Friday, December 25, 2020

The US Dollar is Being Devalued--Probably By A Lot. Buy Commodities.

The US dollar is being intentionally devalued, in part, due to vast and increasing fiscal and trade deficits due to massive government spending that is being substantially funded by "reserve money creation" by the Federal Reserve. Our currency is being radically devalued. Inflation is starting to show up EVEN in the government's lying statistics.

Jesse Felder at The Felder Report says:

in the Repo Crisis of last year, the central bank [was] acting as lender of last resort to the Federal Government. its purest form, [with] a commitment to monetize that amount of debt that could not be absorbed by the market. appears that this commitment has only grown stronger. What it really amounts to is a scenario in which our country’s debt grows so large that the central bank is forced to abandon whatever ostensible [legal] mandate it has been given for a new, unspoken one: print as much money as is required to fund the government and prevent a debt spiral.

As former chief economist for the BIS William White put it, “At some point, people realize that the government can’t support the debt burden without going back to the central bank to print more money. This is a "tipping point.” We have now reached that tipping point.


If you look at the chart below from Jesse Felder's post "A Generational Opportunity in Commodities." He says that the dollar could decline another 30 to 40% in the months and years ahead.  

If you buy commodity producing stocks, commodity and foreign currency etfs you will stand to benefit handsomely to protect yourself from dollar devaluationI am not an investment advisor. In fact, I'm frequently very wrong with regard to market commentary (usually too bearish). So please do your own research

The US Dollar Could Sink 30 to 40% in the Coming Months/Years

Internationally traded commodities priced in US dollars will soar. So buy oil producers like XOM, CVX, XLE, COP, OXY, VLO and major foreign oil companies like TOT, BP, PBR, RDS.A. All of these companies pay very high dividends as their stock prices are very low.  Also buy commodity producers like VALE, BHP, FCX, CLF, WPM, WY.  

Also commodity US etfs that track precious metal commodity prices in US dollars should do well like PALL (paladium), SLV (silver), GLD (gold), PLTM (platinum). 

Stocks, especially those with international sales, will soar -- for awhile. Maybe just buy DIA and/or SPY and make things easy for yourself.  Shorting long-dated treasuries makes sense as well since interest rates on the long end will want to rise.  Buy TBT, the double inverse of the 20+ Year Treasury ETF.

Commodity Stocks Relative to the DJIA. Commodity Stocks Could Soar
You can also hold foreign currency in your investment accounts: FXE (Euro), FXF (Swiss Franc), FXA (Australian dollar) instead of USD government money funds.  The dollar will bounce up from time to time, so buy these foreign currency ETFs when the dollar is temporarily strong.

Good luck out there. 

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