Lunch in Chamonix, Dinner at IKEA

This weekend, we drove around Italy and France. [The Rude Awakening] February 13, 2023 [WEBSITE]( | [UNSUBSCRIBE]( [Ed. note: Important housekeeping note: Coming soon, your emails will be coming from a new email address: rude@mb.paradigmpressgroup.com. Ensure delivery of every email in your subscription by following [these simple whitelisting instructions.]( Lunch in Chamonix, Dinner at IKEA - The SPX finished the week below 4,100. - Could this be a classic “bear trap?” - Let’s see how the market does today. In the meantime, European cuisine. [Download My New Survival Guide Today!]( I’ve created a BRAND-NEW “2023 Crisis Survival Guide” that I’m making available to all of my Strategic Intelligence readers today. This short 54-page document has everything you need to know to protect yourself and your family in times of crisis. Things like what foods to stock up on now, staying safe during periods of rioting and looting and more. Inside I break down all of the coming threats you face and how to prepare. [>> To see how to download your copy, click here now](. [Click Here To Learn More]( [Sean Ring] SEAN RING Happy Monday! Between what’s happening in Ohio, Russia-Ukraine, and the markets, I’d assume we go back to sleep for a few months. Maybe all this negativity will wash over us by then. So, I thought I’d take Oddball’s advice. If you haven’t watched Kelly’s Heroes, I can’t recommend it enough. Clint Eastwood and Telly Savalas were great in it. But Donald Sutherland was masterful as Oddball, the hippy tank driver. In one scene, Oddball yells at his buddy Moriarty (The Love Boat’s Gavin MacLeod) for being so negative. [SJN] That’s almost verbatim and all you need to know. So, in this edition of the Rude, I’m going to drive you around Italy and France for a bit. Saturday in Chamonix I mentioned last week that Pam turned 42 on Saturday. And she wanted to get out of town for a bit. I was happy to oblige, but as we don’t own a car here yet - for reasons too bureaucratic to explain - we needed to rent one. We do that quite often, but not at such short notice. Luckily, a lovely Volkswagen Golf was available, and we took it for Saturday morning. Pam hasn’t been out of Italy since we arrived, so I thought we’d get out of the country a bit. (In Italy, you can only leave the country to return to your home country when applying for your residence card. Unfortunately for us, it took Pam seven months to get it!) One of the closest foreign places by car to our house is Chamonix. Chamonix (SHA-mo-nee) is known for being one of the world's oldest and most famous ski resorts, attracting winter sports enthusiasts from all over the globe. [SJN] Credit: Sean Ring The town is surrounded by mountains, including the famous Mont Blanc, the highest peak in Western Europe. Besides skiing and snowboarding, you can ice climb, snowshoe, and dog sled. We even saw some nutcases in parachutes base jumping. They were so far up the mountain I couldn’t get a good picture! In the summer months, Chamonix becomes a popular destination for hiking, mountaineering, and rock climbing. There are also several scenic cable car rides, including one that takes visitors up to the Aiguille du Midi, which offers breathtaking views of the surrounding mountains and valleys. (Unfortunately, we were too late to head up there.) Chamonix is also known for its charming alpine architecture and vibrant nightlife, with many bars, restaurants, and shops to explore. [SJN] So we took the ride up there, past Turin, Ivrea, and Aosta. We also finally got to go through the Mont Blanc Tunnel, which goes under Mont Blanc and makes the ride from Italy to France and vice versa a cinch. Chamonix didn’t disappoint. We were famished when we got there, so a late lunch was the first thing on our list. For starters, Pam and I shared French Onion Soup and a charcuterie plate. I know Italian food is fantastic, but there’s something about the French stuff I adore. Both starters were delicious. Then we shared a cheese fondue, which Pam never had, and I haven’t had for about twenty years. [SJN] The Birthday Girl, The Brat, and The Fondue Credit: Sean Ring Again, it was delicious. For dessert, Pam had a panna cotta covered in rum. I ate the Savoyard Coupé, which is raspberries and blackberries covered in whipped cream and blueberry ice cream. Mine was amazing, but I didn’t taste Pam’s while driving. Then we spent five minutes explaining to Micah that his chocolate glace (ice cream) wasn’t made of glass. After lunch, we walked around and shopped. Pam picked up some saucisson, brie de Meaux, and camembert, which we’ll probably eat tonight. Aussie Trav called, and we chatted. As we hung up, he said, “Try to stay until dusk because the mountains turn pink.” I didn’t want to drive home in complete darkness. But luckily, as we headed back through the tunnel, the mountains turned a lovely pinkish hue. Saturday Night in IKEA Just when I thought I was a cultured man, Pam asked me to stop at her “happy place” on the way home so we could buy some flowers for the house. Well, it was her birthday, so… While we were there, Micah got hungry, so Swedish meatballs it was! My mother called to ask how we were doing. I told her, “Well, Ma, lunch in Chamonix and dinner at IKEA.” Excitedly, she asked, “Is IKEA far from your house?” “Not far enough, I’m afraid…” [“Biden Blackouts” coming this winter?]( [Click here to learn more]( A former advisor to the CIA and Pentagon just made this dark prediction: Calamity Joe’s sabotage of the Nord Stream pipeline [His Evidence Here]( was suicide. In the next 75 days, Americans will face fuel shortages… …widespread blackouts… …empty grocery shelves… …up to $1000 energy bills… …drained retirement accounts, and… …a massive crime wave. This former CIA advisor says most Americans will suffer this winter. But a few will WIN big from the turmoil. [Here’s how to be one of them](. [Click Here To Learn More]( Sunday in Savona We had rented the car until Monday morning, so I suggested we head south to the coast on Sunday. I love the mountains, but the sea really does it for me. Before I get to the city itself, our ride down was a treat. We decided to take the road through the Langhe Valley. We bobbed and weaved along the sides of hills for almost two hours. It was amazing. We saw the Alps tower over Piedmont, but this picture doesn’t do it justice. [pub] Credit: Pam Ring If you haven’t heard of Savona, don’t feel alone. I had never heard of it before we moved here. Savona is west of Genoa, which means it’s got sandy beaches. Anywhere east of Genoa, and it’s the rockiest pebbles your poor little piggies will ever get impaled on. Savona is known for its beautiful beaches and rich maritime history, with a port in use since Roman times. Savona has a mix of old and modern architecture, with historical buildings such as the Cathedral of San Giovanni Battista and the Palazzo della Rovere and modern structures like the Porto Desidero. The city has several museums and cultural institutions, including the Museo Navale del Mar Ligure, which displays the city's maritime heritage history. [SJN] Credit: Sean Ring The city also has several parks and gardens, such as the Giardini Botanici Hanbury, which are famous for picnics and outdoor recreation. By the way, the below is a cannolo siciliano—two or more cannoli siciliani. The green bits are pistachio. Yum! [SJN] Credit: Sean Ring It was delicious. Savona has that old Mediterranean city vibe about it that I like very much. Stone palazzos, wide walkways, and beautiful seaside. I recommend it if you’re already in Italy. But don’t just come here for this. Wrap Up I hope you enjoyed my little outing this weekend. I’ll be back on economics and finance tomorrow. We’ve got CPI coming out tomorrow. And retail sales and Empire Manufacturing on Tuesday. Hopefully, the market picture will clear up by then. Have a wonderful week ahead! All the best, [Sean Ring] Sean Ring Editor, Rude Awakening In Case You Missed It… Will the Almighty Dollar Get Mighty Again Soon? [Sean Ring] SEAN RING It’s time for that final cup of joe for the week. You deserve it. But not nearly as much as that adult beverage you’ll imbibe this evening at 5:01 pm. That Hersh report yesterday wound me up so much that I’m finding it hard to pick up my figurative quill again. It’s like winning a big game and then having to play again a few days later. Getting the juices going again is more difficult than usual. Pam’s birthday is tomorrow. She’ll turn a ripe, but young 42. She looks amazing. I’m loath to take Warren Beatty’s advice to trade her in for two 20s. Speaking of Old Shagbark (sorry, I couldn’t resist!), let’s talk about the dollar today. We may be getting another reversal in the dollar index. Dollar Liquidity and Why It Matters… For Now. I’m unsure if we ever went through this, but it’s good to know. What do we mean by “dollar liquidity” or “offshore dollar funding?” From the [Bank of International Settlements]( The US dollar dominates international finance as a funding and investment currency. Although the United States accounts for one-quarter of global economic activity, around half of all cross-border bank loans and international debt securities are denominated in US dollars. Deep and liquid US dollar markets are attractive to non-US entities because they provide borrowers and lenders access to a large set of counterparties. The pre-eminence of the US dollar as the global reserve currency and in trade invoicing further motivates its international use. Let’s parse out the above. But before we do, understand that US dollars outside the United States are called “Eurodollars.” That’s not a reference to the EURUSD cross-currency rate. (In fact, “euro-” is the most overused prefix in finance and causes loads of confusion for newcomers.) To be clear, offshore dollar funding refers to borrowing US dollars from sources outside the United States. Again, these are called Eurodollars, which have nothing to do with the euro currency itself. This type of funding is vital for several reasons: - Access to capital: Offshore dollar funding provides companies and financial institutions access to capital they may not be able to get domestically, particularly in countries where local currency funding sources are limited. (Think Africa and Latin American countries.) - Diversification: Borrowing offshore in US dollars provides diversification benefits by reducing exposure to currency and interest rate fluctuations in the borrower's home country. (Think Argentina.) - Cost savings: Offshore dollar funding can be cheaper than borrowing in local currency, particularly in countries with high local interest rates. (Think Australia.) - Global trade: Offshore dollar funding is critical for many multinational corporations that conduct business in multiple currencies and need access to US dollars to pay for goods and services. (Think Fortune 500 Companies.) - Liquidity: The US dollar is the world's most widely traded currency and is often seen as a haven during times of financial uncertainty. (Think of all the big players in a regular market.) That’s the upside. Here’s the downside. Say you’re an Indonesian nickel miner who borrows in dollars (and, therefore, must pay back that debt in dollars). But your revenue is in Indonesian rupiah. If the dollar/rupiah rate roofs it - that is, the dollar strengthens hard against the rupiah - your rupiah revenue doesn’t buy enough dollars to pay back the interest on your loan, let alone the vast principal. So when there’s even a whiff of a dollar rally coming, international companies who borrowed in dollars try to buy USD as fast as they can at a lower price. Of course, the price doesn’t remain cheap, causing the dollar to strengthen further. If the buying doesn’t diminish, it may lead to the dreaded “dollar squeeze.” What’s a Dollar Squeeze? A dollar squeeze is a shortage of US dollars in the global financial system. This happens when there is a rabid demand for US dollars relative to its supply. It’s insane to think with all this money printing, those dollars can get scarce, right? It can. Most dollars are electronic. So, no pallets of paper are moving around on ships. Just entries on a computer can change the supply of dollars. As for the demand for US dollars, it can increase for several reasons, including: - Financial stress: During financial stress, investors may seek safety in US dollars, increasing demand for the currency. - Trade imbalances: If a country has a large trade deficit, meaning it imports more goods than it exports, it may need to purchase US dollars to pay for the imports. This can lead to a shortage of US dollars in that country's financial system. - Sanctions: Sanctions can limit a country's access to US dollars, making it challenging to obtain the currency it needs to pay for imports or service its debt. (Yes, these stupid sanctions are why Russia and China are trying to build a parallel financial system independent of the US dollar.) A dollar squeeze significantly impacts the global economy. When US dollars are in short supply, it can become more expensive for countries and corporations to obtain the currency they need, leading to higher borrowing costs and increased financial stress. It also causes foreign currency depreciation. That harms a country’s asset values and its citizens’ purchasing power, as most central banks print more money to “solve” the problem. With all that theory behind us, let’s look at the USD now. [Warning: Will “Bidenflation” Destroy Your Retirement?]( [Click here to learn more]( If you’re like most Americans, you’ve worked hard for decades to build your financial legacy. And now, as a result of Biden’s disastrous money printing policies, that’s all at risk. According to one top retirement expert, “Bidenflation” threatens to destroy your retirement and make your hard-earned savings worthless. That’s why you must take action right away to protect yourself… [Click here now to get the simple, step-by-step actions to survive “Bidenflation.”]( [Click Here To Learn More]( What’s the Dollar Doing? This chart is the Fibonacci chart I “borrowed” from JC Parets of AllStarCharts.com ages ago: [SJN] Let’s zoom in on the last decade, as it’s much easier to see: [SJN] Once we hit 2021 or so and bounced off the 90 level with a double bottom, it was straight up for the dollar. And once we got above 101.57, I thought we’d hit 120 in no time. That wasn’t meant to be. We hit 115 and then crashed back down to 101.57 again. We held that level and have rallied back to 103.11. If you are a [Strategic Intelligence Pro]( subscriber, my friend and colleague Dan Amoss sent a trade alert yesterday regarding this subject. If you haven’t read it yet, please do! Could This Be a Whipsaw? Maybe. If the dollar turns up from here, we may get a reversal of the stock market rally. But not necessarily. And the same goes for gold. Remember this critical market axiom: correlations work… until they don’t. So, it’s perfectly possible that if the dollar rallies, gold may also continue to rally. But I’d err on the “wary” side of a dollar rally. Wrap Up. I hope this piece cleared up any misconceptions about the dollar and its importance in overseas markets (for now, anyway). If the dollar turns and strengthens, it doesn’t necessarily mean the rest of the markets will crash. Yes, a weak dollar helps assets. After all, you’d need more weak dollars to buy goods and services than strong ones. But correlations don’t always hold up. And that’s what we need to look out for. In the meantime, have a wonderful weekend! All the best, [Sean Ring] Sean Ring Editor, Rude Awakening P.S. I wrote yesterday’s [Morning Reckoning]( on bailouts and bail-ins and how you can avoid both. Head over there now if you missed it! [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2023 Paradigm Press, LLC. 808 Saint Paul Street, Baltimore MD 21202. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. 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