Secular Bear Market for the Dollar? A Blast Higher for Commodities?

You are not hearing much, yet, about a weak dollar. But based on Michael Oliver’s work and my confidence in it, I think that will happen soon. Remember Michael had been saying that if the dollar index closed the month of May below 99 it would confirm a new bear market in the dollar. He also said that if it closed any day this week below 97.5 that would also suffice to provide a short dollar signal. Well, even after rallying from below 97 this week, it closed Friday at 97.364. And in fact Michael gave the green light on my radio show last week to go short the dollar when the dollar index was trading at below 97. 

That brings me to the only reason I can buy in to concerns of a hyperinflation in a global economy that has more debt and mal investment than ever before in human history. The global economy remains to a great extent on a dollar-based monetary system. However, for reasons I have recently been talking more about, I believe the days of King Dollar may be nearing an end. And if that is true, John Williams may indeed be right in predicting hyperinflation. Now that the dollar has turned down, three of the four major market “plate tectonics” have turned, as Michael has been predicting. The dollar and Treasuries have entered significant bear markets and commodities have entered a significant bull market. With the dollar now a confirmed bear, wind should be at the backs of commodities, at least as priced in the dollar.

About Jay Taylor

Jay Taylor is editor of J Taylor's Gold, Energy & Tech Stocks newsletter. His interest in the role gold has played in U.S. monetary history led him to research gold and into analyzing and investing in junior gold shares. Currently he also hosts his own one-hour weekly radio show Turning Hard Times Into Good Times,” which features high profile guests who discuss leading economic issues of our day. The show also discusses investment opportunities primarily in the precious metals mining sector. He has been a guest on CNBC, Fox, Bloomberg and BNN and many mining conferences.