That special moment when you just know.

Have you ever experienced that moment when you realize something just broke? Like for example when you set that bag that has the eggs in it down on the counter just a little too hard or when you hear the high pitched "crack" when you drop your shopping bag. You hope against hope it's not what you think but you KNOW it is and how much fun you're about to have cleaning it up!

I had a moment like that this week when I read about the British Pound collapsing to a record low against the dollar:

"The Bank of England, which is in charge of maintaining financial stability, now has a slew of problems to deal with: inflation spiraling out of control, currency plunging, bond market in chaos, financial stability at risk, and spreading contagion. And some of them require the response that the others require. So this is a mess, and there are no good solutions."

The sounds of high pitched "cracks" can now be heard all around the financial markets which might not seem noticeable until the ATM's and EBT cards stop working that is...

For now, the dollar is the beneficiary of the chaos in the credit markets simply because there's really nowhere else to park money in the kind of amounts needed by the massive fund liquidations. Also the dollar is the least dirty shirt in the currency laundry basket. That fact is putting pressure on everything else connected to the dollar which is just about everything.

Business owners have a window to exploit the current situation since having dollars is an advantage in international trade (for now). Any businesses operating in the UK have seen their purchasing power decrease by 21% year to date - Ouch!! Good for operators here though, might be a good time to stock up on some Marmite lol!

Joking aside, the reason this could be a watershed moment is because the Bank of England has just done a 180 degree turn and stated bluntly their intention to return to stimulus:

"The Bank of England just announced it would start a NEW Quantitative Easing (QE) program, to try and “put a floor” under its bond market.

The Pound responded by dropping to new lows."

Many have predicted that the Federal Reserve will also find religion and return to stimulus which we already know will ensure raging hyper-inflation like the country has never - ever seen before. Up until now the Fed has resisted (I believe) because it wants to tank the economy. I've shared my analysis about that in the past so I won't repeat it now but here is a moment where, which ever move the Federal Reserve makes will have a viciously negative effect on the economy yet they will remain in charge of monetary policy moving forward.

It's sort of like having a military commander who managed to get his troops surrounded and massacred and then promoting him to General.

So, having extra dollars now helps.

Call me and we'll talk.