Get Your Top Trades Here, Folks!

Greg Guenthner and Matt Insley talk trades in this fab video [The Rude Awakening] November 24, 2023 [WEBSITE]( | [UNSUBSCRIBE]( Get Your Top Trades Here, Folks! [Sean Ring] SEAN RING Dear Reader, I hope you enjoyed a Thanksgiving feast for the ages yesterday. Today, instead of reading a big Rude, I present you a video with my friends and colleagues, Paradigm’s Fearless Leader, Matt Insley, and Greg Guenthner, Daily Reckoning contributor and Head of Paradigm’s The Trading Desk. [Click here to learn more]( Click the pic or [here]( to watch the video. [“Position terminated” — 4,000 staff fired thanks to AI]( Will AI take your job too? Goldman Sachs predict 300 million jobs will be lost or downgraded as a result of AI. And if recent reports are anything to go by, those losses have already begun. But there might just be a silver lining to all this… James Altucher – a man who’s been involved in AI since the late 1980s – says he’s found a way for regular folks to turn the tables on the elite… …and start using AI to potentially grow much wealthier. It’s all thanks to a patented $10m AI system James has discovered that he believes has huge implications for people all over America. [Click here for everything you need to know.]( [Click Here To Learn More]( Here’s a choice quote from their talk: I know the news has been crazy this year, but we had that mini-banking crisis back in the spring that sort of put things on pause. But as you can see here, and this is the NASDAQ 100, these are the biggest tech stocks in the world right here. The market absolutely ripped higher into the summertime, and then we topped out where the market should have been topping out in July. And when I say that I'm talking about seasonality. This is a pre-election year. Generally in a pre-election year, you tend to see markets move higher during Q1 and Q2 and then level off in the summer. They tend to go down in the early fall and then snap back and close at the highs in November/December with a big end-of-year meltup. It doesn't always happen that way, but seasonality is very useful if you look at these patterns and you say, Hey, where could the market possibly be going and use that kind of as a roadmap. And when we have a year like this year that's followed seasonality so perfectly, it's been much easier to gauge where these potential turning points could be. But again, a big rally to start 2023 topped out in July. And then August/September things got a little bit wonky, and then all the bears came out of hibernation in October. Here’s another one: Everybody's been so focused on the NVIDIAs. I mean look at this, when stocks were correcting pretty hard back in October, Nvidia really wasn't doing that much. It was still in this nice consolidation range that we see right here and we see the surge here from earlier this year. I mean at the start of the year it was $140 and we know what's happened since then. Nvidia sucked all the air out of that AI bubble and took all of those investors and everybody wanted to be in Nvidia. This is the one stock that everybody's had to own. They've had to own it all year long and they hid out in it when the market got wonky here in August, September, and October, and now it's pushing again into new highs. I mean it's been an incredible performer, but if you're thinking tactically and you're thinking what's going to be the next thing that moves the next great trade on the market, I don't think it's going to be in Nvidia. I don't think it's going to be Apple. I don't think it's going to be Meta. I think it's going to be the smaller stocks. I think it's going to be the tech survivors, the stocks that got smashed in 2022 and had trouble getting off the mat after the summer rally here in 2023. I think it's going to be those stocks, the ones that survived this period right here and have gotten beaten down, the stocks that are down 60, 70, 80% from those highs. On Crypto: Crypto winter was a big thing and the question throughout the end of 2022 and early 2023, I had, was enough of that speculative money completely burned out of the crypto space to give this thing a shot at setting back up again. On the long side, a lot of people may not have noticed this, but right here, this big move in Bitcoin from $27k all the way up to $37k is a $10,000 move in Bitcoin almost that happened before stocks bottomed out in October. We had crypto traders pushing Bitcoin higher in the face of what looked like a breakdown in the stock market. Something like that really gets my attention because it doesn't add up. Your average crypto trader or investor, whatever you want to call them, is a speculator, and usually, the Bitcoin trade and the tech growth trade hold hands, they kind of do the same thing, maybe not in orders of magnitude, but they tend to directionally go the same way because it's the same type of trader. Wrap Up I encourage you to take some time today to [listen to Greg’s market analysis](. Few people do it better than he does. Have a lovely weekend! All the best, [Sean Ring] Sean Ring Editor, Rude Awakening X (formerly Twitter): [@seaniechaos]( P.S. It cost $10 million to build… It’s protected by an iron clad patent with the US government… And a Cornell trained computer scientist (who’s now a millionaire) says it’s a great way to use artificial intelligence to swing for big returns. But despite the fact this system took twenty years to build… And despite the fact the secrets behind it are kept under lock and key (the coders who built it are work in isolation as a security measure)… We’ve found a way for you to take advantage of it, starting immediately. In fact, it just flagged a new trade… which is ready and waiting for you. Want in? Just hit the link below for the details: [TRADE OPEN: Get the full story on patented $10m AI systemby clicking here.]( In Case You Missed It… Will Dollarization Make Argentina Great Again? [Sean Ring] SEAN RING This week, we were joined by former Fed insider Danielle DiMartino Booth on the Paradigm Press YouTube Channel. She revealed what you might not be seeing in this market environment, why a commercial real estate collapse will tank residential house prices, and how the Fed's latest moves will play out in 2024. Plus, she gave ways you can make sure you're prepared for what's to come. You can check out that interview by clicking below… [[ And today, Matt Insley will talk with Jim Rickards about the Biden-Xi Summit that happened last week and why it was such a disaster. To be notified when that interview goes live, make sure you [subscribe]( and click “all” notifications so you can be the first to know when we upload! Speaking of foreign leaders… Libertarians the world over wet their pants in unison — not collectively, mind you —when Javier Milei won the Argentine presidency on Sunday. I must admit I was gleeful, as nothing makes me happier than The Left taking one in the gooey bag (or whatever they’ve got in their pronoun pants nowadays). But upon closer inspection, should I — or anyone else — be overly hopeful that Milei will deliver Argentina from its inflationary evil? Let’s face it: his policies are contradictory. He called the world’s second-largest economy and largest military power China an “assassin” and embarrassed Brazilian President Lula da Silva by saying Argentina would not enter BRICS. This is despite Lula’s heavy lobbying for his reluctant partners to drop Algeria in favor of Argentina. “How many Arab countries are we taking in? Wouldn’t a South American country that partially controls the southern sea routes around the continent be better?” India was thrilled, as France pushed them hard to reject the Algerian application. Apparently, India owed France, Algeria’s ever-beneficent former colonial overlord, some favors. Algeria was not pleased, to say the least. Milei also wants to drop the peso, adopt the dollar, and be America’s (and Israel’s) unquestioning partner. Let’s get this straight: he wants to burn down his own central bank (Praise Ron Paul! Hallelujah!)... but wants to adopt the currency of a country over whose central bank he has no control. And worse, that central bank has absolutely no obligation to consider Argentina’s position when making its decisions. Heck, it barely takes into account what’s best for Americans! If Donald Trump doesn’t get back in the Oval Office in 2025, Milei’s plan will be in tatters. But let’s leave the politics for now and look at the economics. I’m neither a South American political expert nor an Argentinian economic expert. But we can still make a few inferences about Milei’s plans by looking at what he wants to do, where it’s been done before, and how successful it’s been. And with all the talk of de-dollarization, Argentina looks to buck that trend by dollarizing its economy. What does that even mean? [Will Inflation’s Second Wave Wipe Out America’s Middle Class?]( [Click here to learn more]( During the 1970s, inflation lasted for years and came in three separate waves. Each wave was far worse than the last. [Today, the same exact thing is happening again.]( Is the price of food, gasoline, housing and more about to skyrocket even higher? WARNING: The next wave of inflation could wipe out America’s middle class. [== > Get ready for “Inflation’s Second Wave.” Click here now to see my urgent warning.]( [Click Here To Learn More]( What Is Dollarization and Why Do It? First, let’s define the term. Dollarization of an economy refers to a situation where a country adopts a foreign currency, usually the U.S. dollar, in addition to, or instead of, its own national currency. This can happen in various forms: Official dollarization is when the foreign currency becomes the sole legal tender. The country gives up its own currency and fully adopts the U.S. dollar for all financial transactions. This is a more permanent and comprehensive form of dollarization. Unofficial or partial dollarization is when the U.S. dollar is used alongside the national currency. It often occurs in countries with high inflation or unstable local currencies. People and businesses may prefer to use dollars for savings, transactions, or pricing goods, although the national currency remains legally in circulation. Financial dollarization is what happens when residents of a country hold a large portion of their assets (like bank deposits and loans) in dollars, even if everyday transactions are still carried out in the local currency. The reasons for dollarization vary. It's often seen as a way to stabilize an economy, especially in countries with a history of hyperinflation or monetary instability. This is the most obvious reason Milei would opt for dollarization. Argentina’s economy is massively export-dependent. Removing the volatile Argentine currency from the buying decision would at least temporarily increase exports. Also, by adopting a stable, internationally recognized currency like the U.S. dollar, these countries can reduce inflation and interest rates, and potentially attract more foreign investment. But dollarization has downsides. Countries lose control over their monetary policy, including the ability to print money or adjust interest rates to respond to economic changes. This is akin to a loss of sovereignty. If you don’t own your currency, you don’t run your country. Just ask anyone in the eurozone. Dollarized countries also don't earn seigniorage, the profit made from issuing currency. That stays at the Federal Reserve. Dollarization has been adopted in various forms by countries in Latin America, Southeast Asia, and other regions. Examples include Ecuador and El Salvador, where the U.S. dollar is the official currency, and others like Cambodia or Lebanon where the dollar is widely used alongside the national currency. Examples of Dollarized Economies Here are some examples of countries adopting currencies other than their own. - Ecuador adopted the U.S. dollar in 2000 after a severe banking crisis and hyperinflation. Dollarization helped stabilize the economy, brought down inflation, and restored confidence in the financial system. However, it also meant that Ecuador lost control over its monetary policy. - El Salvador dollarized in 2001 to stabilize its economy and encourage investment. The move helped to reduce inflation and interest rates, and it simplified trade and financial transactions with the U.S., a major trade partner. But like Ecuador, El Salvador relinquished control over its monetary policy. Except now, El Salvador adopted Bitcoin as legal tender, locked up all its criminals, and looks like Valhalla as a result! - Panama has used the U.S. dollar alongside its own currency, the Balboa, for over a century. This unique system has contributed to Panama's financial and banking sector stability and has made it an attractive destination for international business and finance. - Zimbabwe. After experiencing hyperinflation in the late 2000s, Zimbabwe adopted a multi-currency system that included the U.S. dollar. This helped to restore value and stability to the currency system, though the country still faces numerous economic challenges. - Montenegro and Kosovo have adopted the Euro unofficially. While not unique examples of dollarization (since they use the Euro), their experiences are similar. Adopting a stable, internationally recognized currency helped stabilize their economies post-conflict, though they also face the limitations of not having control over their monetary policy. In these cases, dollarization brought immediate benefits like stabilizing prices, attracting foreign investment, and enhancing the credibility of the financial system. However, long-term success is more complex and involves trade-offs, such as losing the ability to conduct independent monetary policy and being vulnerable to economic conditions in the issuing country (like the U.S. for the dollar). The overall impact of dollarization varies widely based on the specific circumstances of each country. What’s “Losing Control Over Monetary Policy?” We’ve mentioned that phrase quite a few times already. But what does it mean? “Losing control over monetary policy” is a significant consequence of dollarization. Monetary policy refers to the actions a central bank or monetary authority takes to manage the supply of money and interest rates in an economy. It's a key tool for influencing economic activity, inflation, and exchange rates. When a country adopts another currency, like the U.S. dollar, as its official currency, several things happen: No Control Over Interest Rates: The country cannot set its own interest rates. It's tied to the interest rate decisions made by the foreign central bank - the Fed and Jay Powell - whose currency it has adopted. For example, if Ecuador, which uses the U.S. dollar, wants to change interest rates to stimulate its economy or control inflation, it cannot; it's subject to the U.S. Federal Reserve's decisions. Cannot Print Money: The country loses the ability to print its own currency. Normally, I’d love this, because it means the country cannot use tools like quantitative easing (increasing money supply) to stimulate the economy during a downturn. But just ask Italy, Spain, and Greece how they feel about this inability. It’s particularly challenging during economic crises when the country might need to inject more money into the economy. Reduced Ability to Respond to Economic Shocks: With dollarization, a country's capacity to react to local economic conditions is limited. For example, if the economy is in a recession, the country cannot devalue its currency to make its exports cheaper and stimulate growth, as the currency value is determined by the foreign central bank's policies. Again, southern Europe knows this all too well. Loss of Seigniorage: Seigniorage is the profit a government earns from issuing its own currency, especially when the cost of producing money is less than its value. By using a foreign currency, the country forgoes these potential earnings. The best place to read about this is Garet Garrett’s [The Bubble That Broke the World](. In it, Garrett writes about how the Bank of England made GBP 400 million per year in seigniorage and how the United States wanted to wrest what the French now call “the exorbitant privilege” from the British. Wrap Up In summary, dollarization can provide stability and reduce inflation, but it comes at the cost of losing crucial tools to independently manage an economy. This makes a country more vulnerable to external economic changes over which it has no control. Perhaps Milei thinks this is the most obvious way to get his country back on track. But it’s fraught with risk and contradicts his free market rhetoric. Still, I wish him luck. All the best, [Sean Ring] Sean Ring Editor, Rude Awakening 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. 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