The Weak Dollar Policy

It should be obvious that Donald Trump has a weak dollar policy whether he wants to name it a weak dollar policy or not.

The Next Recession

It's not that the inversion of the yield curve causes the recession. It's that's that long rates start to fall as investors start to look beyond the expansion to the next recession and they start pricing in the next round of rate cuts.

So it's not that the inversion causes the recession it simply is a good indicator that a recession is coming so you don't need an inverted yield curve to get a recession and we're gonna have a recession this time without the yield curve inverting given how little headway the Federal Reserve was able to make in normalizing interest rates.

The Catalyst For The US Dollar Drop

The catalyst today for the US Dollar sharp reversal was more tweets from President Trump where he is expressing anger not only at the Federal Reserve right or not only at the ECB and at the Bank of China because he is accusing both Europe and China of being currency manipulators of taking advantage of us by weakening their currencies.

This was probably one of the biggest down days for the US Dollar this year - across the board weakness which is likely to continue. Believe me we're gonna have days that are gonna be much much weaker than this, I believe later in the year and of course next year and the year after that I think the dollar is gonna get particularly beaten up. 

U.S. Dollar: Forex Market Intervention Ahead?

Given Trump's accusations against Europe and China regarding currency manipulation I would not be surprised if the Treasury intervenes in forex markets to drive the dollar lower. The dollar's demise will happen on its own anyway, so intervention will only accelerate the process.

Gold, Gold Stocks and Inflation

The price of gold is falling, this is the new low for the price of gold this year. Gold stocks are continuing to hold up very well in the face of the decline in the price of gold. Gold stocks are not making a new low for the year at least not yet and though they are down today they are not down nearly as much as you would assume with a 10-12 dollar drop in the price of gold. 

I still think that traders have this wrong. They're still looking at the the trade war as somehow being dollar positive. It's dollar negative. That is impacting gold. 

They are dismissing the increasing inflation numbers that we're getting as transitory because they think the Fed is gonna hike rates more to fight the inflation which is going to be good for the US Dollar and bad for Gold. 

The reality is they're not gonna fight the inflation they're gonna surrender. Inflation is going to win because if they fight inflation they cause the worst financial crisis since 2008 and they don't want to do that.

The Economy Is Going To Fall Into a Severe Recession

Peter Schiff: "I think the economy is going to fall into a severe recession."