The Chart at the Heart -- Dollar, Crude & Gold

Here's what I'm watching now ...

(Updated chart)

If you're interested in natural resources, keep watching this chart.

Also notice that while the falling dollar may be supporting crude, it is REALLY supporting gold.

Like a Thunderbolt, the U.S. Dollar Falls!

Today's U.S. dollar action reminds me of the words of Alfred, Lord Tennyson.

He clasps the crag with crooked hands;
Close to the sun in lonely lands,
Ring'd with the azure world, he stands.

The wrinkled sea beneath him crawls;
He watches from his mountain walls,
And like a thunderbolt he falls.

(Updated chart)
Is this a one-day correction, or a taste of what's to come? What were dollar bulls thinking, anyway? They got squee-ee-ee-eezed!

Gold held up nicely in the latest dollar rally and rebounded hard today. We'll see.

Director's Cut of "Lick the Competition"

I have a new column for Free Market Cafe/Non-Dollar Report. You can read that here: http://freemarketcafe.com/2015/03/an-alternative-investment-licks-competition-invest-rare-stamps/

It originally had a much different opening, one based on my visit to the Salvador Dali Museum here in St. Petersburg, Florida. Here is the original opening ...

In 1943, Reynolds and Eleanor Morse traveled from their home in Ohio to New York City, where they met the artist Salvador Dali. Dali had moved to New York in 1940 to escape the war in Europe. The Midwestern couple struck up a friendship with the artist. 

So, as an anniversary gift for themselves. The Morses bought Dali’s painting "Daddy Longlegs of the Evening... Hope!"

 

The painting is rather disturbing – it is an antiwar piece painted by Dali the refugee. It was also an expensive gift – the kind a couple has to think about before buying. It cost the Morses $1,250.

That’s pretty cheap for a Dali, eh?  But it was 1943. The average wage in that time was $2,000 a year.  A new car cost an average $900. Indeed, for a young couple, it was an exorbitant gift, even to themselves.

Fast-forward, and a lesser Dali painting from roughly the same period sold for more than $9 million a few years back.  Daddy Longlegs is a famous painting -- it would probably sell for much more.

Dali’s paintings often contained multiple images, those on the surface and those hidden. There is a hidden story to the purchase of that painting. The hidden story is the way the dollar has been flattened since 1943.

Let’s say the Reynolds hadn’t bought that painting.  Let’s say they wrapped up the money they would have used to buy it -- $1,250 – and unwrapped it in 2015.

Would that have been smart? Was holding the U.S. dollar a good investment over that time?

No. Make that, “Heck No!”

This is why we look for non-dollar investments. 

I’m not going to try to convince you to invest in Dali paintings.  Though the Morses did just that, adding more and more over the years. Now, you can see their collection at the Dali Museum in St. Petersburg, Florida.

No, rather than Dali paintings, I want you to think outside the box. There are many non-dollar investments.  Art, sure. But also, farmland, gold, and what are called “rare tangible investments.”

We’ll talk about one of those rare tangible investments today: Rare stamps.

And the story picks up here.

You can see my interview with Geoff Anandappa, who I mention in the article, here: https://www.youtube.com/watch?v=gb08DcJA-Dw

Chart of the Day -- Global Deflation

This is the change in proportion of countries with hyperinflation (blue line) vs. the change in proportion of countries with deflation (red line) over the past 40 years.

source: Callum Thomas

Fibonacci Sequence in Music - Bence Peter

Here's a nice little interlude for your busy Thursday

Chart of the Day -- US Dollar and Gold

The US Dollar Index hit a new 11-year high yesterday. This was mainly due to positioning ahead of today's European Central Bank announcement, so there may be a whiplash. But the bottom line is King Dollar continues to show strength.

With the dollar making an 11-year high, you might expect gold to be making new lows. After all, gold is priced in dollars. But, no, while gold is testing support around $1,200, it's actually holding above lows hit in the last quarter of 2014

(Updated chart)

So, what does this mean? I'll be sending a new report on gold to $10 Trigger Alert subscribers soon; I'll lay my cards on the table at that time.

Be careful, but also be ready to seize opportunities.

You Really Might Want to Be Short Bonds Here

It looks like US 20-year Treasuries are threatening to break down.

(Updated chart)

Why would they be doing that? Well, part of what was driving Treasury prices was that they traded in sympathy to "risk assets" in Europe. But now, for the first time in a long time, Europe seems to be getting its act in gear. Fears of a deflationary spiral in Europe are easing. Retail sales in Germany almost tripled in January. 

So, with Europe improving, less people are rushing into US Treasuries for safety. You can see how the iShares 20-year Treasury Bond Fund tried to rally off a trend line, and now seems to be falling again? 

So what's an investor to do? Well, the ProShares UltraShort 20-year Treasury Fund (TBT) goes in the opposite direction of Treasuries. In fact, it's a leveraged fund.

(Updated chart)

Just an idea for this Wednesday. Do your own due diligence, and don't buy something just because a guy on the Internet says it's a good idea.

Good luck and good trades.