The financial system is in trouble.

Indeed, by the look of things, we are about to experience a wave of deflation… in years.

Let’s first talk about the $USD.

The $USD has broken above initial resistance (bottom red line) and currently sits just below 95. This is a MAJOR problem for risk assets.

Now, some of you are no doubt asking “the $USD was at this exact same level in late 2017 and it wasn’t a problem… what’s changed?”

What’s changed is that at that time the Fed was only withdrawing $USD to the tune of $10 billion per month or $120 billion per year. Today it is withdrawing liquidity at a rate of $30 billion per month of $360 per month… and it intends to raise this to $50 billion per month or $600 billion per year within the coming months.

Put simply, the Fed is NOW pulling US dollars out of the financial system at a rapid clip. And it is doing this at a time when the ECB is PUMPING €30 billion into the system per month. Between this and the fact the Fed is on track to raise rates SEVEN times within 24 months (2016-2018)… while the ECB is STILL keeping rates in negative rate territory, the $USD being at 94 is a MAJOR problem for the financial system.

Remember, globally the financial system has over $9 TRILLION in $USD denominated debt. Some $6 trillion of this is in the Emerging Market space. So with each tick higher in the $USD… and with each liquidity drain by the Fed, the system is  “drying up” from a $USD perspective.

You can see this in the Emerging Market space where countries like Brazil, Turkey, and South Africa are in literal FREE FALL.

Brazil’s stock market is DOWN 20% YTD. South Africa is down 17% YTD. And Turkey is down 32% YTD. If we were in December (meaning a full 12 months had passed) and the year ended this month, it would be one of the WORST years for Emerging Markets on record. And we’re at those levels only SIX months in.

This issue is now spreading to Asia. China, Singapore, and South Korea’s stock markets have all recently rolled over and are now at their lows for the year.

Put simply, DEFLATION is now rising and it is rising fast. And the Fed is 100% to blame for this. And unless the $USD rolls over SOON, this mess is going to spread into the US markets.

The time to prepare for this is NOW before the carnage hits.

On that note, we are already preparing our clients with a 21-page investment report that shows them FOUR investment strategies that will protect their capital when and if a stock market crash hits.

It’s called The Stock Market Crash Survival Guide… and it is available exclusively to our clients.

To pick up one of the 100 copies…use the link below.

https://www.phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

The financial system is in trouble.

Indeed, by the look of things, we are about to experience a wave of deflation… in years.

Let’s first talk about the $USD.

The $USD has broken above initial resistance (bottom red line) and currently sits just below 95. This is a MAJOR problem for risk assets.

Now, some of you are no doubt asking “the $USD was at this exact same level in late 2017 and it wasn’t a problem… what’s changed?”

What’s changed is that at that time the Fed was only withdrawing $USD to the tune of $10 billion per month or $120 billion per year. Today it is withdrawing liquidity at a rate of $30 billion per month of $360 per month… and it intends to raise this to $50 billion per month or $600 billion per year within the coming months.

Put simply, the Fed is NOW pulling US dollars out of the financial system at a rapid clip. And it is doing this at a time when the ECB is PUMPING €30 billion into the system per month. Between this and the fact the Fed is on track to raise rates SEVEN times within 24 months (2016-2018)… while the ECB is STILL keeping rates in negative rate territory, the $USD being at 94 is a MAJOR problem for the financial system.

Remember, globally the financial system has over $9 TRILLION in $USD denominated debt. Some $6 trillion of this is in the Emerging Market space. So with each tick higher in the $USD… and with each liquidity drain by the Fed, the system is  “drying up” from a $USD perspective.

You can see this in the Emerging Market space where countries like Brazil, Turkey, and South Africa are in literal FREE FALL.

Brazil’s stock market is DOWN 20% YTD. South Africa is down 17% YTD. And Turkey is down 32% YTD. If we were in December (meaning a full 12 months had passed) and the year ended this month, it would be one of the WORST years for Emerging Markets on record. And we’re at those levels only SIX months in.

This issue is now spreading to Asia. China, Singapore, and South Korea’s stock markets have all recently rolled over and are now at their lows for the year.

Put simply, DEFLATION is now rising and it is rising fast. And the Fed is 100% to blame for this. And unless the $USD rolls over SOON, this mess is going to spread into the US markets.

The time to prepare for this is NOW before the carnage hits.

On that note, we are already preparing our clients with a 21-page investment report that shows them FOUR investment strategies that will protect their capital when and if a stock market crash hits.

It’s called The Stock Market Crash Survival Guide… and it is available exclusively to our clients.

To pick up one of the 100 copies…use the link below.

https://www.phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

As we noted earlier this week, China, tired of the “back and forth” with the Trump administration on trade negotiations, has resorted to devaluing the Yuan.

The goal here was to induce another sharp sell-off in stocks, similar to the ones induced by China’s August 2015 and January 2016 devaluations. By the way, those last two devaluations (red boxes) resulted in the S&P 500 dropping 11% and 12% in less than one week.

—————————————————————-

10 of Our Last 11 Trades Were Double Digit Winners

Our options trading system is on a HOT streak: 10 of our last 11 trades were double digit winners!

Don’t believe me?

You can see EVERY trade we’ve made this year HERE.

As a result we’re now up 35% this year alone… beating the S&P 500 by an astonishing 34%.

Best of all, this system couldn’t be easier: we only trade one trade, once per week… and we’re CRUSHING the market.

To join us today, take out a 60 day trial subscription.

If you’re not seeing SERIOUS returns within the first 60 days, we’ll issue a full refund, NO QUESTIONS ASKED.

To take out a trial subscription…

CLICK HERE NOW!!!

—————————————————————-

Fast forward to today and the $USD:Yuan pair is down SHARPLY. The $USD index is also sharply down. And the highly inflationary Australian Dollar is up sharply.

Of course, one day does not make a trend. But today is the best day for stocks, from a currency perspective, in several weeks.

However, underneath this good news is some VERY bad news… the Fed’s QT program is still ongoing… in fact it will increase from $30 billion to $50 billion per month starting in July.

So while President Trump may have solved things with China… the Fed is still presenting the markets with a major problem. Indeed, if with the good news in currency land, various risk proxies such as High Yield Credit are DOWN for the day.

With that in mind, we stand by our current thesis that unless the Fed “pumps the brakes” on its QT programs and rate hike schedule, stocks are on VERY thing ice.

How thin?

Most Emerging Markets are already down 20% this year. If US stocks were to play “catch up” it would mean the S&P 500 at 2,300-2,400.

The time to prepare for this is NOW before the carnage hits.

On that note, we are already preparing our clients with a 21-page investment report that shows them FOUR investment strategies that will protect their capital when and if a stock market crash hits.

It’s called The Stock Market Crash Survival Guide… and it is available exclusively to our clients.

To pick up one of the 100 copies…use the link below.

https://www.phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

China has gotten tired of playing “tariff tag” with the Trump administration. It’s now playing a new game called the “devalue stock dump.” It consists of China aggressively devaluing the Yuan in an effort to crash the US stock market.

If you think I’m being overly dramatic here, have a look at the below chart. This current devaluation is already on par if not worse than those of August 2015 and January 2016.

By the way, those last two devaluations (red boxes) resulted in the S&P 500 dropping 11% and 12% in less than one week.

—————————————————————-

10 of Our Last 11 Trades Were Double Digit Winners

Our options trading system is on a HOT streak: 10 of our last 11 trades were double digit winners!

Don’t believe me?

You can see EVERY trade we’ve made this year HERE.

As a result we’re now up 35% this year alone… beating the S&P 500 by an astonishing 34%.

Best of all, this system couldn’t be easier: we only trade one trade, once per week… and we’re CRUSHING the market.

To join us today, take out a 60 day trial subscription.

If you’re not seeing SERIOUS returns within the first 60 days, we’ll issue a full refund, NO QUESTIONS ASKED.

To take out a trial subscription…

CLICK HERE NOW!!!

—————————————————————-

Put simply, China is done messing around. It is actively trying to crash the US stock market to send a message to the Trump administration. China knows that President Trump views the stock market as a “report card” on his performance as Presidency.

Bear in mind, most Emerging Markets (including China) are already in bear markets, having dropped ~20%. If the US stock market follows suit, we’re talking about the S&P 500 down in the 2,3-00-2,400 range.

The time to prepare for this is NOW before the carnage hits.

On that note, we are already preparing our clients with a 21-page investment report that shows them FOUR investment strategies that will protect their capital when and if a stock market crash hits.

It’s called The Stock Market Crash Survival Guide… and it is available exclusively to our clients.

To pick up one of the 100 copies…use the link below.

https://www.phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

If you think what’s happening in the markets has ANYTHING to do with tariffs, you need to rethink some things. The single most important factor for the markets is…LIQUIDITY.

The Fed is pulling liquidity out of the market at its fastest pace in decades… possibly ever. What started as a $10B per month QT program has hit $30B per month and will soon be $50B per month

That comes to $600 billion per YEAR. Meaning the Fed is withdrawing Sweden’s GDP in liquidity every 12 month.

To make this worse, the Fed is ALSO hiking rates, which strengthens the $USD making debt more expensive. There is over $6T in $USD-denominated debt in the EM space. This is why this area started blowing up in March/ April when the Fed’s QT rose to $30B per month.

And, lest we not forget, the $USD is the reserve currency of the world, accounting for 86% of currency trading. So if the $USD is strengthening AND the Fed is pulling liquidity, you’re talking about 86% of ALL currency transactions becoming more expensive/ tighter.

Put simply, the Fed is going ALL OUT with is program to normalize. It’s almost as if Powell wants to undo the entire ’08-’16 period in 3-4 years. That’s insane especially when you consider that when you borrow in $USD, you are effectively SHORTING the $USD.

So that $20T in US debt.. that’s basically $20T in $USD shorts. Expand that thinking to the total amount of $USD-denominated debt in the global financial system and Powell is really playing with fire.

—————————————————————-

10 of Our Last 11 Trades Were Double Digit Winners

Our options trading system is on a HOT streak: 10 of our last 11 trades were double digit winners!

Don’t believe me?

You can see EVERY trade we’ve made this year HERE.

As a result we’re now up 35% this year alone… beating the S&P 500 by an astonishing 34%.

Best of all, this system couldn’t be easier: we only trade one trade, once per week… and we’re CRUSHING the market.

To join us today, take out a 60 day trial subscription.

If you’re not seeing SERIOUS returns within the first 60 days, we’ll issue a full refund, NO QUESTIONS ASKED.

To take out a trial subscription…

CLICK HERE NOW!!!

——————————————————————————————————-

How does this play out?

I believe Powell will back off once the carnage in the EM space spreads to the US. The last week has probably been a MAJOR wake up call for the new Fed Chair. He might very well choose to change course and walk back Fed Policy allowing the market to bottom soon.

That is “Powell Option #1” in the chart below.

However, there is another, far more concerning option, “Powell Option #2.” In this option, Powell decides to pull a Trump-like strategy with Fed policy.

President Trump is running his Presidency like a self-owned business. Business owners will often choose to take “the hit” in the short-term to address issues that will only get worse the longer they are left. President Trump has thus far done this with NK, trade, the US economy and is now shifting to Iran & immigration.

What remains to be seen is if Powell takes this as his template… meaning, he “takes the hit” by going all out on QT/ rate hikes now, rather than letting those issues continue onwards.

That is Powell Option #2. It is a much uglier outcome for the stock market.

In the simplest of terms, does Powell CHOOSE to crash the markets now (20% drop in stocks) in the pursuit of his goal or does he go have measure and take his time. We’ll know within the next 2-3 weeks.

On that note, we are already preparing our clients with a 21-page investment report that shows them FOUR investment strategies that will protect their capital from when and if a stock market crash hits.

It’s called The Stock Market Crash Survival Guide… and it is available exclusively to our clients.

To pick up one of the 100 copies…use the link below.

https://www.phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

Graham Summers

If you think what’s happening in the markets has ANYTHING to do with tariffs, you need to rethink some things. The single most important factor for the markets is…LIQUIDITY.

The Fed is pulling liquidity out of the market at its fastest pace in decades… possibly ever. What started as a $10B per month QT program has hit $30B per month and will soon be $50B per month

That comes to $600 billion per YEAR. Meaning the Fed is withdrawing Sweden’s GDP in liquidity every 12 month.

To make this worse, the Fed is ALSO hiking rates, which strengthens the $USD making debt more expensive. There is over $6T in $USD-denominated debt in the EM space. This is why this area started blowing up in March/ April when the Fed’s QT rose to $30B per month.

And, lest we not forget, the $USD is the reserve currency of the world, accounting for 86% of currency trading. So if the $USD is strengthening AND the Fed is pulling liquidity, you’re talking about 86% of ALL currency transactions becoming more expensive/ tighter.

Put simply, the Fed is going ALL OUT with is program to normalize. It’s almost as if Powell wants to undo the entire ’08-’16 period in 3-4 years. That’s insane especially when you consider that when you borrow in $USD, you are effectively SHORTING the $USD.

So that $20T in US debt.. that’s basically $20T in $USD shorts. Expand that thinking to the total amount of $USD-denominated debt in the global financial system and Powell is really playing with fire.

—————————————————————-

10 of Our Last 11 Trades Were Double Digit Winners

Our options trading system is on a HOT streak: 10 of our last 11 trades were double digit winners!

Don’t believe me?

You can see EVERY trade we’ve made this year HERE.

As a result we’re now up 35% this year alone… beating the S&P 500 by an astonishing 34%.

Best of all, this system couldn’t be easier: we only trade one trade, once per week… and we’re CRUSHING the market.

To join us today, take out a 60 day trial subscription.

If you’re not seeing SERIOUS returns within the first 60 days, we’ll issue a full refund, NO QUESTIONS ASKED.

To take out a trial subscription…

CLICK HERE NOW!!!

——————————————————————————————————-

How does this play out?

I believe Powell will back off once the carnage in the EM space spreads to the US. The last week has probably been a MAJOR wake up call for the new Fed Chair. He might very well choose to change course and walk back Fed Policy allowing the market to bottom soon.

That is “Powell Option #1” in the chart below.

However, there is another, far more concerning option, “Powell Option #2.” In this option, Powell decides to pull a Trump-like strategy with Fed policy.

President Trump is running his Presidency like a self-owned business. Business owners will often choose to take “the hit” in the short-term to address issues that will only get worse the longer they are left. President Trump has thus far done this with NK, trade, the US economy and is now shifting to Iran & immigration.

What remains to be seen is if Powell takes this as his template… meaning, he “takes the hit” by going all out on QT/ rate hikes now, rather than letting those issues continue onwards.

That is Powell Option #2. It is a much uglier outcome for the stock market.

In the simplest of terms, does Powell CHOOSE to crash the markets now (20% drop in stocks) in the pursuit of his goal or does he go have measure and take his time. We’ll know within the next 2-3 weeks.

On that note, we are already preparing our clients with a 21-page investment report that shows them FOUR investment strategies that will protect their capital from when and if a stock market crash hits.

It’s called The Stock Market Crash Survival Guide… and it is available exclusively to our clients.

To pick up one of the 100 copies…use the link below.

https://www.phoenixcapitalmarketing.com/stockmarketcrash.html

Best Regards

Graham Summers