The Incredible Shrinking Dollar

In the forex market, most moves are measured in pips – a mere 1/100th of 1%.

So even a 1% move is big and notable. Currency traders on the right side of a 1% move can make their trading year.

That brings us to the return of the U.S. dollar – which still manages to pass itself off as the world’s reserve currency.

Year to date, the buck is down nearly 9%:

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That’s the kind of move that you might see out of an emerging market currency over six months. But not a developed nation. And certainly not one that dominates global trade.

The drop in the dollar reflects several factors. There’s rising uncertainty over trade and taxes. And there are concerns over the unsustainable path of the U.S. government’s budget.

With the dollar in a downtrend, if you’re an American just buying American goods, it’s no biggie. If you’re exporting internationally, a weaker dollar is great. But if you’re buying foreign imports, it means higher prices – with or without tariffs.

The speed of this dollar decline suggests that something is broken in financial markets. And we may know soon enough what that is.

~ Addison

“The Nvidia Killer”

Elon Musk is set to revolutionize the AI industry with his latest invention.

It could make a lot of people rich in the process…

All while triggering a crash of up to 50% in the next 12 months in Nvidia and other popular AI stocks.

Which is why this former hedge-fund manager is calling it “the Nvidia killer”.

Click here to see Elon Musk’s new invention now.

P.S. With the dollar heading down, other currencies should have a tailwind and can trend higher. That includes foreign currencies, as well as non-fiat alternatives such as gold and bitcoin. With the dollar weakening on top of everything else, we see the potential for gold prices to soar far higher over the next 18 months.

That’s part of the conversation we’ll have on Grey Swan Live! tomorrow with Frank Holmes, CEO of USGlobal Funds – whose background is extensive in the hard asset space, from gold to the digital realm with bitcoin mining. We’ll also be looking under the hood of two intriguing ETFs he launched – JETS and WAR. It’ll be worth your time to tune in and hear Frank’s perspective.

As always, your reader feedback is welcome: feedback@greyswanfraternity.com (We read all emails. Thanks in advance for your contribution.)

In the forex market, most moves are measured in pips – a mere 1/100th of 1%.

So even a 1% move is big and notable. Currency traders on the right side of a 1% move can make their trading year.

That brings us to the return of the U.S. dollar – which still manages to pass itself off as the world’s reserve currency.

Year to date, the buck is down nearly 9%:

Turn Your Images On

That’s the kind of move that you might see out of an emerging market currency over six months. But not a developed nation. And certainly not one that dominates global trade.

The drop in the dollar reflects several factors. There’s rising uncertainty over trade and taxes. And there are concerns over the unsustainable path of the U.S. government’s budget.

The speed of this dollar decline suggests that something is broken in financial markets. And we may know soon enough what that is.

~ Addison

“The Nvidia Killer”

Elon Musk is set to revolutionize the AI industry with his latest invention.

It could make a lot of people rich in the process…

All while triggering a crash of up to 50% in the next 12 months in Nvidia and other popular AI stocks.

Which is why this former hedge-fund manager is calling it “the Nvidia killer”.

Click here to see Elon Musk’s new invention now.

As always, your reader feedback is welcome: feedback@greyswanfraternity.com (We read all emails. Thanks in advance for your contribution.)

Regardless of anyone’s personal opinion on Trump, it’s clear that the international community is translating his “Putting America First” agenda as something more like “Every Man for Himself.” That could have a profound impact down the line, not just for our future trade prospects, but for the health of the economy and the U.S. dollar at large (which is still the world’s dominant reserve currency, for now).

At the same time, this is all very bullish for gold, as central banks are likely to continue buying for years to come. In this kind of situation, gold hitting $4,300 and continuing to rise higher was a foregone conclusion, and it’s clear that Trump’s agenda is locked in and unlikely to change.

Shares of regional banks and even investment bank Jefferies were hammered Thursday after fresh revelations from Zions Bancorporation and Western Alliance Bancorp.

Zions dropped more than 13%, Western Alliance fell 10%, and the SPDR S&P Regional Banking ETF (KRE) plunged over 6%, with all but one member ending the session in the red. It’s not the size of the losses — it’s the pattern that’s unsettling, in what are ongoing ripple effects from the banking crisis that rocked regional banks in early 2023.

Yesterday, Zions Bancorporation and Western Alliance Bank dropped 13% and 10% respectively, dragging the S&P 500 down with them.

In pre-market trade this morning, the broader banking sector also got whacked. JP Morgan was down 1.5%, while Citi fell 1.9% and Bank of America was down 2.9%. In Europe, meanwhile, the regional Stoxx Banking Index fell almost 3%.

The Federal Reserve stopped tracking “unrealized losses” at regional banks in 2022. But occasionally, a snippet of data will come to light, like this piece from the FDIC earlier this year.

History’s “golden” rule will soon apply again.

Shares of regional banks and even investment bank Jefferies were hammered Thursday after fresh revelations from Zions Bancorporation and Western Alliance Bancorp.

Yesterday, Zions Bancorporation and Western Alliance Bank dropped 13% and 10% respectively, dragging the S&P 500 down with them.

The Federal Reserve stopped tracking “unrealized losses” at regional banks in 2022. But occasionally, a snippet of data will come to light, like this piece from the FDIC earlier this year.

History’s “golden” rule will soon apply again.