Nonetheless, the markets resumed on Tuesday with USA Factory Orders up 1.6% versus expected (0.5%) in May.  The result, signifies a heated economy providing the Federal Reserve with more ammunition to raise interest rates aggressively. As a result, the USD Index catapulted above the 107.0 level translating into enormous USD strength. Consequently, the currencies plummeted as the Euro continues to be victimized by this phenomenon and the illusion of a booming economy.

On the other hand, the Canadian Dollar has also lost a significant amount of value as it dipped toward the 0.7650 cent level. With midterm elections in November and Covid seemingly forgotten, inflation remains prominent. The price of energy has been of major concern for those seeking re-election. Today market manipulators seem to have forced the price to drop significantly toward $93/B from the recent $110/B. Have the devils we know sold their souls for a chance to appease the victimized consumers? What will really change?

The increase in interest rates could be larger in scale but even if the value of assets decreases the cost to borrow will make the reality worse. For example, if a Homeowner buys a house and maintains a $1mio mortgage, paying $4k/month, even if the price fell to $800k,  the cost of borrowing could rise to $5000/m or significantly higher on a lesser amount. The homeowner might have saved on the purchase price but the carrying costs don’t make it any easier.  In reality, we are in a much different scenario with more devastating outcomes simply based on the volume of population and people’s personal economic plight. What is good for the gander might cook the goose?

The real question is, can the USD continue to rise unabated? Though the USD is considered the world benchmark currency, its prominence could simply be a mirage. People flock to the USD in times of panic because America is considered the land of the free with endless opportunities.  Yet with an additional $7 Trillion dollars having been pumped into the system during the last two years of the Biden Administration, the USD has been diluted. Seemingly, causing the hyper-inflation which may have been deliberately done. The same can be said of Canada as money printing is out of control.

Presently, the Chinese own Billions, if not Trillions USD, held in Treasury Bills that are used to finance Government expenditures. As Leadership seems void and the world is in chaos something profound has taken place. Reliance on the Petro Dollar is being abandoned in favour of settlement in Euro, Chinese Yuan or Russian Rubles. This shift in settlements will have major implications for funding government programs in what is considered the Free World.

In the recent past, this was considered an act of war. Our generation witnessed the Gulf War. The Iraqis accepted payment in another currency and all of a sudden they found weapons of mass destruction as justification to invade? If the truth needs to be told, our world is all based on money. The more one has, the more influential one becomes.  Yet if you don’t follow the game to maintain the house of cards, a severe price will be paid.