The year was 2007.
The world’s richest model, Gisele, decided that she was going to refuse to get her paychecks in dollars and demanded to be paid in euros. That was in November of that year.
Roughly, a week later, Jay-Z appeared in one of his rap videos … flashing euros (instead of dollars).
Wall Street has a saying.
“When the taxi-cab drivers and shoe-shine boys start talking about buying stocks, it’s time to get out.”
History teaches us that things don’t usually change … only the names and faces change.
Well, it’s 2010 and the story unfolds again — with a different name and face.
This time, it’s Bryan “Birdman” Williams and Ronald “Slim” Williams.
These are the two brothers who founded the Cash Money Records music label that produces rappers like Lil’ Wayne and others.
These guys have decided to get into the oil business.
In fact, Bryan has been spotted with an oil well tattoo on his shaved head along with a Web address on the back of his head.
When something gets to a point like this, it’s almost always a sign of a top.
In this case, it's oil.
Because almost everyone’s bought in by that point!
So, when you see something on the cover of Time magazine, or on the front of The Economist ... a top is usually near too.
But this time, it’s rappers entering the oil industry instead.
Now, what does this have to do with currencies?
Many commodities are greatly affected by commodities.
For instance, the Canadian dollar and oil are highly correlated.
It’s because Canada is a major exporter of oil to the world.
In fact, they supply the United States with more of their oil than any other nation. (I know many people think it’s Saudi Arabia, but it’s not).
On the flip side of the coin, the U.S. dollar is very inversely correlated to oil.
It’s because oil is denominated in dollars and it tends to keep those on the other side of the equation from each other.
Therefore, I pay great attention when rappers, models and others that are “far removed” from our industry when they make a bold statement that they are getting into the financial markets.
Historically, they couldn’t have gotten in at worse times.
That’s why I’ll be watching oil much closer than I even did before.
If oil tops out for now, I’ll be bullish on the dollar and bearish on the Canadian dollar.
Now, don’t get me wrong.
In the long run, the U.S. dollar is toast.
However, even bear markets have their rallies and right now we happen to be in one of them as oil is correcting downward.
If the uptrend in oil breaks, then I’ll be even more bullish on the buck in the medium term.
However, over the upcoming 3 to 5 years, or more, the dollar will be lower than it is today and even lower 10 years from then.
It’s because our Federal Reserve and Treasury Department will continue to undermine our currency by printing way too much of it.
That’s why in the long run you need to take a look at foreign currencies.
That way, your wealth doesn’t have to get “watered down” like everyone else’s wealth in America.
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