The following is an excerpt from Richard Russell's Dow Theory Letters
Question -- Russell, What does the US dollar look like to you?
Answer-- It looks like TROUBLE. The chart below tells the story. The red dot identifies a death-cross by the moving averages. Below the dot we see a head-and-shoulders top. Yes, to me the dollar looks like it's in trouble.
As the dollar weakens, its European competition, the euro, rallies.
In the meantime, the Bank of Japan embarks on a furious effort to create trillions of yen, in an all-out effort to lift Japan out of a generation of deflation, recession, and falling exports.
It's a currency war, which sees the world's currencies going mad. The euro rockets up against the falling yen. So what, who knows what the euro is really worth -- unless you check it against gold -- real money.
So let's face it, we're seeing a currency war, better known as "beggar thy neighbor." And it's all courtesy of the various central banks' ability to create fiat currencies out of thin air. The winner will most likely be the Chinese yuan. The loser will probably be the world's current reserve currency -- the US dollar.
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