Jack Worthington's Social & Investment Commentaries

US$ Riding into the Sunset…Nero Fiddles

Posted in Uncategorized by Jack Worthington on November 6, 2013

US$ Riding into the Sunset…Nero Fiddles

 

We’re there folks.  As I’ve repeatedly warned since 2009, I believe we’re finally there…at the earliest twinkle of a new dawn, as I attempt to read the tea leaves of market psychology.  The move to supplant the US$ as the world’s reserve currency by the Chinese Yuan is accelerating…the strong growth of the global Yuan bond market, accelerating pace of direct Yuan-denominated cross-border transactions, Chinese gold bullion acquisitions, global growth of bitcoin usage, and growing anti-Americanism are key signposts.  It’s my gut sense that we’ve just passed into new territory.  Just a data point…Bitcoin/US$ chart: http://bitcoincharts.com/charts/mtgoxUSD#rg730ztgSzm1g10zm2g25zv .  These developments are moving at a surprisingly robust pace, and in my view, this confluence will hit a geometric progression at some psychological inflection point as the pigs scent the air and run to the trough (I don’t use the term pig disparagingly…just describing predictable market behaviour).  At that point, life will change profoundly for Americans.  When the psychological inflection point is hit, things will move with lightning speed.   I won’t go into the why’s or how’s in this post.  In my opinion, a large number of seemingly unrelated data points are interlinked and create something like an unseen underwater volcanic explosion that eventually creates a tsunami when it hits shore…barely detectable at the earliest stages.

 

A good summary article:  “Traders say the Yuan’s rise is the biggest move in global currency since the Euro’s introduction”:  http://www.vancouversun.com/Business/asia-pacific/China+yuan+makes+waves+international+currency/9123015/story.html

 

I say it is potentially far more destablising than that for Americans.  How can we blame the stereotype politicians we keep electing?  It’s not their fault, it’s ours.  The election process we the people developed and perpetuate encourages the wrong candidates to apply for the job, ensures their election, and erects barriers to their removal.  We get what we deserve.

 

JW

New York, NY

6 Nov 2013

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