their need and dependence on the Dollar grows as well. Their Central Bank builds up larger and larger hoards of Treasuries and Dollars. The entire thesis is that during times of crisis, they can sell the Treasuries for USD, and use the USDs to buy back their own currency on the market- supporting its value and therefore defending the peg.
This buying pressure on USDs and Treasuries confers a massive benefit to the United States-
The Exorbitant Privilege
This buildup of excess dollars ends up circulating overseas in banks, trade brokers, central banks, governments and companies. These overseas dollars are called the Eurodollar system- a 2016 research paper estimated the size to be around $13.8 Trillion USD. This system is not under official Federal Reserve jurisdiction so it is difficult to get accurate numbers on its size.
This means the Dollar is always artificially stronger than it should be- and during financial calamity, the dollar is a safe haven as there are guaranteed bidders.
All this dollar denominated debt paired with the global need for dollars in trade creates strong and persistent dollar demand. Demand that MUST be satisfied.
This creates systemic risk on a worldwide scale- an unforeseen Sword of Damocles that hangs above the global financial system. I’ve been trying to foreshadow this in my Dollar Endgame Series.
Triffin’s Dilemma is the basis for the Dollar Milkshake Theory posited by Brent Johnson.
The Dollar Milkshake
Milkshake of Liquidity
In 2021, Brent worked with RealVision to create a short summary of his thesis- the video can be found here. I should note that Brent has had this theory for years, dating back to 2018, when he first came on podcasts and interviews and laid out his theory (like this video, for example).
Here’s the summary below:
“A giant milkshake of liquidity has been created by global central banks with the dollar as its key ingredient - but if the dollar moves higher this milkshake will be sucked into the US creating a vicious spiral that could quickly destabilize financial markets.
The US dollar is the bedrock of the world's financial system. It greases the wheels of global commerce and exchange- the availability of dollars, cost of dollars, and the level of the dollar itself each can have an outsized impact on economies and investment opportunities.
But more important than the absolute level or availability of dollars is the rate of change in the level of the dollar. If the level of the dollar moves too quickly and particularly if the level rises too fast then problems start popping up all over the place (foreign countries begin defaulting).
Today however many people are convinced that both the role of the Dollar is diminishing and the level of the dollar will only decline. People think that the US is printing so many dollars that the world will be awash with the greenback causing the value of the dollar to fall.
Now it's true that the US is printing a lot of dollars – but other countries are also printing their own currencies in similar amounts so in theory it should even out in terms of value.
But the hidden issue is the difference in demand. Remember the global financial system is built on the US dollar which means even if they don't want them everybody still needs them and if you need something you don't really have much choice. (See DXY Index):
Although many countries like China are trying to reduce their reliance on dollar transactions this will be a very slow transition. In the meantime the risks of a currency or sovereign debt crisis continue to rise.
But now countries like China and Japan need dollars to buy copper from Australia so the Chinese and the Japanese owe dollars and Australia is getting paid in dollars.
Europe and Asia currently doing very limited amount of non-dollar transactions for oil so they still need dollars to buy oil from saudi and again dollars get hoovered up on both sides
Asia and Europe need dollars to buy soybeans from Brazil. This pulls in yet more dollars - everybody needs dollars for trade invoices, central bank currency reserves and servicing massive cross-border dollar denominated debts of governments and corporations outside the USA.
And the dollar-denominated debt is key- if they don't service their debts or walk away from their dollar debts their funding costs rise putting great financial pressure on their domestic economies. Not only that, it can lead to a credit contraction and a rapid tightening of dollar supply.
The US is happy with the reliance on the greenback they own the settlement system which benefits the US banks who process all the dollars and act as gatekeepers to the Dollar system they police and control the access to the system which benefits the US military machine where defense spending is in excess of any other country so naturally the US benefits from the massive volumes of dollar usage.
Other countries have naturally been grumbling about being held hostage to the situation but the choices are limited. What it does mean is that dollars need to be constantly sucked out of the USA because other countries all over the world need them to do business and of course the more people there are who need and want those dollars the more is the pressure on the price of dollars to go up.
In fact, global demand is so high that the supply of dollars is just not enough to keep up, even with the US continually printing money. This is why we haven't seen consistently rising US inflation despite so many QE and stimulus programs since the global financial crisis in 2008.
But, the real risk comes when other economies start to slow down or when the US starts to grow relative to the other economies. If there is relatively less economic activity elsewhere in the world then there are fewer dollars in global circulation for others to use in their daily business and of course if there are fewer in circulation then the price goes up as people chase that dwindling source of dollars.
Which is terrible for countries that are slowing down because just when they are suffering economically they still need to pay for many goods in dollars and they still need to service their debts which of course are often in dollars too.
So the vortex begins or as we like to say the dollar milkshake- As the level of the dollar rises the rest of the world needs to print more and more of its own currency to then convert to dollars to pay for goods and to service its dollar debt this means the dollar just keeps on rising in response many countries will be forced to devalue their own currencies so of course the dollar rises again and this puts a huge strain on the global system.
(see the charts below:)
To make matters worse in this environment the US looks like an attractive safe haven so the US ends up sucking in the capital from the rest of the world-the dollar rises again. Pretty soon you have a full-scale sovereign bond and currency crisis.
We're now into that final napalm run that sees the dollar and dollar assets accelerate even higher and this completely undermines global markets. Central banks try to prevent disorderly moves, but the global markets are bigger and the momentum unstoppable once it takes hold.
And that is the risk that very few people see coming but that everyone should have a hedge against - when the US sucks up the dollar milkshake, bad things are going to happen.
Worst of all there's no alternatives- what are you going to use-- Chinese Yuan? Japanese Yen? the Euro??
Now, like it or not we're stuck with a dollar underpinning the global financial system.”
Why is it playing out now, in real time?? It all leads back to a tweet I made in a thread on September 16th.
Tweet Thread about the Yuan
The Fed, rushing to avoid a financial crisis in March 2020, printed trillions. This spurred inflation, which they then swore to fight. Thus they began hiking interest rates on March 16th, and began Quantitative Tightening this summer.
QE had stopped- No new dollars were flowing out into a system which has a constant demand for them. Worse yet, they were hiking completely blind-
Although the Fed is very far behind the curve, (meaning they are hiking far too late to really combat inflation)- other countries are even farther behind!
Japan has rates currently at 0.00- 0.25%, and the Eurozone is at 1.25%. These central banks have barely begun hiking, and some even swear to keep them at the zero-bound. By hiking domestic interest rates above foreign ones, the Fed is incentivizing what are called carry trades.
Since there is a spread between the Yen and the Dollar in terms of interest rates, it thus is profitable for traders to borrow in Yen (shorting it essentially) and buy Dollars, which can earn 2.25% interest. The spread would be around 2%.
DXY rises, and the Yen falls, in a vicious feedback loop.
Thus capital flows out of Japan, and into the US. The US sucks up the Dollar Milkshake, draining global liquidity. As I’ve stated before, this has seriously dangerous implications for the global financial system.
For those of you who don’t believe this could be foreseen, check out the ending paragraphs of Dollar Endgame Part 4.3 - “Economic Warfare and the End of Bretton Woods” published February 16, 2022:
Triffin's Dilemma is the Final Nail
What I’ve been attempting to do in my work is restate Triffins’ Dilemma, and by extension the Dollar Milkshake, in other terms- to come at the issue from different angles.
Currently the Fed is not printing money. Which is thus causing havoc in global trade (seen in the currency markets) because not enough dollars are flowing out to satisfy demand.
The Fed must therefore restart QE unless it wants to spur a collapse on a global scale. Remember, all these foreign countries NEED to buy, borrow and trade in a currency that THEY CANNOT PRINT!
We do not have enough time here to go in depth on the Yen, Yuan, Pound or the Euro- all these currencies have different macro factors and trade factors which affect their currencies to a large degree. But the largest factor by FAR is Triffin’s Dilemma + the Dollar Milkshake, and their desperate need for dollars. That is why basically every fiat currency is collapsing versus the Dollar.
The Fed, knowingly or not, is basically in charge of the global financial system. They may shout, “We raise rates in the US to fight inflation, global consequences be damned!!” - But that’s a hell of a lot more difficult to follow when large G7 countries are in the early stages of a full blown currency crisis.
The most serious implication is that the Fed is responsible for supplying dollars to everyone. When they raise rates, they trigger a margin call on the entire world. They need to bail them out by supplying them with fresh dollars to stabilize their currencies.
In other words, the Fed has to run the loosest and most accommodative monetary policy worldwide- they must keep rates as low as possible, and print as much as possible, in order to keep the global financial system running. If they don’t do that, sovereigns begin to blow up, like Japan did last week and like England did on Wednesday.
And if the world’s financial system implodes, they must bail out not only the United States, but virtually every global central bank. This is the Sword of Damocles. The money needed for this would be well in the dozens of trillions.
The Dollar Endgame Approaches…
(Many of you have been messaging me with questions, rebuttals or comments. I’ll do my best to answer some of the more poignant ones here.)—-----
Q: I’ve been reading your work, you keep saying the dollar is going to fall in value, and be inflated away. Now you’re switching sides and joining the dollar bull faction. Seems like you don’t know what you’re talking about!
A: You’re mixing up my statements. When I discuss the dollar losing value, I am referring to it falling in ABSOLUTE value, against goods and services produced in the real economy. This is what is called inflation. I made this call in 2021, and so far, it has proven right as inflation has accelerated.
The dollar gaining strength ONLY applies to foreign currency exchange markets (Forex)- remember, DXY, JPYUSD, and other currency pairs are RELATIVE indicators of value. Therefore, both JPY and USD can be falling in real terms (inflation) but if one is falling faster, then that one will lose value relative to the other. Also, Forex markets are correlated with, but not an exact match, for inflation.
I attempted to foreshadow the entire dollar bull thesis in the conclusion of Part 1 of the Dollar Endgame, posted well over a year ago-
Unraveling of the Currency Markets
I did not give an estimate on when this would happen, or how long DXY would be whipsawed upwards, because I truly do not know.
I do know that eventually the Fed will likely open up swap lines, flooding the Eurodollar market with fresh greenbacks and easing the dollar short squeeze. Then selling pressure will resume on the dollar. They would only likely do this when things get truly calamitous- and we are on our way towards getting there.
The US bond market is currently in dire straits, which matches the prediction of spiking interest rates. The 2yr Treasury is at 4.1%, it was at 3.9% just a few days ago. Only a matter of time until the selloff gets worse.
Q: Foreign Central banks can find a way out. They can just use their reserves to buy back their own currency.
Sure, they can try that. It’ll work for a while- but what happens once they run out of reserves, which basically always happens? I can’t think of a time in financial history that a country has been able to defend a currency peg against a sustained attack.
Global Forex Reserves
They’ll run out of bullets, like they always do, and basically the only option left will be to hike interest rates, to attract capital to flow back into their country. But how will they do that with global debt to GDP at 356%? If all these countries do that, they will cause a global depression on a scale never seen before.
Britain, for example, has a bit over $100B of reserves. That provides maybe a few months of cover in the Forex markets until they’re done.
Furthermore, you are ignoring another vicious feedback loop. When the foreign banks sell US Treasuries, this drives up yields in the US, which makes even more capital flow to the US! This weakens their currency even further.
FX Feedback Loop
To add insult to injury, this increases US Treasury borrowing costs, which means even if the Fed completely ignores the global economy imploding, the US will pay much more in interest. We will reach insolvency even faster than anyone believes.
The 2yr Treasury bond is above 4%- with $31T of debt, that means when we refinance we will pay $1.24 Trillion in interest alone. Who's going to buy that debt? The only entity with a balance sheet large enough to absorb that is the Fed. Restarting QE in 3...2…1…
Q: I live in England. With the Pound collapsing, what can I do? What will happen from here? How will the governments respond?
England, and Europe in general, is in serious trouble. You guys are currently facing a severe energy crisis stemming from Russia cutting off Nord Stream 1 in early September and now with Nord Stream 2 offline due to a mysterious leak, energy supplies will be even more tight.
Not to mention, you have a pretty high debt to GDP at 95%. Britain is a net importer, and is still running government deficits of £15.8 billion (recorded in Q1 2022). Basically, you guys are the United States without your own large scale energy and defense sector, and without Empire status and a World Reserve Currency that you once had.
The Pound will almost certainly continue falling against the Dollar. The Bank of England panicked on Wednesday in reaction to a $100M margin call on British pension funds, and now has begun buying long dated (10yr) gilts, or government bonds.
They’re doing this as inflation is spiking there even worse than the US, and the nation faces a currency crisis as the Pound is nearing parity with the Dollar.
BOE announces bond-buying scheme (9/28/22)
I will not sugarcoat it, things will get rough. You need to hold cash, make sure your job, business, or investments are secure (ie you have cashflow) and hunker down. Eliminate any unnecessary purchases. If you can, buy USDs as they will likely continue to rise and will hold value better than your own currency.
If Parliament goes through with more tax cuts, that will only make the fiscal situation worse and result in more borrowing, and thus more money printing in the end.
Q: What does this mean for Gamestop? For the domestic US economy?
Gamestop will continue to operate as I am sure they have been- investing in growth and expanding their Web3 platform.
Fiat is fundamentally broken. This much is clear- we need a new financial system not based on flawed 16th fractional banking principles or “trust me bro” financial intermediaries.
My hope is that they are at the forefront of a new financial system which does not require centralized authorities or custodians- one where you truly own your assets, and debasement is impossible.
I haven’t really written about GME extensively because it’s been covered so well by others, and I don’t feel I have that much to add.
As for the US economy, we are still in a deep recession, no matter what the politicians say- and it will get worse. But our economic troubles, at least in the short term (6 months) will not be as severe as the rest of the world due to the aforementioned Dollar Milkshake.
The debt crisis is still looming, midterms are approaching, and the government continues to deficit spend as if there’s no tomorrow.
As the global monetary system unravels, yields will spike, the deleveraging will get worse, and our dollar will get stronger. The fundamental factors continue to deteriorate.
I’ve covered the US enough so I'll leave it there.
Q: Did you know about the Dollar Milkshake Theory before recently? What did you think of it?
Of course I knew about it, I’ve been following Brent Johnson since he appeared on RealVision and Macrovoices. He laid out the entire theory in 2018 in a long form interview here. I listened to it maybe a couple times, and at the time I thought he was right- I just didn’t know how right he was.
Brent and I have followed each other and been chatting a little on Twitter- his handle is SantiagoAuFund, I highly recommend you give him a follow.
I’ve never met him in person, but from what I can see, his predictions are more accurate than almost anyone else in finance. Again, all credit to him- he truly understands the global monetary system on a fundamental level.
I believed him when he said the dollar would rally- but the speed and strength of the rally has surprised me. I’ve heard him predict DXY could go to 150, mirroring the massive DXY squeeze post the 1970s stagflation. He could very easily be right- and the absolute chaos this would mean for global trade and finance are unfathomable.
History of DXY
Q: The Pound and Euro are falling just because of the energy crisis there. That's it!
Why is the Yen falling then? How about the Yuan? Those countries are not currently undergoing an energy crisis. Let’s review the year to date performance of most fiat currencies vs the dollar:
Japanese Yen: -20.31%
Chinese Yuan: -10.79%
South African Rand: -10.95%
English Pound: -18.18%
Swiss Franc: -6.89%
South Korean Won: -16.73%
Indian Rupee: -8.60%
Turkish Lira: -27.95%
There are only a handful of currencies positive against the dollar, the most notable being the Russian Ruble and the Brazilian Real- two countries which have massive commodity resources and are strong exporters. In an inflationary environment, hard assets do best, so this is no surprise.
Q: What can the average person do to prepare? What are you doing?
Obligatory this is NOT financial advice
This is an extremely difficult question, as there are so many factors. You need to ask yourself, what is your financial situation like? How much disposable income do you have? What things could you cut back on? I can’t give you specific ideas without knowing your situation.
Personally, I am building up savings and cutting down on expenses. I’m getting ready for a severe recession/depression in the US and trying to find ways to increase my income, maybe a side hustle or switching jobs.
I am holding my GME and not selling- I still have some shares in Fidelity that I need to DRS (I know, sorry, I was procrastinating).
For the next few months, I believe there will be accelerating deflation as interest rates spike and the debt cycle begins to unwind. But like I’ve stated before, this will lead us towards a second Great Depression very rapidly, and to avoid the deflationary blizzard the Fed will restart QE on a scale never seen before.
QE Infinity. This will be the impetus for even worse inflation- 25%+ by this time next year.
It’s hard to prepare for this, and easy to feel hopeless. It’s important to know that we have been through monetary crises before, and society did not devolve into a zombie apocalypse. You are not alone, and we will get through this together.
It’s also important to note that we are holding the most lopsided investment opportunity of a generation. Any money you put in there can be grown by orders of magnitude.
We are at the end of the Central Bankers game- and although it will be painful, we will rid the world of them, I believe, and build a new financial system based on blockchains which will disintermediate the institutions. They have everything to lose.
Q: I want to learn more, where can I do? What can I do to keep up to date with everything?
You can start by reading books, listening to podcasts, and checking the news to stay abreast of developments. I have a book list linked at the end of the Dollar Endgame posts.
I’ll be covering the central bank clown show on Twitter, you can follow me there if you like. I’ll also include links to some of my favorite macro people below:
Nothing on this Post constitutes investment advice, performance data or any recommendation that any security, portfolio of securities, investment product, transaction or investment strategy is suitable for any specific person.
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Case study: In the 1980s, Japan's economy was booming. It's the #2 economy behind the United States as its exporting a lot of Toyota, Fujitsu, Panasonic, name it. From Y240 in 1985, it appreciated so much that by 1995 it hit Y80. At its peak, it temporarily made Japan's economy nearly the same size of the US but it hurt export growth and the industrial base so much that Japan never really recovered their number two spot ceding it to China (it now grapples with deflation throughout much of the 2000s).I moved from PHP to USD/EUGBP, what do I need to know?
Case Study #2: Ironically, China learned from this and intentionally made the Yuan undervalued versus the USD throughout most of its economic growth cycle. It does this by buying US currency and treasury notes in the market and this is also why they have massive foreign reserves.
The cheap Yuan gives China an unfair advantage in the export market and couple this with their manufacturing base means the rise of China to be the number-two economy through "Made in China"
A short intro to this post seriessubmitted by galeej to IndiaSpeaks [link] [comments]
We're starting this post series that will focus on economics, policy, current affairs and politics to a certain extent from a data backed lens. The idea is to critically analyze, using relevant data, topics that citizens should ideally know and understand. The topics covered will be wide and varied.
The politics behind petrol
The price of petrol and diesel – Why is it so high?
The price of petrol and the price of diesel has been going steady like the VVS Laxman and Rahul Dravid partnership in the fabled Eden Garden test match; and just like that partnership, there does not seem to be any let up. Prices of fuel in India seem like an anomaly when compared to the prices in our neighbourhood. Its often makes for an interesting comparison article where people compare the prices of petrol across our neighbours and show how “costly” it is here.
While the price of petrol is always known to be high due to duties, it is very important to analyze why and what impact these duties have on the economy.
First, lets start off by analyzing and breaking down the price of petrol and where it goes. The table below shows the breakdown of taxes and duties for 1 litre of petrol in Delhi (oct 2021):
Split of petrol and diesel prices and its cess
As you can see, around 31% of the price of petrol goes to the central government while around 23% goes to the state government. This effectively means that around 54% - 60% of the cost of fuel goes to the government. So remember, the next time you fill a litre of petrol, you’re effectively giving 60% of the fuel price to the government as a tax.
An interesting aside to note here is that Fuel and Alcohol (consequently two cash cows for many a government) is interestingly out of the purview… likely because the GST rate stops at 28%... but that is an article for another day.
The history of pricing of petrol and diesel
Historically, India did not have a free market pricing for petrol and diesel. Petrol and diesel would be imported by the government and the government would set the price that would be payable by the citizens for using it. The advantage of this method of pricing lies in the fact that the government can choose to keep prices somewhat stable and protect the citizens from random shocks in prices that affected petrol prices during OPEC shutdowns (refer to the US petrol crisis in the mid 1960s). However, the disadvantage is that when prices continuously increase, the government will go into debt if they do not commensurately increase the price of petrol/diesel.
Backdrop in 2004 and economic impact of oil
The 2004 year ended with spiralling petrol prices due to supply related crunches. The price of crude, which was around $36 a barrel, skyrocketed to $57 a barrel. The price of oil kept increasing due to supply side constraints.
The problem with increasing oil for India meant a couple of things:
The government of India therefore decided to issue the infamous “Oil Bonds” in order to plug the gap between the total collections from citizens the additional gap. The issue? This is debt. And debt has to be repaid in the future.
The government effectively pushed the problem to the future generations for their current consumption. This was effectively mentioned by Dr. Manmohan Singh, the then PM in the quote:
“However, I would like the nation to remember that issuing bonds and loading deficits on oil companies is not a permanent solution to this problem. We are only passing on our burden to our children who will have to repay this debt” – Dr. Manmohan Singh 4th Jan 2008What initially started off as a Rs. 9000 cr oil bond in 2005 swelled into a Rs. 1.4 lac crore problem for the government in 2014.
The total interest payments alone come to close to 1.3 lac crores since the year 2011 (see table below). The table below shows the amount of principal and interest payments that have been paid since 2011 and the expected settlement patterns of the loans.
Settlement patterns for oil bonds (E is marked by Expected settlement pattern)
*Table showing current and expected settlement of oil bonds
**Source – Union budget of India (receipts)
The last of the oil bonds will be settled in 2026.
Inputs != outputs
The idea of the oil bonds was simple. The government of India raises bonds for capital today (which was used to purchase oil and subsidize it for the citizens) in lieu of a payment of interest over the course of the tenure of the bond and eventual repayment of capital (not very dissimilar to a loan taken for paying your house).
Curiouser and curiouser still is the receipts from duties. One would expect the duties to add up to the interest + principal component of the loan. Think of duties here as the EMI that you pay to your house (it’s not an accurate comparison, but it’s late in the night and this is the best I could come up with). You take a 10 lac loan to buy a house at a 7% interest rate from a bank; you would ideally expect to pay only the principal + interest in the EMIs.
However, it’s very interesting to note that the duties and surcharges are in fact much, much higher than the actual bond itself. In fact, the duties and surcharges in the 2022-23 budget (which is receipts collected in 2020-21) is in fact greater than the actual principal + interest that is due.
Breakdown of tax revenue in a budget and the corresponding cess in petrol and diesel collected
Split of revenue and share of petrol and diesel cess
**Source – Union budget of India (receipts)
Graph of share of cess/duties in petrol and diesel to overall tax revenue
Graph showing the share of petrol and diesel cess to the overall tax revenue
One can easily infer from the table and graph on the events that have transpired:
The share of collections on petrol and diesel duties has been steadily increasing from 2014. One can clearly see a huge increase from the 2016-17 numbers and the 2017-18 numbers where the share of duties as a % of tax revenue has doubled. The share has reached a mammoth 13.43% of all tax revenues collected.
The cess that was initially supposed to cover only the interest and principal payments of the bonds that were floated has now morphed into a source of revenue for the government. What is very interesting to note is that the total cess collected as per the 2022-23 budget (which show the numbers collected in 2020-21) show that the absolute value of the cess (rs. 1.92 lac crores) is greater than the total principal + interest amount that is actually due (which is a little short of 1.37 lac crores). This is somewhat like your bank collecting the entire loan amount and then some in a single year.
What can be inferred from this
A couple of things really:
Source for data: Multiple union budget documents taken from the website (https://www.indiabudget.gov.in/)
The End game has begun. Stagflationary 1972-73 Price pump or Deflationary 2008 bust.? I am prepared for both ;)submitted by DesmondMilesDant to wallstreetbets [link] [comments]
Apologies beforehand for a lot of verbose because of the final newsletter. For quick read up i suggest reading "Tl;dr section" ( headings ) and for the reasons behind it are included in the detailed "Experiment section".
“I felt a great disturbance in the force as if millions of voices slowly and wildly got together and then there was an uprising against the government and the financial institutions”Sorry guys, I was supposed to send this the day before yesterday ( great movie ) but unfortunately I got caught up in a celebration we are having over here.
So it's the start of the weekend. Y’all know what that means. I'm not talking about having a party lol, that is for me. You guys have to decipher this long post so that you can protect yourself from the upcoming danger that I am seeing. In short you’re fucked if you don’t read this especially institutions and hedge funds. Just for this week please avoid strip clubs. This one's for you guys because you read my post. ( I like to think so )
Retail public especially retards i don’t have words for you guys. You guys can chill this weekend because all you do is sh9t on my post. Might as well sh9t on this too. I don’t care since all you’re obsessed with is Ryan Cohen and $BBBY. So when you’re finally over him after getting drunk this weekend then you can go ahead and read this post. Could be worth your time.
As for people asking me why I don't give my opinions regarding meme stocks. Well folks the reason is simple. We are still in a bear market according to my calculations. So it's written somewhere in the gospel of investing that bear markets are the opportunities to analyze value companies, not meme companies which are about to be purge in the upcoming mega crash as an offering to please the gods of stock market.
Yes you “You-tube” folks the crash hasn’t even started yet. We still have -53% to go from here till March 2023 as my base case. Don't even ask me about my worst case. For that just open the Dow Jones 1929-1932 chart.
Tl;dr and Td;du folks : ( Too long didn't read, Too dumb didn’t understand )
We have already discussed this : Buy 4 months/2 months/1 months puts i.e Dec 30/Oct 29/Sept 29 at the money with strike price near about "200 day moving average = 200dMA" in $SPY last week of august if it comes.
It already did one time on August 16 and i think the top is already in. So you’re gonna profit regardless.
Invalidation would be three white soldier candles above 200dMA of course in daily chart. For positions go scroll down. ( I will make you work for it at-least. xD )
We have a long way to go friends.
Now for those folks who want a detailed explanation about everything let’s dive in.
Respected Traders and Investors,
How are you guys doing? It’s been a long time hasn’t it. God I was gone for a while and had Ni-san use my Reddit account for a few days. First of all, I'm gonna apologize for the Shzio post by my brother Itachi. Man, it felt like it messed up my brains for a while there. It was so damn trippy. So I highly highly advise you guys not to go and read it a second time. Please, it's for your own health.
Regardless i love my brother analysis coz he thinks like no other normal people do in the world of trading/investing. So, I take full responsibility for my actions and if things don't go as planned out in the above charts ( i.e the mega crash doesn’t happen you know ) then you’re not gonna hear from us.
P.s. We promised you that we will do these posts only in bear markets. Even if the USA goes into depression for 10 to 15 years we will post in a week or two until we visit ath ( all time high ) once again. One may ask why not do this stuff in the bull market? Guys you have to understand we are not bull market specialists. For bull markets it's generally advised to follow moon boys on twitter, tik-tok, You-tube etc. They are more educated and well informed than us in that department with a huge audience behind them. ( They spend so much on marketing lol )
Recap : Predictions 2022 so far.
I don’t usually like to do this because my readers already know about this but it’s time to back-test how accurate we ( i.e. me and my brother ) have been this whole time especially to show random people who are new to reading these kinds of posts especially when it’s season finale.
And then there were bond, commodity, Dxy calls that we are not even mentioning.
What this all means is that the stock markets have been performing as we had hoped for since February which is like 6-7 months ago. So i guess we are not a broken clock and actually do provide the exact days or should i say the time horizon.
Am I a member of secret society i.e. "Illuminati” or have contacts in "Pay pal mafia" ?
No guys. I am not a member of secret society nor do i have any contacts. My brother do though. I do want to manage the portfolio of wealthy clients like my brother someday but I'm too lazy. I just want to take bets and watch anime and Tv shows my entire life. I just finished West world and now i guess i will watch episode 1 of “House of dragons”. ( Why did that producer said bad things about Emilia. Hmm ) As for anime recommendation man its getting hard to find good ones. I'm just waiting for Chainsaw man now.
About my self.
Before all of this I was a Computer Science student whose only good skill was learning a hybrid application development platform called Flutter ( By Google ) but now I just write detailed and boring posts on Wall Street bets about anything that comes to my mind for you guys. My predictions come right because of you folks so thank you for taking trades and also I just basically copy pasted 2008 charts ( 32nd death week ) like I do with Git-hub while programming.
Now will I be wrong in the future?
Of course I will be. I’m no economist. I just make cases i.e stock market = 1972-73 or 2008 and just bet on them. Also a big hedge fund guy might find my post someday and take the opposite trade against me wrecking people who followed my advice.
Hence i always tell you guys “Do your own research“ “This is not financial advice” even though it will be right most of the time. You absolutely should not follow anybody w/o checking out at-least 10 other guys.
Why take my advice ?
So now that we have cleared some of the confusion which I couldn't in my Wsb guest talk appearance you might be thinking why we should even consider your advice in the top 10 folks we watch. You’re a nobody. Well folks in my defense i would say it's because I gradually improved myself. Earlier my posts were shitty but now they are getting better especially my T.A. And I'm also learning economics day by day. Do you know guys I didn't wanted to write this as final post coz I was actually busy working on other post like “Deciphering Stagflation 70's” and “Thermodynamics in Economics” as my farewell post. Yes it's true guys the US economy is one giant open system. That’s how Elon Musk and Jerome Powell do calculations about economics. xD
Well enough spoilers about the next season. I know you guys are getting bored. So lets now finally jump in what i wanted to actually talk about.
I mean the Technicals i will be using today includes :
-> Candle sticks
-> Elliot wave with Fibonacci
-> Stochastic Rsi
-> My favorite which never ever lies : Pvt(O)
-> At last my “Ketlner channels”
Step 1 : Forex Markets
Eur-usd : Have you ever seen such a bearish chart in your life both on a weekly and monthly basis? I mean as much as I love European countries but I have to say your Eur-usd charts sucks equally much. Putin owns you guys this winter. Italy and Germany are already suffering so much with 10x bills gas + electricity if compared with 2021 so i can't even imagine about countries like Spain, Greece etc. Okay so I'm gonna stop myself now with the pessimism and dive into Technicals.
Weekly Time Frame Analysis : ( Left chart )
Monthly Time Frame Analysis : ( Right chart )
Result : I can confidently say with 1000% certainty that Eur-usd is going down. Thank you madam Lagarde. You’re doing such a fine job by selling German Bund and buying Italian bonds. Congratulations to you and your PEP tool (Lol, guys this woman is bat-sh9t crazy)
Gbp-usd : Well first Sir Mr Bailey. I have to say I'm a big fan of your honesty if you are reading this. I mean in today's world it's hard to find someone that honest in a government job. So guys we know inflation is double digit’s over here ( heading to 13% or was it 15% in coming months ) and in September the Bank of England is going with 50 bps. So we already know that Uk is gonna have more than 2Q of -ve Gdp. I hope you Uk folks survive considering you're gonna lose jobs, probably go into economic depression because recession is everybody’s base case even of Mr Bailey. So enough details let’s do analysis.
Weekly Time Frame Analysis : ( Left chart )
Monthly Time Frame Analysis : ( Right chart )
Result : I can confidently say Gbp-usd is going down. Mr Soros if you’re listening to this, let's break the “Bank of England” once again. Just for good old times sake.
Usd-jpy : If i tell you anything about this forex pair I’m probably Bs’ing you. It’s true guys. Even Mr Kuruda the governor of Boj doesn’t know where the Usd-jpy is gonna go. But what we can speculate is if the dollar becomes so much stronger due to the weakness in the Eur-usd equation then Dxy is gonna pump past 110 and the dollar becomes stronger. Got it. So I could easily play this approach into my thesis by telling you yes this pair is just gonna go up. But I will not do that. Instead I'm gonna play a devil’s advocate here saying Usd-jpy will go down. So let’s analyze things which are a total waste of your and my time because I'm gonna reverse this forex you will see how.
Weekly Time Frame Analysis : ( Left chart )
Monthly Time Frame Analysis : ( Right chart )
So since I took the bear case it doesn't look like any bearish to me. Don't you agree? So our devil in devil’s advocate looks weak. So to fit our thesis lets reverse this. This is kinda like physics or Math kind of stuff where we proof things by assuming inverse.
Result : I cannot confidently say but I will say Jpy-usd is going up to 148 at my favorite dot com times where Dxy went 120. Hence i’m selling my Yen trust with ticker $FXY.
Step 2 : DXY. A basket of forex currencies.
You must be wondering, I'm gonna introduce another colorful RGB crayon drawing chart on both weekly and monthly. Sorry to disappoint you folks but I'm not doing that. Instead let’s use our brains.
We know that US dollar Index i.e. Dxy is used to measure the value of the dollar a/g basket of 6 currencies. The Euro, Swiss Franc, Japanese Yen, Canadian Dollar, British pound and Swedish krona. Now I'm not gonna explain you here why dollar is global reserve currency or dollar has more liquidity so let’s just assume that.
So what happens now is when Eur-usd becomes weaker, investors usually go risk off and buy the safest asset in the world i.e Dollar. Hence the Dxy goes stronger which suggests the dollar is getting stronger coz european buddies will exchange for dollars coz its very liquid and due to interest rate differentials. ( Remember Gbp-usd is an exception to interest rate differential coz what's happening over there is interest rates will go up but their currency is still losing its strength )
We have discussed a thesis in past letters already and came to a conclusion and I quote.
“Eur-usd is a mirror image of the Dxy chart.” Remember this for your lifetime. Especially you Gen-z.
I wasn’t gonna post a chart but then I realized I should for new folks who are lazy to read past posts. Eur-usd breaks parity and goes 0.80 levels Dxy will be 120 for sure. In monthly Dxy is super bullish. And on a weekly basis it's trying to close above 107 i believe. Hence your Voldemort asset class dropped -8% i guess. Right ?
Mirror chart : DXY vs Eur-usd
Result : I can confidently say Dollar or DXY is getting stronger in comparison to Euro, Gbp and Jpy. Hence DXY to 120 is back on the table according to the “20yrs of wyckoff accumulation” pattern. If you cleanly break 110-112 i must say equities especially the Spx is gonna visit to my $3200 level.
Now some Cnbc or Bloomberg guys who stole my research and didn’t gave me credit 2-3 months ago used to come on tv and say things like “Oh in 2018 Spx visited 200wMA so it makes sense that this cycle which is even more tightening compared to last makes sense to visit this range.”
So folks now the Spx has shifted its 200wMA/50mMA = $3500-$3600. But these clowns oops economists don't know that we should take a look at the monthly chart. Once you open that. Your pants are about to drop coz in the last tightening we visited not 200wMA but 100 monthly moving average i.e 100mMA. Yeah let’s go visit makachev vs oliviera in oct 23rd ufc 280. So if we cross paths over there I will tell you we are going to Spx $2873 i.e. somewhere around $2800-2900 which my close friend Dr Burry suggested too. Hence he sold + he is shorting coz he has relieved every moment in 2008. So he knows what’s coming next. You guys don’t.
Step 3 :Eur-usd Implied Fed funds 100-CME:GEZ2023 ( Not gonna use Elliot wave + Fib trend starting here now )
This is like gonna be super high level stuff even far above my pay grade. Only Zoltan can explain this using repo markets but since he is busy I will try to explain it in a funny way. So if you might have watched Cnbc this past week two economists were arguing about how Fed funds have priced in 4% already but one might be saying no it has only priced in 3.4-3.5%. So who is right?
If you watch “Everything money” by my suggestion then Mo came to the conclusion that the reason he is saying 4% is because the Fed is doing QT + rate hikes which Mo still does not believe.
So who is right and what is the right explanation for 4% ?
Imo they both are right but the explanation is wrong. The reason one should present about the 4% Fed funds argument is that in Eur-usd implied Fed funds went to 4%. Hence the market has priced 4% in the euro dollar banking system. But if you take only the dollar banking system in Usa then we look at yields of 2 yr and 10 yr which are hinting that Fed funds 3.4-3.5% is already priced in by the markets.
Eur-usd implied Fed funds.
Monthly and weekly time frame analysis :
Result : I can confidently say that we are going up here technically. So J. Powell, could you please back me up on this. Zoltan agrees with me. Snyder doesn’t.
( Just remember implied fed funds can go up due to Eur-usd weakness. So its kinda like indirect interest rate hike for markets. Add QT on top of that. Hence Fed is dovish in Fomc minutes for rate hikes )
Step 4 : HYG & LQD : The corporate bonds
Hyg : This product is designed to replicate a benchmark which provides a broad representation of the U.S. dollar-denominated high yield liquid corporate bond market. The high yield bond space has been cracked wide open by ETFs, as these products have offered numerous ways for investors to take advantage of this space. High yields can be a great addition to a yield-starved portfolio, as they can offer yields into the double digits for those willing to take on the risks that come along with it. The high returns come from riskier bond choices who have to pay out higher ratios to compensate investors for high risks. This means that the holdings of these ETFs will have higher chances of defaults, and could potentially leave investors out to dry. But those who have done their homework on the holdings of a particular “junk” bond fund have the ability to generate strong returns from these powerful products. HYG keeps most of its assets inside of the U.S., though it does offer a slice of international exposure as well. The ETF is dominated by corporate bonds, the majority of which have investment grades between B and BB. This product will make a great income addition to any investor who is fully aware of the risks a high yield bond product carries.
Weekly time frame analysis :
Monthly time frame analysis :
LQD : I leave it up to you guys. Cmon at least do one.
Result : I cannot confidently say that we are going down on a monthly time frame ( i need to see more data ) but yah sure on weekly we are going down because of that deadly candle that folks have been talking about.
Step 5 : IEI/HYG : Government bond price / Corporate bond price.
IEI/HYG : Double check below thing.
IEI/HYG : If it goes up then credit spreads are widening. ( Bad thing i.e risk off )
IEI/HYG : If it goes down then credit spreads are tightening. ( Good thing i.e. risk on )
Weekly time frame analysis :
Monthly time frame analysis :
Result : I cannot confidently say that we are going up on a monthly time frame ( i need to see more data ) but yah sure on weekly we are going up.
Step 6 : ( Super scary ) : Velocity of m2 or m1 money supply i.e v = us gdp / m1 or m2.
Velocity of M2
This is a very debatable topic. Only the pros have the right to argue about this stuff and no one else. Peter lynch once told me during my time travel visit that people worry that the velocity of money supply is going up way too fast then we are gonna have depression and if the velocity of money supply goes down then too we are gonna have depression. So which one is it?
Anyways Q3 2020 : 1.149 was the highest reading. Currently we are trying to break it. Q2 2022 : 1.147
"The velocity of money is the frequency at which one unit of currency is used to purchase domestically- produced goods and services within a given time period. In other words, it is the number of times one dollar is spent to buy goods and services per unit of time. If the velocity of money is increasing, then more transactions are occurring between individuals in an economy. This is called an expanding economy." ~ By Fred website.
So go out there and ask your banking friends and tell them please explain the concept of money supply in today's terms. Not an old term. So I too went to my brother for advice. He told me “ F off “
Result : “F off”
Step 7 : Gold
We are not gonna do weekly and monthly time frame analysis on this. Some of you guys may be like “Dude, I'm an old man with agricultural land. I wanna own gold like my ancestors from 18th century coz i believe in stagflation, parabolic move, end of the world, negative debasement hedge blah blah” So i need charts.
Old man's Gold :
Old man you need to chill. We are gonna use our brain like Peter Schiff. So we know, gold doesn't love that his nemesis dollar is going up. Now if you can tell me how high Dxy will go up then i can tell you that the top of Dxy will be the bottom of Gold. Also gold doesn’t love financial crisis or bank runs. In my world gold is a phoenix who rises from ashes. Meaning if we plunge into the abyss then gold is gonna drag us out of there first. Then indices move and other asset classes.
Digital Gold :
As for young folks, you love the King of Voldemort asset class don’t you? So go buy it at amazon bottom i.e. $4-5k or my favorite Richard heart level -83% i.e 10,690. Or if you really don't have the patience like probably 99% of the entire world population you buy some % of this commodity for whatever reasons these guys are selling you at $20k. I shall rest my case now.
Result : Dollar i.e. Dxy up = Gold down and vice versa.
Step 8 : TLT/JNK : It’s kinda like IEI/HYG
Can you guys do this please?
Hint : Bullish divergence on weekly and monthly. Meaning TLT ( 20yr treasury bond etf by black rock ) buying over Junk bonds i.e. JNK
Step 9 : US Oil.
Let's go Brandon and the government. Just how much are you gonna manipulate the best inflation hedge alive. You guys have already killed my Gold. Yes you J.P. Morgan traders, I hate you. May your bank dies in upcoming crash and have Panic of 2023 just like Knickbocker crisis in 1907. Only then I shall have my vengeance a/g those rumors you circulated back in the days.
So guys you probably would know this that our Usa Government try to manipulate oil market just to please people and ask for votes. These are some of their stupid tactics.
This is the most manipulated market I have ever seen in my 100 yr+ of lifetime. So traders if your conclusion from my above observation was that we should short Oil lemme tell you something in double quotes.
“Be afraid of Putin’s Winter Oil boogeyman”. "Contango is a dangerous thing that futures creates"
You don’t short Oil in winter. Period. Heck you shouldn’t even trade Oil. Only the expert can do this because it's called “Widow Maker” i.e. the losses in this commodity trading could be catastrophic planetary devastation like.
Tip : Btw currently oil is in downwards wedge and it could break to upside and we go up in winter but Oil too like gold doesn't love Dxy going up. So kinda mixed signals i guess. Let's see who shall prevail bulls or bears of oil.
Result : Dollar i.e. Dxy up = Oil down and vice versa but Winter is coming/ Contango = Maybe Oil up.
Step 10 : Powell curve i.e.10 yr - 3 month, 2 yr - 3 month ( Pvt(o) and Elliot wave doesn't work here )
Do you guys remember the talk we had with Powell earlier this year when he was trying to explain us that the inversion of the 10 yr - 2 yr curve doesn't mean anything and unless the near term curve inverts it's all okay. Well folks Powell near time curves are close to getting inverted. Therefore you’re seeing these Fed officials talk dovish recently. Coz if they invert Fed will lose their remaining 0.0000001% credibility. So let’s analyze them on a weekly time frame because on a monthly time frame they look super super bearish to me and there is no chance that the curve won’t invert at some point later on.
J Powell/ Fed Curves : Us10y-Us03m , Us02y-Us03m
Weekly time frame analysis :
Larry Summers former Fed chairman came recently to Bloomberg saying that the Fed has shown in latest minutes that they don’t even know what they are doing. Hence they Bs’ing us in their statement. I mean guys just read these hawkish and dovish points yourself. Also do check out the hidden statements in minutes which are pieces of advice for billionaires about liquidity and t-bills. Don’t forget my warning about bank runs. They are coming. My bet is Well’s Fargo Oct 2022/23 = Lehman brothers Oct 2008 or you could also go with lowest read by a bank in Fed stress test.
Hawkish vs Dovish vs Billionaire's ( Highlighted in blue ) Fed minutes.
As for individual bonds and overall yield curve :
Yield curve :
Credits : Eurodollar University. By Jeff Snyder
Note : Yield should be higher if the time horizon is higher. Meaning shorter end like 2 yr to 5 yr should yield less than 10 yr and 20 yr normally due to unknown risks associated in far future. But look here in these charts. A 52 w t-bill is yielding more than 20 yr and 10 yr bonds. That’s insane. It tells us there is a danger in next 1-2yrs as compared to far in future. The curve has gone banana's b/w 26 w t-bill to 10 yr bond. After 10 yr to 20 yr curve looks so good and why won't it. Because after the most horrible decade in entire history of Usa will come a little less horrible decade. Haha.
Result : I can confidently say yields are going up in respective bonds. But will basic yield curve i.e us10y-us02y will steepen or invert more is out of my pay grade.
Step 11 : VIX. It looks so ready to pop anytime.
I mean what do i even say here. This whole year traders are buying Vix calls in 20 and shorting equities and as the Vix goes 30 they sell their calls and buy puts. Meanwhile longing their equities position.
So smart Vix traders, it's time to integrate the mega crash in your calculations. Meaning do the first phase of second part but leave tf out of second phase of second part i.e. don't buy puts on Vix and don't try to long equity in 30 coz this time folks are going to promised Vix 40+.
Result : Vix is going up. Reason : It's mid terms + Putin x Jinpig x Biden at G8 = Volatility in Sept - Nov.
Financial derivation = Take those steps into consideration that you are confident in your analysis.
So I chose my Eur-usd pokemon.
Reason : I am quite confident in my analysis and Lagarde. Plus Fed minutes made a commentary about this that dollar is looking so strong as comparison to Euro. Maybe this too played a part in their recent dovish commentary.
Assuming : Eur usd is going down coz Europe is f’ed. ( We were most confident about this in all of our steps. Also my birdie told me 0.93 eur-usd traders have risen from their grave in options market )
Above assumption ( proving in step 1 t.a. ) will mean :
But what about bonds?
Final Result :
Every step we proved above using technical analysis on weekly and monthly time frame is being backed by my financial derivation except one thing. Will us10y-us02y curve invert more or steepen.? Coz steepening is bad for dollar strength whereas more inversion is good for dollar strength i.e. Dxy.
P.s. I think i'm so confused. Damn these bonds are tough to read.
Note : I forgot Dr copper. Lol. Why is it going up when Gold and other metals is going down?
*** Illuminati said : "Coz Dxy move up or bond yields move up is not because of rate hikes. They all are priced in. It's because of pseudo rate hikes on the Global market that is causing dollar to strengthen. This is due to QT + Eur-usd , Gbp-usd going down. Throw Japanese yen in there too but its chart is going up coz its Usd-jpy pair not Jpy-usd. Just like i said before too.
Thank you guys for your patience in reading an 8yr old post with naruto references w/o even mentioning Naruto anywhere coz Itachi stole the show. xD I am so tired guys coz i was busy writing stuff for you guys whatever was coming to my mind and leaving no mistake in my final calculations.
Take care guys. I hope one of you becomes a billionaire in this Wsb group and then pump meme stock for future generations. So suck the life out of me in the comments section. I will reply to every single one of your queries one last time.
( Now playing David Guetta : Just one last time )
Again like i always say. Don't forget your friends and family. Call them once every week. Be humble, stay safe and eat healthy.
With lots of love
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