By Justin Spittler, editor, Casey Daily Dispatch

“That can’t be right,” I thought. “That’s way more money than I spent last month.”

I ran the numbers again. Same answer.

This was my experience in Tulum, Mexico last week. I was trying to figure out how much it would cost to rent an apartment.

You see, I’ve been living in Tulum since the end of December. I came here to escape the winter, unearth investment opportunities, and, yes, save money.

That’s because it’s much cheaper to live in Mexico than the United States. Last month, I got a sweet deal on a nice apartment down here.

In a few days, I’ll move into an even nicer apartment. And the realtor for this property is asking the same price in pesos. So, I thought I’d be paying around the same price in dollars.

But I was shocked at how much more expensive it’s going to be. At first, I couldn’t figure out why. Then, the answer came to me…

• The U.S. dollar has been obliterated this year…

Just look at this chart…

The dollar has lost 4% of its value against the peso this year. That’s why it’s suddenly much more expensive to rent an apartment in Mexico.

Of course, I didn’t write this essay to get you to feel sorry for me.

I wrote it because my experience illustrates just how much the dollar has weakened… and not just against the peso.

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• The dollar has weakened against just about every major currency this year…

It’s down 5% against the euro… 5% against the Swiss franc… and 3% against the Japanese yen.

If you’re an American, this is a problem. It means the money in your wallet doesn’t go as far.

Unfortunately, I don’t see this trend changing course anytime soon. To understand why, look at this chart:

You can see that the dollar has been in a downtrend since the start of 2017. And, as Doug Casey likes to say, a trend in motion tends to stay in motion.

More importantly, the dollar just broke through major support. This suggests that it’ll likely keep falling.

And I’m not the only analyst who’s turned bearish on the U.S. dollar.

• 13D Research is calling for a weak dollar, too…

Most people haven’t heard of 13D Research. But it’s one of the world’s best institutional research firms. They offer some of the best research money can buy.

Most of this information is only available to paid subscribers. But they occasionally share insights with the public.

Two weeks ago, they published an eye-opening piece on the U.S. dollar. I consider this essay required reading, so be sure to read it here.

But the most important point is that 13D thinks the dollar’s in the early innings of a major downturn…

This month’s price action is the beginning of the next down-leg for the dollar and we believe its bear market could last as long as seven years… In the years ahead, the appreciation in other currencies versus the USD could be far greater than anyone currently imagines.

You read that right. The U.S. dollar could be stuck in this downturn until 2025.

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• You cannot afford to ignore this…

That’s because the dollar is the world’s most important currency. When it makes a big move, every other financial asset feels it, too.

But don’t just take my word for it. Here’s what 13D had to say:

A weak dollar has tremendous implications for almost every asset class, particularly because of the huge amount of capital concentration in U.S. dollar assets and the relentless bullishness that caught so many by surprise.

In short, most investors aren’t ready for a weak dollar. They own too many U.S. stocks and bonds.

That’s a problem according to 13D, which sees major “excesses” in the stock market. The firm also recently warned that U.S. Treasury bonds could be “on the verge of a breakdown from a large topping-pattern.”

• In short, it’s time for investors to take precautions…

And that’s because the U.S. bond market is already flashing danger.

Just look at this chart of the iShares 20+ Year Treasury Bond ETF (TLT). This fund tracks the performance of U.S. Treasury bonds with maturities greater than 20 years.

You can see TLT recently rolled over. It’s now down 4% since the start of the year.

• U.S. stocks are also looking weak…

Just look at this chart of the S&P 500…

You can see it’s down 6% over the last four days. It’s now back to where it was at the start of the year.

• Now, it’s too early to say if these drops will continue…

But stocks and bonds could be in serious trouble if the dollar continues to slide.

So take precautions if you haven’t already. The first thing you should do is take some chips off the table.

Once you’ve done that, consider using your profits to buy physical gold. As Casey Research readers know, gold’s the ultimate safe-haven asset. It’s survived every financial crisis throughout history.

Because of this, many investors take shelter in gold when stocks and bonds run into trouble.

Gold’s also an inflation hedge. It tends to gain value when the dollar loses value.

In short, there are many reasons to own gold right now. So consider adding some to your portfolio today.


Justin Spittler
Tulum, Mexico
February 6, 2018

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Reader Mailbag

Today, a reader responds to our recent essays on the electric vehicle (EV) revolution (catch up here and here): 

Yes, it's true that EVs will use a lot of copper, but that same copper will be used over and over again, since most cars and trucks get recycled. Most new cars use less copper than those of years ago due to advanced systems to control various systems in a car or truck. The taillights, for instance, had to be connected to a switch on the dashboard with fairly heavy wire to handle the current in previous days. Now there is just a single heavy wire from the lighting circuit and a much smaller signal wire that tells the various lights what to do.

Another factor is the use of LEDs, which use a lot less current and hence much smaller wire. Because of the cost of copper, the auto manufacturers have been on this case for many years, and the improvements they have made are significant. My guess is that this process will continue. Some of the heavier circuits in the drive train of EVs may even use aluminum.


Share your thoughts on the EV revolution—and how you’re planning on profiting from this megatrend—right here.