“False breakouts are dangerous developments because they usually lead to violent drops…”
by Graham Summers via Gains, Pains & Capital
Love it, or hate it, the $USD is the reserve currency of the world. So what happens to it is of MASSIVE import to the rest of the financial system.
With that in mind, take a look at the below chart.
This is looking more and more like a “false breakout.” False breakouts are dangerous developments because they usually lead to violent drops.
In this case, the above chart suggests the $USD could collapse to the high ‘70s in the coming months.
This is a MAJOR warning. A $USD collapse like that would unleash a MAJOR inflationary shock on the system.
And that’s when we reach the End Game for Central Banks.
As I outline in my bestselling book, The Everything Bubble: The Endgame For Central Bank Policy, bonds trade based on inflation.
If inflation rises, so do bond yields.
When bond yields Rise, bond prices FALL.
And when bond prices FALL, the massive debt bubble begins to burst.
On that note, the yield on the most important bond in the world: the 10-Year Treasury, has already broken above its 20-year trendline.
The US is not alone… the yield on 10-Year German Bunds has also broken its downtrend.
Even Japan’s sovereign bonds are coming into the “inflationary” cross-hairs with yields on the 10-Year Japanese Government Bond just beginning to break about their long-term downtrend.
Globally the world has added over $60 trillion in debt since 2007… and all of this was based on interest rates that were close to or even below ZERO.
All of this is at risk of blowing up courtesy of this spike inflation.
Chief Market Strategist
Phoenix Capital Research