For the last several years, the dollar has been decimating foreign currencies since the U.S. stock market was the "only game in town" and foreigners from all over the world invested in our markets.
When that happened, they had to exchange their currencies for ours and that caused massive selling in their home currencies and massive buying in the U.S. dollar.
(Note: Much of the time, there are a number of markets around the world performing well. But for the last few years, it's been a very lopsided market that caused unusual flows out of foreign currencies and into the greenback).
Well, in 2017, the tide began to turn for many foreign currencies as they finally bottomed out. But it didn't become evident that those currencies were bottoming until the last few months. Let's take a look at the chart below and I'll show you what I mean.
Just a couple of days ago, the Canadian dollar was the latest currency to join the rally against the dollar as it officially broke its downtrend line. But over the past couple months, we've begun to see the euro, Swiss franc, British pound, Japanese yen and gold all breakout higher against the dollar.
This shows that money flows are now exiting the U.S. markets and the money is being repatriated back home to their home countries. When this happens, the exact opposite of what happened before begins to unfold. Dollars are sold and their home currencies are bought once again as they bring the money back home and invest it into their own beaten down stock markets which are now a great value relative to the expensive U.S. stock market.
So look for this rally in currencies to continue over the next two to three years at least because trends tend to last a long time, but currencies tend to trend in one direction longer than most assets. So we could see the dollar now trend lower for years to come which will continue to boost foreign currencies and metals like gold and silver.
Also, other commodities like oil, etc. will be great beneficiaries of the plummeting dollar. The tide is turning. Most people haven't picked up on it yet.
Yet the tide has turned. And I believe you'll see foreign stock markets begin to outperform our own stock market for the first time in many years.
Therefore, the places to be are now gold, silver, other commodities, commodity-related stocks, foreign stocks, emerging market stocks and in exchange traded funds (ETFs) that track commodities, foreign currencies and emerging markets. These are the pockets of value that remain out there and you'll see money coming out of our stock market overall and into these pockets of value.
Be mindful of these trend changes. The masses won't learn of them until it reaches the financial media channels and by then the values will be long gone.