“The U.S. Dollar will remain the world’s currency for the next fifty years.” — Warren Buffett
Despite the Federal Reserve’s quantitative easing (QE) policy and its decision to cut short-term interest rates to zero (the interest on 90-day T-bills fell below zero today), the dollar continues to surge ahead.
And we’re profiting in Forecasts & Strategies and TNT Trader, where I’ve been recommending the U.S. Dollar Index Fund. In fact, our call options are up an average of 950% in three weeks! When we sold half of the options on March 17, we obtained a 414% gain. Then, we sold the other half on March 19 and nabbed a 1,485% gain. (For more details, go to www.markskousen.com, or call Grant at 202-677-4492).
The current liquidity squeeze has been good news for King Dollar and my subscribers.
Against its rivals, including the euro, the pound and the yen, the dollar hit its highest level since March 2017 and has gained 7% in the past nine trading sessions.
It is achieving its biggest rising run since 1992 as the demand for funding has skyrocketed during the coronavirus crisis. After the European Central Bank announced a 750 billion euro asset purchase program in response to the coronavirus outbreak, the euro turned lower. It is now at a three-year low of 1.07 euros against the buck.
“Central banks are stepping up their liquidity actions, but it is not enough to make sure the dollar scarcity disappears and, as a result, the dollar continues to be the favored currency across the board,” said Manuel Oliveri, a currency strategist at Credit Agricole in London.
Don’t Count Gold Out Yet
The U.S. dollar is king now, but it won’t last forever due to the sharp rise in the deficit and out-of-control government spending. Gold is a better long-term play. And yes, we are invested in gold. too!
The Calming Influence of ‘The Maxims’!
The quote from Warren Buffett at the beginning of this e-letter reminds me of the value of my popular little book, “The Maxims of Wall Street.” It’s Buffett’s favorite quote book.
I’ve received several letters from subscribers who say that reading quotations from “The Maxims” has been comforting in these trying times when the market is tanking. I’ve been around the markets since the 1970s and have endured many crashes and busts. It never gets easy.
As Steve Forbes says, “Everyone is a disciplined, long term investor… until the market goes down!” (quoted in the “Maxims,” p. 134)
And consider this quote from Wendell Brock: “Nothing can make the spirit fly higher than finder a bargain when you’re the buyer. And nothing can make the spirit sink deeper than finding it later a whole lot cheaper.” (p. 35)
Regarding the coronavirus crisis, Sir Harry Schultz has wisely warned, “Never underestimate the size of a panic, nor the power of a politician.” (p. 112)
If you want a copy of the new 7th edition, go to www.skousenbooks.com, or call Harold at Ensign Publishing at 1-866-254-2057. You’ll be glad you did. The price is only $20 for the first copy and $10 for all additional copies (they make great gifts). If you buy a box of 32 copies, the price is only $300.
I know subscribers who have a copy on their nightstand. It is a good source of wisdom for everyone who is staying at home these days.
As Dennis Gartman says, “It’s amazing the wisdom one can gain from just one line in your book. I read it every day.”
You Nailed It!
President Trump Declared Last Sunday as a National Day of Prayer
“O ye of little faith!” — Matthew 6:30
After my own Christian church closed its Sunday services indefinitely to counter the spread of the coronavirus, I was pleased to see that the famous Crystal Cathedral (now called Christ’s Cathedral) in Garden Grove, California, was open to the public on Sunday for mass.
Attending Mass at Christ’s Cathedral in California
While it was originally built by Robert Schuller, it is now owned by the Catholic Church.
The reverend encouraged everyone to sit apart and we nodded rather than shook hands during the sign of peace. However, we were able to sing, worship and take communion together.
It was a perfect setting for March 15, the day President Trump had declared to be a National Day of Prayer. When President Zachary Taylor was faced with a cholera epidemic in 1849, he called on God to help by quoting 2 Chronicles 7:14:
“If my people, who are called by my name, will humble themselves and pray and seek my face and turn from their wicked ways, then I will hear from heaven, and I will forgive their sin and will heal their land.”
Good idea! Let’s pray for sunshine and warm weather, which are the best way to end the coronavirus epidemic once and for all.