First, the U.S. Dollar. The U.S. Dollar index bottomed in March 2008 at 70.70, and, even with all the central bank inflation, has not even taken out that low. And, the Dollar index now has in place a massive divergence with equities since the Spring of 2011.
Next, Commodities topped in the Spring of 2011 commensurate with the
bottom in the U.S. Dollar, and have been diverging with equities ever
since.
All of these divergences are big warning signals, which, when combined with record bullish sentiment, a VIX that looks ready to explode to the upside (has already begun), and the longer-term phasing in equities with a cycle wave b wave labeling, portend a massive deflationary move in a cycle wave c down to complete supercycle wave (a) down of the Grand Supercycle Bear Market.
Further, I want to address one more thing. Many people say that there is a big decline coming, but it will be in real terms only,and won't be in terms of "worthless U.S. Dollars" becasuse "Helicopter Ben" will just keep printing money. It's not that simple. The FED is NOT "printing money". They are adding reserves to the banking system, and it takes a willing populace to borrow and spend those Dollars (velocity) and willing investors to take the money and speculate with it. With speculation at unheard of levels already, and with social mood about to reverse dramatically from a decade-plus long topping process, the outcome should be a stock market decline of greater than 90% in nominal terms. For more on this discussion, please listen to the interview I conducted with two other gentleman on Friday, February 15, 2013, which can be found in my post below.
