Currency, a vote by the world on your country every day — an update — 4/01/2024
THE UPDATE—4/01/2024
I see there is talk again about the US dollar probably because of the recent surge in Bitcoin blah-blah-blah.
This talk comes and goes but is never around when Bitcoin is in the toilet.
In the meantime the US Dollar trudges on its inevitable path of gaining value when there are Democratic Administrations in office and losing value under Republican Administrations (see the chart above).
That swing in the dollar index is practically as sure as death and taxes because under Democrats the country always progresses while under the latter the country declines and the worldwide shift of money recognizes it every time even if the fools, pundits and reporters can’t see it.
THE CHART DOES NOT LIE
It’s been a while since I update the dollar story (see the date on the story below) but it is once again showing the…the what…ah, the GUTS of the goings on in the US.
After a three-year rise straight up as Biden repaired the disasters of the Trump Administration, so much so that coupled with Obama’s dollar rally, the two Democrats nearly eclipsed the Bush weakness, but it has faded somewhat as we have entered an election year.
And yet, remarkably, it is holding much of its gain despite the relentless lying bather from the accused criminal running the Republican Party.
THE WORLD WATCHES
In the end if Biden is reelected, I suspect the dollar may eclipse the high during the Bush era if not the disaster of the Reagan/Bush years. (see the chart below).
If Trump somehow becomes President again, well…the US currency, as sure as death taxes, will go down. How far? Can you spell Trump Casinos?
A declining dollar is a detriment to everything in America despite anything multi-national corporations claim. They say a cheaper dollar gives them an edge in competition in selling products around the world.
Yeah, sure, that’s also how Budweiser became a Belgian beer.
Remember the dollar lost 30% of its value under the Bush Administration. That is not just the dollar index going down. That is every thing in American losing 30% of its value in the eyes of the world.
P.S. As for Bitcoin and the crypto currencies, I have no idea what is going to happen with those vapors since they are running on fumes all the time anyway.
THE PREVIOUS POST—Nov 2, 2022
Can Obama/Biden repair 20 years of Republican decline?
The great thing about charting the markets is the charts do not lie.
After all, charting, also called technical analysis, got going in earnest after the crash of 1929 when traders and investors realized there had to be a way to counter the disinformation and dishonesty of the 1920s bull market.
And while “irrational exuberance” was coined by Alan Greenspan in the modern era, it was not born yesterday. It has been part of every financial market in history.
So technical analysis took over.
Charting records what is happening in all financial instruments — stock, bonds, currencies — in order to reveal what is happening in real time no matter what any insiders are doing, no matter what any pundits are saying, no matter what earnings matter or don’t matter.
The markets are always fluctuating between fear and greed and time.
Technical analysis measures the fear and the greed but most of all it keeps the time.
Whenever I’ve spoken to investment clubs, I ask the members first thing are they traders or are they long-term investors. Always they say in for the long term I assume because that has been drilled into their heads by every broker whose office they’ve visited or every investment advisor who’s bought them a martini.
It is said in America one does not lose money in the long term (every certified broker and investment advisor will say that) but you sure can lose time in the long term.
I give the investment club members a chart of a prominent stock with no dates on it to show the stock peaked at $65 and declined to $20 and rebounded back to $65. That entire swing from the peak back to breakeven took 30 years.
What history was recorded in that chart? It’s a chart of GM from 1965 to 1995. In 1965, there was no stock more blue than GM, an easy sell to any long-term investor, but the Japanese auto industry rose to compete and GM management and its board fought the competition by making mistake after mistake (persisting in making big cars, cheapening the products, failing to innovate).
Ross Perot, on the board of directors at the time, asked if the company would “at least make the best rear-view mirror in the world” and was thrown off the board for asking that sarcastic question. No, they could even do that.
The history of maybe the most important manufacturing sector in America changed and it was right there on the stock chart.
No money was lost, but anyone who had their savings tied up in that company in 1965 and planned to retire in 1970 was probably still working on some assembly line in 1995.
History is in every chart.
This brings us to the US Dollar.
And the question above: Can Obama/Biden repair the thirty years of Republican decline?
When President George W. Bush in 2002 declared that Iran, Iraq and North Korea were the “axis of evil” in order to justify in “war on terror,” who knew that was the exact top of the US dollar?
No commentator, no TV network, no newspaper, remarked how disastrous that comment in his State of the Union address was but the chart knew (see the notation below). Precisely to the day.
Who would know the dollar always goes up when a Democrat is President and down when the President is a Republican?
Does the world think Republicans are reckless and irresponsible, incapable of adequately governing, as comedian Bill Maher once said “Republicans think government sucks so they get themselves elected to prove it” or is it because the Republican Party wants a cheaper dollar to help American multi-national corporations compete in the world?
One can argue all day why this is but it is undeniable because the chart does not lie.
The Bush years were a disaster for the dollar, with a thirty percent decline which is to say the USA was that much cheaper as a country. The Obama years, despite the constant obstruction by Republican Congress, battled through in the eyes of the world to restore much of the currency’s value.
Given how the dollar acted under her husband, had Hilary Clinton been elected, there was a good chance the dollar, and with it, the country, would have been fully restored in the eyes of the world.
But that was not to be. Inevitably, under Trump, it was sideways to down again.
Now, under Biden, the chart is saying an attempt, as measured by the currency, is being made to restore American stature on the world stage. Hard to believe if one listens to the news but the world vote says so.
As investing goes, the dollar direction is practically a no-brainer.
But the dollar in Democratic administrations, short it under Republicans.
This is not opinion, it is the fact of the chart.
(Click on the chart for a larger view.)