In this update we are going to consider why the US dollar appears to be strengthening, both fundamentally and technically.
First, the fundamentals. The Empire, meaning the US, Israel and Britain and to a lesser extent their vassal States such as Australia, most of Europe, the GCC countries, Japan and South Korea etc are moving aggressively to assert global dominance, in large part to shore up the petrodollar system. The Empire is “streets ahead” of its superpower rivals China and Russia in terms of intelligence and its long-term geopolitical and strategic thinking. The Empire felt threatened by the rise of the BRICS and the meteoric rise of China to the point that it was becoming a serious rival. So it correctly identified China’s 2 major points of weakness – one being that its economy was heavily dependent on Mid-East oil – before the Iran – US war it was receiving around 50% of its oil from the Mid-East with 12 – 15% coming from Iran. The other point of weakness was that China’s economy was heavily export dependent. So the Empire moved to take down China by disrupting global supply chains with the Covid plandemic (which had various other objectives) and then imposed heavy tariffs on China to sabotage its export-based economy, this goal being thinly disguised by tariffs being imposed on everybody. If you want to see the results of this, watch this video showing that most Chinese youth have ended up on the scrap heap, despite many being in the prime of life and highly educated. The war against Iran served to choke off a large proportion of China’s oil supplies and as an added bonus provided the perfect opportunity to bomb the Belt and Road infrastructure that China had built in Iran, especially the railways and rail bridges.
A key point to appreciate when considering The Empire is that its great intelligence is equalled by its utter ruthlessness in pursuit of its objectives. The Empire has no concept of “the common good” and acts solely in furtherance of its own interests. Thus, if it thinks it can gain a relative advantage by tearing down and destroying what it views as its rivals, that is what it will do. A classic example of this is the way that Israel seeks to physically destroy or subjugate all of its neighbors using American taxpayers money in pursuit of its goal of eventually dominating the Mid-East.
Thus, the major war that The Empire is fomenting between Europe and Russia serves various purposes. It will eliminate Europe as a potential rival power bloc as it is already being weakened and may eventually be destroyed as a result of this war. The war also serves to deplete Russia, the intention being to eventually take it over to plunder its rich resources. Europe’s political class are clearly acting against the interests of their populations which is because they are already in the pockets of The Empire either due to massive bribes or because Epstein has something on them, or both. This is why they stood back and said nothing when the Nordstream pipline was sabotaged and have since been attacking Russia through the Ukraine proxy. The weak Russian response to the latest destructive drone attacks will invite more of the same. A great bonus for The Empire is that, as a result of the increasing instability of Europe and the growing risk of Exchange controls being implemented, capital is already fleeing Europe for the US which is seen as safer. This is an important factor bolstering the dollar. Other “benefits” of wars in Europe and the Mid-East are that the Military – Industrial complex can use them both to aggrandize itself and take a much bigger slice of the economic pie, affording huge kickback bonuses to the politicians and others who facilitate this process, and old defunct parasitic organisations like NATO can be rejuvenated at public expense.
Meanwhile, The Empire is moving to gain a stranglehold on the global oil market. Over the past decade or more the most important country of The Empire, in terms of its geographic size, the US, has increased its oil production capacity to the point that it is one of the biggest oil producers in the world, and it has just moved to bring Venezuelan oil under its control. This means that it can become dominant relative to the rest of the world, by destroying oil production capacity elsewhere in order to force the rest of the world to come grovelling to it “cap in hand” to secure oil supplies at whatever price The Empire decides it will sell it to them. The ways of going about this are simple – attack Iran to get it to block the Strait of Hormuz, reducing global oil supplies by about 20%, get Ukraine to attack Russian oil production capacity to close down as much of it as possible and set fire to and burn down oil production facilities all over the world to shut down supply – about 50 such installations have been subject to mysterious explosions and fires over the past year or two, and lastly, if they choose to play their Ace card, goad Iran into attacking the desalination plants across the Gulf region thus rendering the Gulf States uninhabitable, which will shut down Gulf production completely – the Empire is probably unconcerned about the fate of the Gulf Sheiks who they may feel have served their purpose and have been pampered and indulged for long enough. This will send the oil price through the roof, leading to bumper profits for US producers, in which case the US consumer may require to be shielded from higher prices by heavy subsidies in order to avoid insurrection. The mass starvation elsewhere resulting from higher oil prices and acute fertiliser price hikes and shortages will have the added bonus of greatly reducing most of the world population who are regarded by The Empire as a superfluous waste of space, especially given the rise of the robots and AI. The Empire will then adopt an “island mentality”, the island of course including the whole of Central and South America and any leaders within the Americas who do not play along will be eliminated – now here’s is a presidential candidate who stands an excellent chance of winning through with his credentials. The UK will presumably continue to be an “honorary member” from afar. These developments will assure continued dollar dominance with the petrodollar being bolstered more by American oil production and reserves rather than those in the Mid-East.
It remains to be seen whether The Empire will succeed in fully implementing these grand plans but so far, in accordance with their cold logic, things seem to be going their way, as is suggested by the action in the dollar. If things go badly wrong and blame needs to be apportioned, in many ways Trump will be the perfect “Fall Guy” because he can be declared unhinged or senile or both and he probably won’t mind as he either won’t be around or may be too old to care and in the meantime he gets to play the role of King and do things like make garish adornments to The White House and call the Iranians “scum”.
If you have read and understand the above you will at once grasp The Big Picture of what is going on the world and also understand why the dollar is gathering strength at this time as we will now proceed to see on the charts.
Starting with the 2-year chart for the dollar index we can see at once how it recently broke out from a large Double Bottom base pattern that has been forming foro ver a year, a development that we spotted at the time. There is some residual resistance at the May 2025 high at about 101.8 which is what brought the advance last month to a stop, as well as it being overbought at that time, but overall the dollar index chart now looks positive with almost all of the resistance at the upper boundary of the base pattern having been overcome and it is expected to clear this minor resistance on the next upleg. Observe also on this chart how the peaks in gold and silver late in January synchronized with the low in the dollar index. Note that a rising dollar going forward won’t necessarily stop gold and silver bottoming and starting higher, because of the ongoing massive money creation required to maintain liquidity in the face of the deficit at $40 trillion and continuing to rapidly expand.
The 6-month chart shows an established uptrend in the dollar that is accelerating, especially with last month’s breakout move. Following that move a neat bull Flag appears to have formed that is expected to lead to another significant upleg soon. This could well be what triggers a further drop by gold and silver to our downside targets at about $3500 and the high $40’s respectively.
End of update.
Posted at 11.25 am EDT on 10th July 26.
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