Also, watch oil and the $US. Oil topped out at $145 back in July 2008, has been up and down, but plummeted twice since then – once right after that 2008 top, and again in mid-2014 from a high of about $107 to a current price under $30. We haven’t been under $30 since the beginning of 2004, and we’ve never looked back since it had its first huge spike above $10 in 1974. Considering inflated dollars, this is a VERY interesting time, with no bottom in sight near term.
As for the $US, while the current index figure of almost 100 seems high right now, that’s only relative. The all time high was 164 back in 1985, and the all time low was only 8 years ago at 71. What IS particularly noteworthy though, is how we’re doing in relation to other currencies – we’re extremely strong! It’s only been about two years ago that the $Canadian was running stronger than the $US, and only three years ago for the $Australian. Yes, they’ve had their own issues that have severely weakened their currencies against the $US, but except for the few that have been largely pegged to the $US, most all other intermediate to major currencies are in the same boat against the $US today. We are the strongest currency. That’s scary! The Ruble has done nothing but generally decline since 2006, and has absolutely tanked against the $US in the past two years. The Yuan was in a steep gain, generally, against the $US since 2006, unlike the Ruble, but has suddenly started a very sharp decline against the dollar in the past two years.
Another interesting figure to watch is the Prime Rate. It’s currently at 3.5%, just up from 3.25% starting 16 Dec 2015. It hasn’t been at 3.25% before that since 1955, and hasn’t been at 3.5% since the later 1950s. Going back to 1966 (the earliest I could find), the Fed funds target rate has never been below the mid- to upper-1% range (we’re currently at 0.25%).
Some things seem to make sense, but the ones that would most seem to indicate that the US is in strong shape, simply don’t hold up under scrutiny – yet the media only reports a “strong dollar,” a temporary correction in the stock market after an historic run-up, yada, yada. And gold says everything is just fine all over the world. I’m actually surprised gold hasn’t been pushed below $1000 just to shake out all but the most hard core skeptics – just to “prove” that we’re in good shape. Count me in with the most hard core skeptics, as I adjust my tin foil hat to better receive signals.