The Dollar Index has been in a bullish holding pattern for two months. As tedious as this has seemed, it has not diminished the likelihood that the next big move will be up. My immediate target would be 98.20, and we could infer the rally had begun in earnest once DXY has closed for two consecutive days above the 97.10 midpoint resistance shown here.  Alternatively, the first hint of trouble — unlikely in my estimation — would come on a print beneath the 95.68 ‘external’ low shown in the inset.

A further, significant strengthening in the dollar will tell us when the deflationary endgame for the global economy is gathering force. It will crush debtors, bankrupt creditors and lop at least four or five zeroes worth of funny money from the banking system’s quadrillion-dollar shell-game. I have written extensively on why hyperinflation is extremely unlikely to settle debts that have become vastly too large to repay. If you cannot understand why, let me pose this question: Do you actually believe the banksters will let you pay off your mortgage with a few hundred-thousand-dollar bills that you’ve peeled from your wallet? If you answered in the negative, you are implicitly a deflationist. Regarding hyperinflation, if you think the ruinous Weimar episode of 1921-23 shows that it could happen in the U.S., the opposite is true.  Read Adam Fergusson’s When Money Dies for pellucid insights as to why. It is $8 on Amazon.