USD/MXN Price Rips to All-Time High As Mexican Peso Collapses – Is the Dollar Over? – Perhaps the currency disaster in Mexico is the first of many things that will happen here. The plunge in the Mexican Peso has left the United States Government scrambling for another solution to balancing the dollar’s trade deficit.
Perhaps the worst part of this affair is that the dollar will lose its status as the “world’s reserve currency.” The question is how much further down the road that trend will go? Will it be the end of the American dream and people wondering if they will be lucky next time?
Ever since I joined the market three years ago, I have learned that there are no guarantees in life. Some unexpected occurrences may throw you off track, but this occurrence is nothing compared to what could happen. If a major catastrophe happens on Wall Street, or other major markets, there will be an entire new generation of investors born after that event. No one is talking about that today.
That is because they do not want to hear the prospect of a loss of the American dream for them. You will not hear anyone saying that Wall Street wiped out the American Dream. Yet, in a sense, the devastation of the turmoil in Mexico could be just the beginning of what could happen here.
The reality is that one of the reasons the Mexican peso fell was due to how much of a role that the U.S. Federal Reserve has had in determining the value of the Mexican currency. The larger the Federal Reserve has been in determining the strength of the Mexican peso, the weaker it has become.
This means that the world reserve currency has been “packaged” so that the value is up. This is called a “structured process.” To some, it might seem like a good thing, but to others, they see that as the beginning of the end of the American dream.
It also means that we are heading toward absolute parity with the Japanese Yen, which is currently the worst performing currency of the past several decades. If that were to happen, it would mean that we have once again reached the peak of the corporate derivative bubble and the housing bubble.
The point is that this is only the beginning of the ultimate collapse of these bubble mirage currencies. Why?
We are dealing with a bubble, but not one that is going to last forever. Let me explain. When the bottom falls out of any bubble, the price is “drop dead” as we all know.
When the bottom falls out of this mirage bubble, the value will drop and the value is going to skyrocket again in about two months. In fact, the devaluation of the Mexican Peso is already starting to accelerate, which is just another sign that this is a real bubble that will pop up sooner than we think.
It is going to repeat itself time again in the history of markets and currencies. Many feel that this is why we are seeing everything takes a turn for the worse.
What is happening with the Mexican Mirage Currencies is just the beginning of what is about to happen. Please consider all this and think on it.