Investors should take every precaution right now to protect their money from a major market disaster that will destroy the economy and impoverish millions of Americans.

That’s according to legendary investor Jim Rogers, who delivered his frightening warning recently on Yahoo! Finance.

Rogers believes we’re heading for a massive collapse of the dollar which will cause interest rates to soar to record levels. He warned investors should stay clear of the dollar and other fiat currencies.

“There is no sound currency anymore, “Rogers stated.

“There’s no paper money in 2014 and 2015 that’s going to be worth much of anything,” he added.

According to Bloomberg, the U.S. dollar has indeed reached a startling two-year low – its weakest since November 2011 – with consumer confidence dropping like a rock.

And the U.S. dollar has lost 38.5% of its value since 2002.

“For the first time in recorded history we have all major banks and central governments around the world printing huge amounts of money,” Rogers said. “This has never happened in world history and so the world is floating on an artificial ocean… of lots and lots of printed money,” said Rogers.

Rogers noted that the situation will only get worse if the government continues to “kick the can down the road.”

“When the can goes over the road, we’re all going to go with it,” he said.

“The debt is going higher and higher. The money printing is going higher and higher.  We’ve had 50 or 60 years of success in America,” he said. “You’ve got to pay the price someday whether you like it or not. The longer you delay the day of reckoning, the worse the day of reckoning is going to be.  This is not going to be fun.”

He added that the problems will not be solved with the Federal Reserve intact.

“Abolish the Federal Reserve,” Rogers stated. “The world has gotten along quite famously and well without central banks for most of world history.”

“America has had three central banks in our history, the first two disappeared,” he said. “This one’s going to disappear too because they keep taking on huge amounts of debt… they keep leveraging up the balance sheet… they keep making mistake after mistake… they’re printing money, it’s going to self-destruct before it’s over.”

He argued, “We’d be better off with no central bank than this central bank.”

Finally, Rogers predicted that Americans will soon abandon the dollar for an alternative currency.

“Maybe it will be Bitcoins,” Rogers predicted referring to the digital currency that’s been taking the world by storm.

While the dollar continues to lose value, this alternative currency has skyrocketed in popularity…and value.

Just a year ago it was trading under $20. Yet its price recently topped $1,200 for a single Bitcoin, turning many smart investors into instant millionaires.

Bitcoin has become so popular that Congress recently held hearings to determine if they were safe and legitimate.

They voted resoundingly YES.  Ron Paul, the senior U.S. Representative from Texas, said, “Bitcoins are fantastic.”

Microsoft founder Bill Gates called Bitcoin a “Techno-tour-de-force.”

And Google executive chairman Eric Schmidt said point blank: “It’s changing society.”

The White House has also taken notice.

In October, President Obama summoned Google CEO Schmidt to the Oval Office and asked him if Bitcoin was “something he has to worry about.” Attending this meeting was an advisor to the Secretary of State, a Director of the International Crisis Group, and the Vice President of the Council on Foreign Relations.

They discussed this new form of money and how they believed it was “changing society.”

And judging from what is taking place in America and all over the world that is exactly what’s happening.

Is Bitcoin The Ultimate Solution To America’s Currency Crisis?

Already, 200,000 companies in the United States can currently pay their employees with it, while 700,000 American businesses accept them as payment, including Walmart, CVS, Lowe’s, and NIKE.

You can use Bitcoin to buy gold & silver…. Or even Domino’s pizza and have it delivered.

In Texas, a man who recently converted 1,200 U.S. dollars into this new money because of its rapid rise in value, turned around and bought a Porsche with it.

In New York, a luxurious condo in the exclusive, Trump Soho complex was recently listed for $1.9 million.  But you couldn’t pay for it with dollars, a check or wire transfer.  The seller would only accept Bitcoin.

In France, you can have your salary paid in it, in Finland, dentists will accept payment in it. And in New Zealand, one company will even let you pay for a private flight to outer space with Bitcoin.

It’s seems to be creating a new, international monetary system that some economists believe could solve all the problems we face with fiat currencies – including the kind of devastating collapse predicted by Jim Rogers.

Something Like This Has Never Happened Before in History

The founders and financial backers of Facebook, Skype, Yahoo…Major players in natural gas and oil…As well as with AT&T and Fidelity… are all moving into Bitcoin.

Some eBay auctions are now being held in it.  MoneyGram is using it to facilitate millions upon millions of dollars’ worth of financial transactions.

Western Union is beginning to assess the technology necessary to harness it. 

The central bank driver world macro structure is in full can-kicking mode. The fuels that have built up are almost too numerous to mention, though some issues continue to be recycled as if they were needed to explain the latest potential spark.

The New Boss Same as the Old Boss

Janet Yellen was on tap this week to lead her first official open market committee meeting as Fed Chairwoman. The perception of Fed confidence is crucial at this time in particular. In light of the recent policy tapering and the recent volatility in the emerging markets, her script will be watched carefully by all.

In terms of emerging or developing markets, the volatility has been intense, to say the very least. Argentina has defaulted once again on its sovereign obligations, devalued its currency, and caused a painful split between the official and street value of its currency.

For precious metals investors, the lesson from the Argentinian currency discrepancy foreshadows the likely future of precious metals valuation as the physical or street value divorces from the official paper price.

Middle Eastern Europa

We have also seen massive undertakings in Forex, most notably the shock overnight in the revaluing of the Turkish Lira. While the Lira may be a small market relative to the U.S. dollar, it lies central, almost as a mini reserve active in the Middle East and, of course, immediately adjacent to Europe.

Not to mention the recent recommendation out of the Bundesbank that European peripheral sovereigns should be expected to bail in themselves on the backs of its citizens. The Cyprus bail in template is being applied in lieu of the politically unacceptable austerity tourniquet.

In the U.S.

The debt ceiling redux is back and will once again pit U.S. policy makers up against the Federal Reserve. Although the two entities are connected politically, they must maintain the appearance that they are not. We should look for jawboning from the Fed, which in turn could offer some support to gauging confidence for the new Fed Chair.

….read page 2 HERE

Earlier this week, the U.S. currency erased some losses against the euro, yen and Swiss franc. However, the greenback moved lower against the British after data showed that construction output in the U.K. rose at the fastest rate since August 2007 in January, suggesting that the economic recovery is continuing. The U.S. dollar also declined against its Australian counterpart after the Reserve Bank of Australia left rates on hold at 2.5%. What impact did these numbers have on major currency pairs? If you want to know our take on this question, we invite you to read the following part of this Forex Trading Alert.

In our opinion the following forex trading positions are justified – summary:

• EUR/USD: none
• GBP/USD: none
• USD/JPY: none
• USD/CAD: none
• USD/CHF: none
• AUD/USD: long (stop-loss order: 0.8728 and an upside target: slightly below 0.9075)

EUR/USD

Looking at the above chart, we see that the situation hasn’t changed much as EUR/USD remains slightly below yesterday’s high. As you see on the daily chart, recent days have formed a consolidation (marked with blue). From this perspective, it seems that as long as the pair is trading in this area, further gains and declines seem limited. Please note that the lower border of this formation is reinforced by 70.7% Fibonacci retracement level and the 200-day moving average. Additionally, the CCI and Stochastic Oscillator generated buy signals, which will likely trigger an upward move (and a breakout above the upper line of the consolidation range) in the coming day (or days).

• Very short-term outlook: mixed with bullish bias
• Short-term outlook: mixed 
• MT outlook: mixed 
• LT outlook: bearish

Trading position (short-term): In our opinion no positions are justified from the risk/reward perspective. 

GBP/USD

Quoting our last Forex Trading Alert:

(…)  the breakdown below the lower border of the rising wedge, (…) triggered a sharp decline that took GBP/USD to its first downside target. (…) If this support level (…)  is broken, we will see further deterioration and the next target for the sellers will be the long-term declining support line (marked with red). (…) Please note that the latter (bearish case) is reinforced by the position of the indicators.

On the above chart, we see that GBP/USD reached its next downside target – the long-term declining support line (marked with red) and rebounded earlier today. If this strong support line encourages the buyers to push the order button, we will likely see a corrective upswing and the first upside target will be yesterday’s high. However, if it is broken, we will see further deterioration and the next target for the sellers will be around 1.5985 where the price target for the breakdown below the lower border of the rising wedge is. Such price action might make us consider opening short positions. Nevertheless, taking into account the position of the indicators (which are oversold), it seems that the first scenario is more likely in the coming day (or days).

• Very short-term outlook: bearish
• Short-term outlook: mixed with bearish bias
• MT outlook: mixed
• LT outlook: mixed

Trading position (short-term): In our opinion no positions are justified from the risk/reward perspective.

USD/JPY

In our last Forex Trading Alert, we wrote:

(…) the pair broke below the January low and almost reached the 50% Fibonacci retracement level. (…) USD/JPY also reached the declining support line (marked with green) based on recent lows. If this support zone encourages buyers, we may see a corrective upswing. 

As you see on the above chart, we noticed such price action earlier today. USD/JPY rebounded after two small drops below the support zone. Despite this drop, the buyers didn’t give up and managed to push the exchange rate higher. Please note that, the CCI and Stochastic Oscillator are close to generating buy signals, which is a positive signal. Nevertheless, we should keep in mind that the pair remains below the previous lows and the size of an upward correction is still quite small. Therefore, it seems justified to wait for further improvement (for instance a comeback above the previous low) before opening long positions.

• Very short-term outlook: bearish
• Short-term outlook: mixed with bearish bias
• MT outlook: bullish
• LT outlook: bearish

Trading position (short-term): In our opinion no positions are justified from the risk/reward perspective. 

USD/CAD

On the above chart, we see that the situation has deteriorated slightly as USD/CAD declined below the upper line of the rising trend channel once again. As you see on the daily chart, we saw similar price action yesterday, but the pair quickly invalidated the breakdown. Although this was a positive sign, as it turned out earlier today, the improvement was only temporary. From this perspective, what we wrote in our last Forex Trading Alert remains up-to-date.

 (…) the breakdown is not confirmed at the moment. It seems that if the pair closes the day below this strong support line, we will likely see further deterioration and the first downside target for the sellers will be around 1.0952 where the Jan.22 low is. On the other hand, if the buyers managed to push the exchange rate above this line once again, we may see an upswing to Friday’s high. Nevertheless, taking into account sell signals generated by the indicators it seems that the first scenario is more likely. 

• Very short-term outlook: mixed with bearish bias
• Short-term outlook: bullish
• MT outlook: bullish
• LT outlook: bearish

Trading position (short-term): In our opinion, if the pair closes the day below the upper line of the rising trend channel and declines below the Jan. 27 low at 1.1030, we might consider going short. 

USD/CHF

Looking at the above chart, we see that the situation hasn’t changed much as USD/CHF remains in a consolidation range (marked with blue) slightly below the upper line of the trend channel. From this perspective, what we wrote in our last Forex Trading Alert is still up-to-date also today.

(..) an invalidation of the breakout above this support/resistance line is a bearish signal – especially when we factor in the position of the Stochastic Oscillator, which generated a sell signal (…) it seems that further deterioration is just around the corner, and the downside target for the sellers would be the lower border of the trend channel, which intersects with the previously-broken short-term support/resistance line (marked with dark blue) at the moment.

• Very short-term outlook: mixed with bearish bias
• Short-term outlook: mixed
• MT outlook: bearish
• LT outlook: bearish

Trading position (short-term): In our opinion no positions are justified from the risk/reward perspective. 

AUD/USD

Quoting our last Forex Trading Alert:

(…) in our opinion, the first signal of an improvement will be a breakout above the short-term declining resistance line based on the Oct.23 and Jan.13 highs (marked with dark blue) and an increase above the very short-term blue rising resistance line.

As you see on the above chart, we see that AUD/USD rebounded sharply and broke not only above the resistance zone created by December lows and the Jan.22 high, but also above the 23.6% Fibonacci retracement level (based on the entire Oct.-Jan. decline) and the short-term declining resistance line. This is a strong bullish signal. Please note that with this upswing, the pair reached the very short-term blue rising resistance line. If it is broken, we will likely see further improvement and the next upside target will be the 38.2% Fibonacci retracement level, which corresponds to the Jan. 13 high. Looking at the position of the indicators, we see that they still support the bullish case.

• Very short-term outlook: bullish
• Short-term outlook: mixed with bullish bias
• MT outlook: bearish
• LT outlook: bearish

Trading position (short-term): In our opinion, opening long positions is a good idea: stop-loss order: 0.8728 and an upside target: slightly below 0.9075. The above is not an investment / trading advice and please note that trading (especially using leveraged instruments such as futures or on the Forex market) involves risk.

Thank you.

Nadia Simmons

Forex & Oil Trading Strategist

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Disclaimer

All essays, research and information found above represent analyses and opinions of Nadia Simmons and Sunshine Profits’ associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Nadia Simmons and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Nadia Simmons is not a Registered Securities Advisor. By reading Nadia Simmons’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Nadia Simmons, Sunshine Profits’ employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.