A Big Reason the Dollar Is Up

All the euro does is cheapen German exports. [The Rude Awakening] September 29, 2023 [WEBSITE]( | [UNSUBSCRIBE]( A Big Reason the Dollar Is Up - The dollar is the prettiest major currency in an ugly parade. - The yen, pound, and Swiss franc are all down. - Those national currencies will survive. The euro won’t. [Biden’s WAR on The Middle Class…]( No president has sabotaged America’s hardest workers like Joe Biden has. That’s why I’m urging you to [watch this urgent presentation](. Because Jim Rickards’ legendary financial contact – who he calls ‘The Banker’ – may be the only man who can solve this American Income Crisis. [Click HERE to learn how 'The Banker' made]( in 4 days… $10,617 in 6 days… and $13,203 in 2 days](. [Click Here To Learn More]( [Sean Ring] SEAN RING Happy Friday from sunny Il Piemonte! Just a quick, final reminder that I’ll be on [Rickards Uncensored]( with Dan Amoss and Matt Insley today at 10 a.m. ET. I hope to see you there! Also, I’ll be writing from Lost Wages - I mean Las Vegas - next week, as I’ll be speaking at the 2023 Paradigm Shift Summit. Yes, I’m traveling fifteen hours to see you! I’m already looking forward to the 5:30 pm cocktail hour… That means Monday’s Rude will be the Monthly Asset Class Report, as it should be. But before that, I still want to discuss the resurgent dollar. Or, more precisely, the diving euro. What’s Going on Lately? The dollar is running, that’s for sure. Maybe it’ll stop soon. But perhaps it won’t. I’m firmly in the camp of “mathematically speaking, the dollar has to run higher because the euro is toilet paper.” Look at the last three months’ worth of movement in the dollar index: [USD] Sure, the last two days weren’t great. But we’ve had a sustained, rip-roaring 2 ½ month rally. It’ll continue because the feckless euro makes up 63% of the dollar index’s basket. Now look at the euro’s performance against the dollar: [EURUSD] As Liar’s Poker author Michael Lewis once wrote, “It’s going down faster than an 18-year-old on prom night.” I may have a few good days here and there, but ultimately, it will get crushed. You may think the reasons would be Europe’s vassalage, Germany’s deindustrialization, or soaring energy prices. And you’d be right on all counts. But the problem is much deeper than that. The euro’s weakness comes from first principles, ultimately leading to its demise as a currency altogether. [Man Who Predicted Bitcoin Warns: “Don’t Buy Bitcoin!”]( James Altucher first predicted Bitcoin all the way back in 2013… And ever since, he’s been one of the biggest advocates for it. But now, he’s warning Americans that buying Bitcoin could be a big mistake… [Click here now to see why](. [Click Here To Learn More]( How the Euro Came to Be. In 2010, as the European Sovereign Debt Crisis was brewing, Philippe Bagus of Universidad Rey Juan Carlos in Madrid wrote [The Tragedy of the Euro](. At the time, he was under Professor Jesus Huerta de Soto, the legendary Austrian School economist and author of [Money, Bank Credit, and Economic Cycles](. Bagus’ book posits that the Euro was designed as a political tool to further European integration rather than as an economically sound currency. This has led to a "tragedy of the commons" situation, where individual member states have incentives to run high deficits and engage in reckless spending, knowing that the costs will be socialized among all Eurozone countries. Bagus also points out that the European Central Bank (ECB) is caught in a bind. It can either bail out those profligate governments, risking inflation and moral hazard or refuse to intervene, risking the collapse of the Euro and the political project of European integration. Over the last 13 years, the ECB has chosen the latter course. But Bagus shows his hand in his introduction: The real reason the German government, traditionally opposed to the socialist vision, finally accepted the Euro, had to do with German reunification. The deal was as follows: France builds its European empire, and Germany gets its reunification. It was maintained that Germany would otherwise become too powerful, and its sharpest weapon, the Deutschmark, had to be taken away—in other words, disarmament. The Euro is more than a financial disaster; it's a cautionary tale of what happens when political ambitions trump economic realities. Let’s look at the meaty middle of Bagus’ book for more answers. The Socialization of Money. The Tragedy of the Euro delves into the "socialization of money." Specifically, the socialization of money is when monetary policy and control have been centralized and detached from market forces. The socialization of money began in earnest after World War I when countries abandoned the gold standard to finance their war efforts. This shift allowed governments to print money at will, leading to inflation and economic instability. The Bretton Woods system attempted to bring some order by pegging currencies to the U.S. dollar, which was, in turn, pegged to gold. However, this system fell apart in 1971 with the Nixon Shock. In the new fiat system, money was - and still is - a social construct backed by government decree rather than a tangible asset like gold. This centralization gives governments and central banks enormous power to manipulate the money supply, interest rates, and, by extension, the economy. While this might sound good in theory, it leads to moral hazards, inflation, and economic cycles that wouldn't occur in a more market-driven system. The socialization of money is particularly problematic in the context of the Euro. Unlike the United States, where a centralized government controls both fiscal and monetary policy, the Eurozone has a centralized monetary policy through the European Central Bank (ECB) but decentralized fiscal policies managed by individual member states. This disconnect creates a system ripe for abuse. Countries like Portugal, Italy, and Greece (the original PIGS) run up their national debts without facing immediate consequences, knowing that the ECB will step in to prevent a total collapse. The Maastricht Treaty. The Maastricht Treaty was signed in 1992 with the primary goal of furthering European integration. It listed the criteria for joining the Eurozone, such as low inflation and debt levels. However, Bagus points out that these criteria were more like guidelines than strict rules. [SJN Meme] There needed to be an enforcement mechanism to ensure that countries maintained fiscal discipline once they adopted the Euro. This lack of enforcement was not an oversight but a deliberate feature designed to make the treaty more politically palatable. The Maastricht Treaty created a system where the benefits of joining the Euro were immediate and tangible—lower interest rates, increased trade, and the prestige of being part of a unified Europe. In contrast, the costs—giving up monetary sovereignty and the risk of bailouts—were distant and abstract. This imbalance of incentives set the stage for the "tragedy of the commons" that the Euro has become. The Tragedy of the Commons. The "tragedy of the commons" is an economics and environmental science concept. It describes a situation where individuals, acting in their self-interest, deplete or ruin a shared resource, leading to the detriment of the entire group. Think of a shared fishing pond where everyone takes as many fish as possible, leading to the depletion of the fish stock for everyone. (Funnily enough, that mirrors the situation with the EU’s Common Fisheries Policy. The Med is practically empty of fish compared to the vital, abundant sea it used to be.) The Euro is a financial common. Each member state is incentivized to exploit the shared currency for short-term benefits, such as running high deficits and accumulating debt. Why? Because the immediate benefits accrue to the individual state, while the long-term costs - like inflation and financial instability - are socialized across all member states. Wrap Up The euro is like a joint bank account where one partner is frugal, and the other is a spendthrift. The frugal partner will eventually get tired of bailing out the spendthrift. But by then, the damage is done. The account is drained, and both are worse off. It's a glaring example of how good intentions - European unity in this case - can lead to disastrous outcomes when the economics don't add up. A friend of mine often says, “You can ignore the laws of economics. But the laws of economics won’t ignore you.” And that’s why, ultimately, the dollar will continue to soar. Have a great weekend! All the best, [Sean Ring] Sean Ring Editor, Rude Awakening X (formerly Twitter): [@seaniechaos]( In Case You Missed It… Without Trump, Republicans Master Debate [Sean Ring] SEAN RING Good morning Reader, I’ve never been a major fan of Canada. It’s probably why I’ve never traveled there. Canada is a frozen piece of tundra between Russia and the United States, with “free” healthcare and “affordable” universities, those things paid for with a [dependence on the US military for protection](. I remember hanging out with my friends in a London pub in the Noughties and asking a girl what part of America she was from. I had assumed incorrectly. And as a Canadian, she was wholly offended, walked away, and disappeared for the rest of the night. I guess she didn’t say “out and about” enough for me to tell where her accent was from. I’m sure the cowboys and the oilies out west are far more affable. But you can keep the Canadian “cosmopolitans.” That’s why I can’t stop laughing over this utter public relations crisis north of the border. Canada Gets a Case of The Clap It’s been nearly a week, and I still shake my head in sheer disbelief. How could you NOT know this old man was a Nazi? If you’ve been under a rock or not on X.com (formerly Twitter!), the Canadian Parliament invited a farm fresh, free-range, organic Nazi to their House to honor him for his service. Yes, this is the same government that accused Canadian truckers of being Nazis while having their bank accounts frozen. If you’re wondering why a commie like Justin Trudeau and a Jewish person like Volodymyr Zelensky are clapping for Nazis, it goes like this. Communism is an idiotic economic system that impoverishes any country it touches. But fascism allows corporations to do their thing (within The State’s wishes) … and then the government can tax the crap out of them at year-end. The Nazis, of course, were fascists. Ironically, the Chinese Communist Party is also fascist. The marriage of corporations and The State brings The State far more riches than it could ever get from deploying communism throughout the land. Just ask Mao. Credit: Toronto Sun So, The State (parading as communists) tells The People they’ve taken over those nasty private companies. But really, the State gives those private companies free rein within its directives and then takes its piece in the form of taxes. No organized crime organization could dream up a better scheme. [[CHART] Could Inflation Hit 20%+ In 2023?]( [James Altucher]( Take a close look at this scary chart pictured here… What you see is the money supply in America… And as you can see, the number of dollars in circulation has exploded in the last few years. In fact, more than 80% of all dollars to ever exist have been printed since just 2020 alone! Which is why some say inflation could soon explode even higher than it is now, to 20% or more. And if you’re at or near retirement age you must take action now to protect yourself… otherwise you risk losing everything. [Simply click here now to see how to survive America’s deadly inflation crisis](. [Click Here To Learn More]( Credit: [@catturd2]( Commies to Fashies I never really believed in the concept of a psy-op. It always seemed a bit too easy to use as any excuse for something happening, like an act of God. A psy-op, short for psychological operation, is a term used to describe a form of influence or propaganda designed to manipulate people's beliefs, emotions, and behaviors. Governments, military organizations, intelligence agencies, or other groups with specific agendas typically carry out psy-ops. These operations can take various forms, including disinformation campaigns, false-flag operations, or spreading misleading information to shape public opinion or achieve specific strategic goals. But Monday, as the story unfolded of how a Nazi — a real-life, genuine Nazi named Yaroslav Hunka — got a standing ovation in Canada’s parliament, it became clear to me that this whole thing was a psy-op. You see, the problem with communism is that it exterminates not only people but the economy. It’s the most idiotic economic system ever devised. When governments stop respecting private property, people stop working. It’s as simple as that. If you stop working, you have no economy. Governments figured this out a long time ago. So, governments stopped being out-and-out communists. They had to figure out a way to incentivize people to work while siphoning off the fruits of the labor. Unluckily for us — but luckily for them — a system like that already existed. It’s called fascism. Let’s Define Fascism Fascism is a complex and often misunderstood political ideology that emerged in the early 20th century, primarily in Italy under Benito Mussolini. It's a form of radical authoritarian nationalism that seeks to unify the nation by suppressing dissent, often through totalitarian means. Now, let's break it down a bit: - Authoritarianism: In a fascist regime, the state's power is centralized under a single leader or a small elite. This leader has the ultimate authority and often uses it to suppress dissent and opposition. - Nationalism: Fascism places a heavy emphasis on the unity and purity of the nation. It often involves a form of ethnic or cultural nationalism that excludes those who are considered "other." - Totalitarianism: Fascist regimes seek to control every aspect of life, from politics and the economy to culture and education. The state's influence penetrates deep into society, often using propaganda and state-controlled media to maintain control. - Militarism: Fascism often glorifies military power and is willing to use it aggressively to achieve its internal and external goals. - Anti-Communism: Fascism emerged as a reaction against the rise of socialism and communism. It opposes collectivist ideologies and promotes individualism, albeit within the constraints of a unified and homogenous nation. - Economic Corporatism: Fascist economic policy aims for a "third way" that's neither capitalist nor communist. It often involves a partnership between the state, labor, and corporations, organized into "corporations" based on their sector of activity. Of the above six characteristics, the US and Canada exhibit four in spades. Sure, they’ve traded nationalism for globalism. And they can’t come out as anti-communist yet. Too many of the hoi polloi think they’re in on the joke. But authoritarianism, totalitarianism, militarism, and corporatism are displayed for all to see. Isn’t a tiny elite like the WEF in charge? Isn’t the government trying to control our lives? How many bases does NATO have around the planet? Does Big Tech work with the government or against it? If you want to see just how off the deep end Big Tech has gotten, [watch this video of Palantir CEO Alex Karp saying his focus is to 'embarrass' competitors in AI to work with the U.S. government.]( It’s positively dystopian! In the context of today's geopolitics and economics, it's essential to be vigilant about the rise of fascist tendencies. The suppression of free speech, the erosion of individual liberties, and the concentration of power in the hands of a few are all red flags. Why? Fascism works well for governments… at least in the short term. You see, for most of the year, companies will operate normally as if they are capitalist entities (within the bounds the State sets). They will do all the accounting for you. They will do all the risk-taking for you. They will do all the manufacturing and shipping for you and provide any service you need. And then, at the end of the year, the government will look at the profits those companies made and take a pretty large portion of them, along with any finished products The State wants to function. You know, like the kind of spying software Palantir makes. Fascism, as an economic system, is best understood as the marriage of the corporation and the state. That’s how Il Duce defined it, and he was the first Fascist leader in Europe, so he ought to know. It’s like Big Tech getting in bed with the government… Or like Big Pharma getting in bed with the government… Or Big Banks getting in bed with the government. Sound familiar? And it’s not just the United States that it works this way. Look at China. China is ruled by something called the Chinese Communist Party, but are they communist? Are they doing anything the way that idiot Mao did? Are they starving their people? Deng Xiaoping, who succeeded Mao, said, “To be rich is glorious.” What the Chinese are doing right now is fascism. They have one ruling party. They let their companies do what they want even if they’re state-owned (SOEs), and then they tax the crap out of them at the end of the year. It works the same way in the United States. And in Europe. The danger is not worldwide communism. The threat now is worldwide Fascism. Wrap Up This episode in Canada’s parliament is to get you used to clapping for Fascists. Since Justin Trudeau is Klaus Schwab’s prize pupil, it makes sense they’d try this crap there. It’s not so much “NaziGate” as opening the gate for Nazis. After all, Chrystia Freeland’s grandfather served in Ukraine with Hunka. That’s why she was so enthusiastically clapping. [Max Blumenthal of The Grey Zone tweeted]( After serving as one of Hitler's top Ukrainian propagandists in occupied Poland, Michael Chomiak joined thousands of Nazi collaborators on the ratline to Canada during the 1950s. Following Chomiak's death in 1984, his granddaughter, Chrystia Freeland, followed in his footsteps as a reporter for various Ukrainian nationalist publications. Freeland was an early contributor to the Encyclopedia of Ukraine, which was edited by her grandfather's former boss in Poland, the Nazi collaborator and ethnic cleansing advocate Volodymyr Kubijovyč. Next, she took a staff position at the Edmonton-based Ukrainian News, where Chomiak had served as editor. A 1988 edition of Ukrainian News featured an article co-authored by Freeland, followed by an ad for a book called “Fighting for Freedom” which glorified the Ukrainian Waffen-SS Galician division. During Freeland’s time as an exchange student in Lviv, Ukraine, she laid the foundations for journalistic success. From behind cover as a Russian literature major at Harvard University, Freeland collaborated with local regime change activists while feeding anti-Soviet narratives to international media bigwigs. “Countless ‘tendentious’ news stories about life in the Soviet Union, especially for its non-Russian citizens, had her fingerprints as Ms. Freeland set about making a name for herself in journalistic circles with an eye to her future career prospects,” the Canadian Broadcasting Corporation (CBC) reported. Citing KGB files, the CBC described Freeland as a de facto intelligence agent: “The student causing so many headaches clearly loathed the Soviet Union, but she knew its laws inside and out – and how to use them to her advantage. She skillfully hid her actions, avoided surveillance (and shared that knowledge with her Ukrainian contacts) and expertly trafficked in ‘misinformation.'” In 1989, Soviet security agents rescinded Freeland’s visa when they caught her smuggling “a veritable how-to guide for running an election” into the country for Ukrainian nationalist candidates. She quickly transitioned back to journalism, landing gigs in post-Soviet Moscow for the Financial Times and Economist, and eventually rising to global editor-at-large of Reuters – the UK-based media giant which today functions as a cutout for British intelligence operations against Russia. Poland and Russia are now exploring options to extradite Hunka to their countries. Do Poland and Russia want the same thing? Fascism makes strange bedfellows. All the best, [Sean Ring] Sean Ring Contributing Editor, The Morning Reckoning feedback@dailyreckoning.com X (formerly Twitter): [@seaniechaos]( [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. To end your Rude Awakening e-mail subscription and associated external offers sent from Rude Awakening, feel free to [click here.]( Please note: the mailbox associated with this email address is not monitored, so do not reply to this message. We welcome comments or suggestions at feedback@rudeawakening.info. This address is for feedback only. For questions about your account or to speak with customer service, [contact us here]( or call (844)-731-0984. 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