About 12 years ago, in 2006, a new mania began where I was living. The Iraqi Dinar reached such a preposterously low conversion versus the USD that there were ads everywhere enticing people to convert their currency to IQD – there were actual lines full of people waiting to buy Dinars.
Volatility has been so low throughout 2017 that we became accustomed to waking up every morning and seeing our portfolios gaining in value on a daily basis. In fact, the American Association of Individual Investors surveyed the most bullish sentiment since the Dot.Com bubble.
There are various forms of debt in the global economy and all of them are rising right now, which means that any asset class that is priced using the power of leverage and margin is at risk of being severely cut.
Most of the world’s traders and fund managers are on vacation this week, but the ramifications of the tax cuts in the U.S. and the Chinese decision to keep the printing press running are changing the global outlook for 2018, and no one is waiting for January 2nd to make smart moves ahead of the pack.
Countries are watching their national currencies and foreign holdings be devalued while private, decentralized currencies are gaining value rapidly. They must stop the bleeding. The corporations they bailed out — JPMorgan, Wells Fargo, Bank of America, AIG, General Motors, and others — are not “too big to fail” anymore.