The currency crisis is now coming to fruition. The currency du jour, the U.S. dollar, which has held on to its title as the reserve currency of the world for decades, is losing its throne. Loss of trust and confidence is a psychological event, not a monetary event, yet it is now affecting one of the most established representations of the contemporary financial system.
What the U.S. treasury market is signaling
The U.S. Treasury market was once considered the most sacrosanct sector of economic markets globally, capable of hedging against both inflation and deflation and protecting against any disaster, whether financial or otherwise. Today, nation-states do not trust the treasury market like they once did and have lowered their exposure consequently.
The recent news that 10-year treasury yields rose to 1.6%, and since bond prices move inversely, which means- downwards, represents the financial mechanics to maintain confidence in the credit systems. However, when trust is lost, it is hard to regain. In the bigger picture, treasury bonds reflect the dollar, and if trust in the dollar is low today, how can people be expected to trust the dollar 10 years into the future?
This loss of trust is playing out in the stock market. People are seeking alternative avenues of investment, putting their money in investment vehicles that they can trust more than chasing the yield curve. This is the basis that the Bitcoin phenomenon is grounded in. With institutional investors recently embracing the world of cryptocurrencies, we are at a turning point: an indicator that money – big money – is letting uncertainty dictate where to park it. Investing money outside of the financial system at large appears to be the favorable choice.
The Great Silver Crisis & the Everything Bubble
I have spoken at lengths about the incoming Great Silver Crisis. The price of silver may have backed off recently, but its growth from last year tells a story of its own. As the most undervalued asset in the modern market, more frenzied buying is to be expected as fiat currencies continue to be printed to worthlessness. After years of manipulation, and renewed interest from the WallStreetSilver subreddit group, silver’s upward moves are long overdue. The Great Silver Crisis is starting now, and there’s no slowing it down in the longer term.
These days, it appears, almost everything across the board is in a bubble – the “Everything Bubble,” overvaluing assets from a variety of sectors. The only sector that isn’t experiencing this bubble is commodities. The commodity sector represents what people need – corn, wheat, rice, soybeans, and more – and these investments are now going up.
To use a metaphor, we can hobble along with an injured leg for a while, but we will one day reach a point where we cannot go any further, and it appears we are now nearing that point. Every aspect of financial markets is signaling something, and the world needs to collectively stop and pay attention to the clues in front of us; that the Great Currency Debacle will soon be underway.
About the Author:
A widely recognized expert on silver, David Morgan began investing in stocks and precious metals as a teenager. He obtained degrees in finance and economics as well as engineering. Author of the book The Silver Manifesto, he has devoted more than 30 years to educating investors on opportunities to protect and grow their wealth. In addition to advising private clients and fund managers, he writes at The Morgan Report, covering economic news, the global economy, currency debasement, and stellar opportunities in precious metals and mining stocks.