A prognostication of sorts:
Readers of the news stories I supply to this blog will know about the recent demonetization of India's largest currency notes by Prime Minister Modi and the effect it is having on the lowest caste of poor people, and now India's middle-class. India is a notoriously corrupt economy built on cash transactions and now with less than a week, and bank lines still circling entire blocks, tens of millions of India's poorest people will not be able to turn in older, higher denomination Rupees for the newer notes Modi has declared "legal". Meaning many a poor person with worthless Rupee denominations no longer legal will pick up the torches and weapons Come 2017. Hence, I expect the protests and riots already taking place in India to take on a new fever pitch.
Reader of this blog's news stories would also know the shaky pilings the Chinese Yuan stands on at this moment as the Red Chinese Government continues to devalue it's currency to keep export pricing competitive, while "dark channel" money is being dumped on a runaway housing bubble like we here in the West went through in 2004-2006. Chinese authorities are running out of plays now, having their Central bank buy billions of shares of stocks on their biggest exchange to support it, devaluing the Yuan, building infrastructure projects with no tenants or cars using them, importing pollution of "dirty" industries from the West, instituting "corruption" campaigns which chase their wealthiest kleptocrats and Oligarchs to flee the country, etc. At the moment, millions of Chinese are fleeing major cities as air pollution has turned day into dusk. Hence, I expect something bad to happen to the Chinese economy in 2017 too.
In the interim, the US Dollar is at a 14 year high against world currencies. The dollar is king and our US Federal Reserve has already begun to raise rates, meaning the dollar will become even stronger against weaker currencies around the planet. Imports to America are about to climb in price. People shopping at Walmart will see that smiley face icon on "sales" signs soon change to an upside down frown.
Toss in the election of Donald Trump, and now the whole world is watching America's next move.
Meanwhile, in a flight to safety, Chinese, Indian, and even Russian Oligarchs and Kleptocrats have been fleeing Canadian and European real estate as "safe havens" and they are now investing in expensive American real estate and stocks.
Many a pundit predicted gold and silver would explode, and stocks would tank, on election day if Trump was named winner.
That never happened. Cash is king, the US dollar is supreme, and ill-gotten wealth from around the globe is now investing in our stock markets along with what Wall Street watchers expect will be tens of billions of repatriated dollars held by US based multi-national corporations in overseas banks.
And then there is Donald Trump™, former Populist on the campaign trail, who has pulled the biggest bait and switch operation on America's working class voters in my life time.
Unlike Trump™'s low information voters, Wall Street is watching Trump™, not listening to him. The markets have kept on rising on what Wall Street perceives as a "Swamp Friendly" and "Business Friendly" administration where the banksters, oil men and the military industrial corporatists have met - and are hired - by the new boss who is more connected to Billionaires than any President in our history. If you don't believe me, just peruse the stocks for banks, defense contractors and oil/gas companies. All of them have been on a tear since Trump™ was elected.
That said, the three charts here, one for a Bitcoin Investment Trust, one for gold, one for silver, all drawn in weekly Japanese Candlestick charts, are telling me that bitcoin, gold and silver are "basing" and possibly getting ready to break upward. (Let me clarify, Bitcoin has been on a steady upward trek for all of 2016, and may soon hit its 2016 high again.)
A breakout on any of these would mean the confidence in this "Trump Rally" is done.
So I will update these three charts going forward for readers of the 360 Horizon blog because this will be a major "tell" on how the world's leaders and countries perceive Trump™, and these three charts, along with the Baltic Dry Charts, copper and few more indicators I watch might tip us off if a Global Recession is ready to bust a move.
One last thought: as soon as Donald Trump™ takes the keys to the White House and tweets the first dangerously ill-informed Tweet at 4:00 AM in his first three months of "slumming" at 1600 Pennsylvania Ave NW in Washington DC, I am willing to bet bitcoins, gold and silver will quickly become the "safe haven" of choice around the planet and the next global Recession will be ignited.
I will update the following three charts on Fridays going forward.
Good day, good evening, whatever it may be wherever you are,
- Rock
p.s. When I use a solid line for a trendline, that means the trendline has been set in place for a good while.
Dashed trendlines signal trendlines which are in the process of being "confirmed" and are not as "probable" to trade off.
For instance, if we end this week with a higher low and higher high for the gold weekly chart Japanese candlestick, that temporary trendline will now become "confirmed" and I will change it to a solid line end of business on Friday.
If this does not make sense to you, leave questions here on the blog so that I might elucidate further.
(Click Bitcoin Investment Trust (GBTC) Weekly Chart Above To Enlarge)
(Click Gold Weekly Chart Above To Enlarge)
(Click Silver Weekly Chart Above)
