More Dollars Than Rain Drops in the Sky
Some sounds you never forget…like the sound of rain in the desert.
Many years ago, I was on a mining project in Nevada when it began to rain. The raindrops made a unique sound as they fell from the sky, only to land in the deep grey dust that made up the road we had driven in on.
Then I noticed something else was happening around me.
The local contractors went from a steady pace to hyper-drive. They started behaving like mad ants – loading up their trucks and beelining for the paved highway.
It was confusing to me, having grown up “in the rain” in the Pacific North West. What was the big deal? A little rain is a good thing, isn’t it? The desert plants sure seemed to like it as they sprung to attention to capture this unexpected bounty from above.
We got in our truck and joined this odd caravan that was quickly making its way back to I-80, the four-lane paved interstate. All of us were driving much faster on the way out than on the way in. It was a bumpy ride.
How does this story end?
Even though it was just a few miles from the mining claims back to the highway, we “just made it out in time.”
The dusty road that wound through the low hills was now impassable. Dust had turned to mud. And that mud was deep enough to swallow truck tires.
Now it made sense to me: the local contractors knew what would happen to our only way back to the highway. So that explained why they were so eager to get the hell out of there.
I am starting to get this same feeling about the $USD.
When some financial commentator starts by quoting “hundreds of billions” and then seamlessly shifts to “trillions,” – it feels like that memorable day back in the desert when the first few raindrops hit the ground.
But where are the “local contractors”? You know, the ones who can see the storm on the horizon and take the necessary action to remain safe?
Are they in the bond market? Are they participating in equities? Real estate? Precious metals? Art?
I don’t have the answer – perhaps you do?
One thing is sure, as sure as a trader’s axiom: someone, somewhere, knows how to listen for the “sound of rain.”
Is this what it looks like on a graph?
Future “financial hurricanes” are on their way to make the Financial Crisis of 2008 seem like just a passing shower.
– John Top, the technical trader