Why do I stubbornly stay in my positions that are going against me?
Clearly over the past 5 months those positions have been a challenge to say the least.
I'll tell you why.
While everyone is looking at sanctions and tariffs and the Fed and going crazy buying the dollar on these themes they are missing out on what may be the biggest change to capital markets of all time. Easily the biggest change in the post WWII period and that is trading in oil with yuan.
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While everyone else is looking at little crumbs lying over there on the floor ("hey, let's buy the dollar because the Fed is raising rates," etc) they are missing out on the big, BIG, picture.
This is not a trade for 5 months. (Who cares what happens in 5 months???) This is a trade for the rest of your investing life. It's as if you went long the Japanese yen when it was fetching over 400 to the dollar back in 1971.
This is monumental. It's a blockbuster. Meanwhile, everyone is so minutely focused; so short-term focused on ridiculous things that they are missing out.
This is a game changer, an absolute game changer.
The headline above is one that I clipped out from a story back in March, when China first launching its contract.
But the contract has been up and running and it's been doing extremely well and it's been more active and more accepted than anyone imagined.
THAT is the reason for the fall in the yuan. More and more, investors, traders, commercial entities want yuan and the Chinese monetary system MUST supply those yuan. That's where the pressure is coming from. There's a natural tendency for it to fall AS A RESULT OF DEMAND.
I know that sounds counter-intuitive and illogical, but that's how fiat systems work. And while China's currency is not a free float, the pressure on the currency is coming from the world DEMANDING that it free float. They need it.
Once that happens--and it may not be far away--the dollar's long-term downtrend is cemented.
Play this right and it will be the biggest score of your lifetime.
