US Dollar and Treasuries as safe havens
The guest argued that the US Dollar and short-term US Treasuries will serve as the ultimate safe havens during the impending liquidity crunch.
The argument
As the credit crunch intensifies, a global shortage of dollars to cover loans will drive the US Dollar Index (DXY) north of 120. While gold and silver may bounce due to a short-term dollar dip to 94, they will ultimately decline alongside other assets during the liquidity squeeze as investors rush to cash.
The thesis, stress-tested
✓ What validates it
- ✓DXY falling to 94 in the short term before surging
- ✓US Dollar Index (DXY) rising toward 120 during equity market declines
- ✓Increased accumulation of short-term Treasuries by institutional investors
▸ Risks discussed
- ▸Long-term inflation risks once the Fed aggressively restarts money printing
- ▸A temporary bounce in gold and silver that fails to reach new all-time highs
AFFILIATE LINK · ZORTIX MAY EARN A COMMISSION · NEVER A RECOMMENDATION TO TRADE