An Update on a Warning Dream about the US Dollar

 

On August 28, I published a warning dream about the US dollar. In my interpretation, I indicated that I saw a big move, but I was not sure about the direction. It was either not indicated in the dream, or I missed it. Investors and speculators can make or lose money regardless of the direction of a move depending on whether they are on the right side of a trade. 

I believe most people who trade in the dollar were expecting interest rates to move lower, which would result in a weaker dollar. This could still suddenly happen because of some unforeseen event, but rates have moved up since my dream leading to a stronger dollar. The dollar made a six-month high last week. This has undoubtedly caused some traders who bet on a weaker dollar to suffer losses. I cannot say if the current direction of interest rates and the dollar will continue, but I am increasingly concerned about the health of the financial markets. As I advised in an earlier post, I believe this is a time for caution.

 

The situation in China is critical with enormous loans for housing development coming due and a large company unable to pay back loans. In this country we are facing a government shutdown, and interest rates continue to rise with mortgage rates hitting 7.5 percent on the thirty-year fixed. Houses are unaffordable for many people. The war in Ukraine rages on with no end in sight. Credit card debt is at a record level and inflation is still elevated although lower than a year ago.

 

The Federal Reserve has said it will continue to raise interest rates until it gets inflation closer to its 2 percent goal. This is going to cause pain for some, and that pain could rapidly expand from some to many. When a significant slowdown in the economy begins, economic conditions could rapidly deteriorate, and a soft landing becomes a recession. There is a variation of a quote from Louis Pasteur that says, “Chance favors the prepared.” Be prepared because markets do not always go up and unemployment does not always stay at record low levels.