Jeff Cooper: Trump, Greenspan, and Pre-Emptive Strikes

On August 11, Alan Greenspan was sworn in as Chairman of the Fed.

The market peaked 2 weeks later. Following a runaway move, Greenspan fired a pre-emptive strike against inflation fears by raising the Discount Rate by 50 basis points.

On Saturday, October 17, 1987, Treasury Secretary James Baker told the Germans to “either inflate your mark, or we'll devalue the dollar.”

On Sunday, October 18, Baker went on the Sunday morning talk shows where he said the U.S. “would not accept” the recent German interest rate increase.

Later, a Treasury official said we would “drive the dollar down” if necessary.

These were fighting words.

Fighting words in politics can panic the market.

Jimmy Rogers stated, “The crash had nothing to do with program trading or arbitrage or investment insurance.  Greenspan and Baker simply panicked and blew it.”

A look at a daily dollar from 1987 shows during the blow off in stocks in the summer of '87 the dollar made a lower high.

By early October it had snapped a double bottom and was in panic mode.

Recently, the dollar broke out last year above major double tops.

However, it is back below the breakout point and below the last swing low around 99 could panic.

It is possible the dollar has installed a big picture weekly Gann M A Top.

The other day, Peter Navarro, head of Trump's  Trade Council, not content with calling China a currency manipulator, indicted Germany for the same economic crime leading to the theft of American jobs.

Is history set to rhyme a cycle of 360 months from 1987?

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