DXY to the Moon!
And ETH Breaking out against BTC
Wait, what’s DXY?!
Is that some hot new altcoin I should ape into?!
TELL ME WHERE TO BUY IT, FRANK!!
I WANNA BE A QUADRILLIONAIRE, TOO!!!
Guess what??? You already own it! Well, kinda.
The DXY is the US Dollar Index. It tracks the US Dollar against a basket of major foreign currencies, and it’s on a tear right now.
The Dollar is stronger than it’s been in about 20 years, and it doesn’t look like it’s slowing down just yet.
So, what does that mean?
Well, basically it means violence for most assets - especially risk-on assets (e.g., tech stocks, crypto).
And it means that emerging markets are getting crushed, because their debt is denominated in dollars and their local currencies are growing weaker against the Dollar by the day. When this happens, governments in the developing world having to impose austerity measures on their people, which means poor and middle class people in these countries get fewer and lesser-quality public services.
Basically, everything loses against the Dollar in financial and emerging markets. But what’s really awesome here is that the Dollar is still weak for consumers in the US. Really, really great. We’re all have a really, really great time, right?
What a tremendous job Jay Powell has done. What a brilliant leader we have in him.
HOLY JESUS CHRIST OF LATTER-DAY SAINTS DO I LOVE BUREAUCRATS. (More on that in the next edition of the newsletter, though.)
ETH Breakout
In other news, ETH is breaking out against BTC after being in a five-year downtrend.
To translate that for you, ETH is falling less fast than BTC today.
“Falling less fast” is basically good news at this point in the cycle.
Happy times. Good times. GREAT times.
Best,
Frank
Twitter: @frankcorva