Raoul Pal+ Your Authors @RaoulGMI Founder/CEO - Global Macro Investor and Real Vision Group, Business Cycle Economist, Investment Strategist, Economic Historian, Traveller and Rum Drinker.. Mar. 18, 2020 2 min read + Your Authors

Just an update from me, in case you are interested...

Ive just closed all short positions in equities, oil and HYG and had closed bonds a while ago. I am now 100% focussed on the on the US dollar, which is a wrecking ball.


I think that the authorise have no chance to catch up on what is happening in markets. One by one, they are shutting down. All liquidity has gone as key parts of the global financial architecture have stopped functioning entirely.

The net result is going to be a scramble for dollars unseen in our lifetimes. The 1930's was the last time we saw this as money poured into the US, forcing an eventual devaluation vs gold.

This time the very dollar system is at risk, as I have always said.

And the way it is going to play out is via dollar strength, not weakness. I do not see any mechanism to stop this. Oil falling to $22 in a couple of week is a shock that the global funding markets can not take.

There are simply not enough dollars being generated as the world

shuts down.

There is no funding mechanism to alleviate it.

I don't think swap lines are going to work. There is no way to create the $15trn needed offshore and also provide for the dollar shortage onshore in the US.

This is going to get really, really ugly for EM and global economies and banking systems. The US has its own set of problems post-regulation.

All global regulations post-GFC are going to have to be undone but Im not sure we will have time to change.

At the end of all of this, we will need to create a new system from scratch. The global central banks have been telling us this for a long time now.

It will take time to play out and central bank balance sheets are going to explode to levels never imagined.

We have created the perfect storm.

An unimagined global financial, economic and potentially humanitarian crisis that is going to take everything we've got to stop it.

Im just not sure its possible. Urgh. We have to hope for the best, plan for several unimagined outcomes too...

The Dollar and Bitcoin is all I got right now. Im adding to bitcoin and Im max long dollars (vs EUR,GBP, AUD, BRL, MXN, KRW, CNY, JPY).

Good luck. This is not a drill.

You can follow @RaoulGMI.


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