Exactly. But one could argue you still have the problem of all that USD denominated debt out there ...
That debt is crashing in value. The TLT ETF (Treasuries Long Term) was down 1.91% just today. Bonds paying 3.5% per year and losing 1.91% per day become less of a problem really fast.
So 3 big currencies are printing money and buying bonds in the face of inflation:
1) Japan - to hold 10 year bond yields at 0.25%
2) Europe - to keep a lid on Italian and Spanish bond rates
3) UK - to keep bond prices up
The UK it is already in high inflation. In all cases I expect inflation will keep going up.
So 3 big currencies are printing money and buying bonds in the face of inflation:
1) Japan - to hold 10 year bond yields at 0.25%
2) Europe - to keep a lid on Italian and Spanish bond rates
3) UK - to keep bond prices up
The UK it is already in high inflation. In all cases I expect inflation will keep going up.
The world currencies are headed for trouble.
-- Vince
It's quite satisfying that we were proven correct, and it will continue. Sad that we never get credit.
(3) could be over in a truncated 5th wave capitulation or this down move could be sub-minute wave (i) of minute wave ((v)) and we see sub 3600. I'm leaning towards end of (3). What do you guys think?
Account value often follows Elliott Wave. Below is my account value for the past 6 months. The big spikes down near the beginning and end are where I drew money out. Between the days where I drew money out 5 waves up are marked in red, with wave 3 being the longest in time and greatest in increase. The wave 4 drawdown is where I started going short at 4100 too early as discussed here at that time.
After making 5 waves up, it's time to be cautious because a big correction can come. Right now I think about what would be a conservative amount to trade, then I cut that in half. This is can be seen at the beginning of April and this month, where equity grew very slowly as I got more conservative trying to avoid a big correction.
While the periphery breaks down rather slowly at first, the capital cities of the hegemon should collapse suddenly and violently.
Looks like we're going sub 3600. Ya, I'm out of the market at the moment. I'd rather wait until a more definite trend than try to get another 3-4% trying to time the bottom of a wave count. It's harder as well that I'm trying to trade the Canadian TSX Composite, it just doesn't follow the US Markets and has it's own wave count as it's more commodities based and currency fluctuations cause the waves to be less clearly visible.
It's still fun charting the SPX, I thought the DXY weakness would have buoyed the stocks more which is why I thought the SPX could have bottomed already.