Transcripts. Bannon’s War Room. Edward Dowd The US Dollar is Only Failing Up Due to the Weakness of Foreign Currencies Globally. September 6, 2022.
Topic: US Dollar, foreign currency. Guest, Edward Dowd. September 6, 2022.
Transcripts from Bannon’s War Room on Rumble: Edward Dowd: The US Dollar is Only Failing Up Due to the Weakness of Foreign Currencies Globally
Published September 6, 2022.
Steven Bannon:
OK we want to bring in Ed Dowd from Hawaii. Ed, a former portfolio manager over at Black Rock, one of the smartest guys I know. Ed I've seen some of your interviews over the last week. You've got a pretty dire forecast where you think the global economy is going. I want to turn it over to you and walk us through. Ed Dowd’s predicting a collapse in the next I don't know 6 to 18 months I think the range is. Walk us through your theory of the case Sir.
Edward Dowd:
Bottom line the global debt price unfolding before our eyes. We saw Sri Lanka go belly up. It's spreading. We see what's going on in Europe with the energy crisis. The tell, for me is the dollar, the DXY, the basket against all other currencies. If you want to put up that chart. The chart goes back to 68 and you can see the dollar has been going straight up since January of 2021 and we are seeing levels on the dollar, we're hitting a new high today. We're seeing levels on the dollar…
Steven Bannon:
Describe what this because we got a podcast on. What does this chart show? You say it's going up. What is the chart itself?
Edward Dowd:
The chart is the dollar index versus all other currencies, the basket. So, this is the dollar. It’s what a lot of Wall Street focuses on when we are looking at different asset classes. And the dollar started its monumental rate change rise in January 2021. And what's interesting about this dollar cycle and this rate hike cycle are a couple of things, first, this is the first dollar event that's concurrently happen with commodities. That's never happened before ever since we went on the petrodollar. Typically speaking commodity cycle and inflation go up when the dollar goes down because that's credits being created.
This is the first cycle where that's occurred and what that says to me is that even though there's a monetary phenomenon inflation always, the policies of the Biden administration and the European Central Union are so disastrous that we were seeing this at the same time. So, it's a disaster #1. #2 in this fed rate hike cycle we're seeing something that typically augurs at the end of the rate hike cycle, it’s a three-month T- bill going above the discount rate of the fed window. And that happened in February of this year before the first-rate hike cycle, and it continues to happen. We've never seen this before usually augurs the end.
The Fed continues to ignore this signal which typically they respond to the market and go the other way. So, they're raising into the face of what we know is a real economic decline. I'll get to that in a second. And third, this is technical mumbo jumbo but it's important, nonetheless. This is the longest seasonal cycle advance in the history of the dollar without any kind of pullback. So, the dollar is uncharacteristically strong, hitting new highs today. And the dollar for me has become an indicator of global credit.
When the dollar goes up a lot and fast it's an indicator that global credit is tightening and that's because ever since the.com bubble and you've referenced this too Steve. Our biggest export has been U.S. dollars and the global economies decided to issue debt and dollar dominated debt. There's about 15 trillion of this stuff floating around out there. And the dollar rising is crushing them and indicative of default and a scramble for dollars to meet margin calls. So, this is a disaster.
Steve Bannon:
We have a huge story from Bloomberg up on my GETTR account about these huge margin calls now in the energy sector in the derivatives of the futures market and they're calling for, Norwegian companies are calling for a $1.5 trillion emergency bail out. They said these margin calls are going to put these companies out of business. You're going to see a wave of bankruptcies. You're seeing it in other sectors too, Ed?
Ed Dowd:
Absolutely, it's all over the place. I mean hedge funds have been decimated this year. Their performances is miserable. A lot of them are nothing more than trend followers, leverage long. So been devastation in a lot of the high-tech hedge fund world and it continues. Margin calls are going on all over and again this as a headline we're seeing right now.
All you need to know is the dollar going up is causing margin calls we may not be seeing, but the dollar is telling us margin calls continuing and it will continue. This confuses a lot of people in the gold (inaudible) and the crypto people. My thesis is the dollars going to fail up not down and at the end of this, that's when we you know sometime in the next…
Steve Bannon:
It's failing up but that's because the other fiat currencies, if you look at verses raw land or other commodities particularly food now and the inflation, it's really against because these other fiat currencies are so awful. It's the world's tallest midget is that not, that's my theory in this case. Even if it's start failing, up the midget just gets a little taller as the other guys shrink. Is that your aspect also?
Ed Dowd:
Absolutely but in the financial world this is where the money is flowing at the moment. It's flowing through the dollar because because there is a scramble to meet margin calls and their default. Every time somebody defaults..
Steve Bannon:
Hang on for one second there's also going to be a grave of defaults you know what the top I think Marxist economists gave a brilliant analysis of the junk credits. The underlying economy and really driving cash flow to support this is collapsing and that's what the happy talk business media don't want to talk about.
Ed Dowd you've got one more chart to show us. You’re quite negative cause you're a capital market’s guy about where this is heading. Walk us through this last chart.
Ed Dowd:
This is called the Baltic Dry Index. It's an index of prices of shipping prices of raw commodities across the globe. So, it's an index of shipping prices that ship commodities across the globe. It's an indicator of the real economy it hit a low in February.
Steve Bannon:
By the way for folks who don't know when you're in a boardroom this is inside baseball this is what CEOs and chairmen when a guy walks through hey here's the economy not what Jim Cramer is pitching on CNBC here's the reality so Baltic Dry Index walk us through what it shows you Sir.
Ed Dowd:
Bottom line, what it's showing me is it hit a low in February had little rally it just took out the low from February on August 19th, which is a structural problem technically, so this is going to continue to careen lower in our estimation because quite frankly the real economy is imploding. We got Europe closing down literally closing down. I'm hearing reports from small businesses can't afford to keep the light on, literally.
The small industrial complex is shutting down. This is happening and the effect on consumer discretionary spending in Europe will be devastating. Basically, corporate earnings in the US are about to implode and the stock market had a nice little rally this summer, peaked out August 16th and structurally it took out its August 2nd trading site below. We're probably going to take a new low and go a lot lower into the Fall.
This is looking like a disaster of epic proportions. And the real economy is bleeding and the video game known as the stock market is about to fall pretty hard and pretty fast in my humble opinion.
Steve Bannon:
Okay what we're saying is that these are all interconnected but don't believe the happy talk. You got to look at this reality and that's why Cortes and Navarro going to be back on today. Price control is the last refuge of a scoundrel when it comes to this stagflation and recession as somebody comes in with price controls that's what Europe is doing now.
Europe is imploding. Ed you've got a new website. I want everyone to go to the website, you're working on a book, but I want to know how they get to you on GETTR and how they get to your new website?
Ed Dowd:
GETTR @EdwardDowd. My new website is theyliedpeopledied.com. Basically, this is the information you can use to take action and shut down the vaccine mandate. And then my new book coming out November 8th, ‘Cause Unknown the Epidemic of Sudden Death in 2021 and 2022’. It's going to be I think an eye opener and hopefully changes the marginal mind.
Steve Bannon:
How do they get to you on GETTR?
Edward Dowd:
@EdwardDowd
END
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