To Kill the Dollar You First Have to Kill the Euro

I will start out saying that I am absolutely a long-term bear on the U.S. dollar. Do not mistake my analysis as anything other than trying to define the order of events in the coming crisis of currencies that will, without any doubt, occur.

Like it or not the dollar is the 800 pound gorilla in the currency, bond, commodity and equity markets. And, nothing in the short term is going to change that.

Yes, the banksters manipulate everything but they can't manipulate the big trends. If you believe that then you don't believe in free markets. Because markets are bigger than politicians and cartels. The banks are just another cartel. Just like the technocrats that run the EU are a cartel.

And the big trend is that the European Union is on life support, politically.
That mean the euro is on life support in the global capital markets. It is only a matter of time.

The recent elections in France and Germany only underscore this point. Because the behavior that brought the EU to its current state will not be changed. Angela Merkel and Jean-Claude Juncker think they've dodged a bullet by beating back populist movements in the Netherlands and France.

And so, they will double down on Austerity, raise capital controls on European assets, cram bail-ins down the throats of pensioners in Italy, policemen in Greece and misguided marxists in French cafes while they dodge knife-wielding peaceful migrants demonizing anyone who doesn't want this and censoring your speech through their corporate lackeys at Faceboobs and Twatter.

The political unrest in Europe will result in a massive sovereign debt crisis that will send U.S. assets soaring. We're already seeing it in the U.S. Treasury markets as well as the Dow Jones.

Right now the euro is rallying on the wrong-headed idea that Merkel's re-election will create long-term stability. Her odds shot up with this week's results in North Rhine-Westphalia. This rally will end once the tumult over the equally stupid idea that Trump will be impeached over anything having to do with RussiaGate.

Only when the euro is too strong for the EU economy to take will the situation there break. So, it is necessary for this to occur. Once that happens, the dollar will soar. Gold will tank along with the euro and U.S. treasury yields.

And that is what will set up the collapse of the dollar when we can't service the mountain of debt and sell our stuff overseas. But it won't happen for a while. Yes, cryptocurrencies like Bitcoin are acting like safe havens but it isn't from people fleeing the dollar. It's from people fleeing China, emerging markets, and Europe. I think Steem is brilliant and a way to claw back the value we create from those data mining like Twatter and FaceBoobs.

Bet on the dollar collapse in the long run, but events have to happen in a certain order for it to actually take place. Anyone selling you more than that is just selling you something.