The markets will likely go down. The economic impact of Coronavirus is spreading. As well as economic activity in China going down dramatically. So with markets going down, people tend to flee, foolish, into the US Dollar.
With this happening, we see something interesting happening. People consider US treasuries as a haven investment. But are they? What is there safe on borrowing money to junk? So we are one step closer to a massive collapse in the US Dollar and financial markets.
We see quite some things happening in the years before the Corona outbreak. first of all, we need to address the money printing and stimulus. Allowing cheap financing for those who should not get any financing at all. Keeping the bubble going.
Until now are central banks capable of managing all. They are capable to stimulate the economy, they are capable to keep the bubble going.
So now we see that they are slowly losing control. What is interesting to see is the managed and automated accounts. When the USA exchanges are down bu 3% an additional 16 billion US in sales is needed. So the bubble could be popped. After all, could there be no buyer for it?
So how could collapse in the financial markets blow up the Dollar? Well, that is pretty easy. For this, you need to understand a few things. First of all, confidence can be completely gone. Then we come to the USA funding. The USA is mainly financed by treasury bills. Who will buy them?
Treasury bills are short term papers. So the demands should remain there. but when all confidence is gone, who will buy them? Who will buy it? What happens when no one will buy it? Then the USA government will default on its debt. As well also imploding the Dollar.