“Panic about U.S. Dollar”: Echoes of 2008
Here in 2020, financial advisors are extremely negative on the greenback… again
by Bob Stokes
Updated: August 20, 2020
From July 2001 to March 2008, the U.S. Dollar Index lost 42% of its value. It was a bad time for the buck.
Sentiment toward the greenback grew so negative that in December 2007, a famous fashion model demanded to be paid in any other currency except the U.S. dollar.
That same month, The Economist featured this cover:
Around that time the German magazine Der Spiegel ran a similar cover.
Our March 2008 Elliott Wave Financial Forecast provided subscribers with this update on the extremely negative sentiment toward the greenback -- and what it likely signified:
The dollar broke through the November 23 low at 74.48 on Wednesday... A sentiment extreme suggests that a more permanent low is fast approaching... In recent weeks, New York City shops started to accept euros and other foreign currency as payment for their wares. While shops in U.S. border towns have long accepted Canadian dollars and pesos, Reuters says, "The acceptance of foreign money in Manhattan was unheard of until recently.
Well, that low in the U.S. dollar indeed arrived just two weeks later. The greenback went on to rally about 24% into November 2008.
What does all this have to do with the dollar in the summer of 2020?
Take a look at this chart and brief commentary from our August 2020 Elliott Wave Theorist:
[The figure] shows that advisors are approaching previous extremes of dollar pessimism.
The only market on which investors are bearish is the U.S. dollar. When people start throwing their "investments" overboard, they will start grabbing dollars as if their lives depended on it.
If you remember the 2007-2009 financial collapse, you remember the one thing almost no one had: cash. The term "liquidity crunch must ring a bell.
That's because in a deflationary economic contraction, credit is hard to get -- and "cash is king.
Learn what our flagship investor package has to say about any such prospects and the U.S. dollar's next move. Your portfolio may thank you later.
Follow the link below to get started with a 30-day, risk-free trial and instant access to our latest insights.
"Approaching A Paradigm Shift”
The quote above is in the August Elliott Wave Theorist -- and when you read it, you'll know exactly why Robert Prechter chose those words.
His discussion of this "shift" includes key points about key financial markets.
Indeed, following commentary on gold, stocks and rates, Prechter writes:
There is one key impetus behind all these markets.
Learn about that "impetus" and get all the valuable insights that the latest Theorist offers so you'll be in a position to prepare for what's next.
Follow the link below to get started with our 30-day, risk-free trial.
What can you learn when you look at the stock market -- the Dow Jones Industrial Average, specifically -- going all the way back to 1788? A lot! For one, clear Fibonacci proportions begin to emerge between multi-decade historical periods. What's more, the same Fibonacci proportions also begin to point to the year 2021 as a very important moment in financial history.
In June 2020, it seemed the natural gas bear would stay for a while. Yet early July saw a turn from its long-term low. A four-month rally followed and prices more than doubled: See the forecast that got it right.
"When empires fall, it is usually accompanied with a debauched currency," says our Head of Global Research Murray Gunn in this sobering overview as to why 2021 may usher in "a changing world order."