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U.S. Dollar Analysis Mid-April 2011: Cycles and Geocosmic
Written by Raymond Merriman   

The following is a reply (by myself, Raymond Merriman) to a question on the ISAR Financial Astrology ezine this week, concerning the possibility of a collapse in the U.S. Dollar. The writer specifically referred to my own writings on the subject, and hence my updated response on the subject. For more information on ISAR and its various ezine discussion boards, please go to www.isarasatrology.com.

My reply concerning the U.S. Dollar:

Dear Kathleen and others on this list:

Your questions, and the follow up by others is very pertinent today, from both an astrological point of view, but also a fundamental point of view.

Here’s how I see the next few years concerning the U.S. Dollar, by integrating the direction in which things seem to be going, combined with my understanding of the financial astrological signatures now unfolding, as of mid-April 2011.

You ask about the U.S. Dollar and the possibility of collapse, which I have been studying and writing about since 2008, and even more so in the past year. This idea was originally based purely on the transit of Pluto through early Capricorn, in opposition to the USA Venus and Jupiter, along with the transit of Uranus, now making the square to each. That’s four – out of a possible six - aspects that I think pertain to the possibility of bankruptcy in an entity’s chart, especially when the entity (nation, in this case) spends way more than it brings in. It is as simple as that. That is, under hard aspects from any far out planet like Uranus, Neptune, and Pluto (like a square or opposition) to one’s natal Venus, Jupiter, or second house ruler, represents a time when you are tempted greatly to spend a lot more than you make. It doesn’t mean you WILL go bankrupt, for if you are consciously able to successfully hold back spending when it exceeds what you bring in, you won’t go bankrupt. But conditions in life, and/or a pattern of excessive and uncontrollable spending, can quickly lead outflows to exceed one’s income, and that in turn leads to the possibility of bankruptcy.

Everyone in the astrological community is aware that we don’t agree on what the second house ruler is in the USA chart, because we don’t have a recorded time. Hence there is not a consensus on any one of the numerous times (or even dates) that have been proposed for the USA birth. So that leave only six possibilities (times or groupings of hard aspects from transiting Uranus, Neptune, or Pluto to the country’s natal Venus or Jupiter), when the USA might be most prone to bankruptcy if it spends much more than it brings in. Four of those six possibilities are present 2008-2013 (Pluto in opposition to USA Venus and Jupiter, and now Uranus squares the USA Venus and Jupiter), as discussed since the Forecast 2008 Book. And the last time I looked, the USA government (and indeed much of Europe too) was still spending way more than it was bringing in, and the national debt is increasing at an alarming rate (I don’t mean to be alarmist, but… I feel alarmed, and the need to think of “what if?”).

But this problem of debt (spending far exceeding revenue) doesn’t even end in 2008-2013. Next up is Uranus in waxing square to Pluto, 2012-2015, which refers to the possibility of an even greater explosion in world debt. To me, this could be a time that the world’s approach or valuation of currencies is changed. That Uranus-Pluto square in Aries-Capricorn makes a grand square to USA Sun-Saturn square at 11-14 degrees of Cancer-Libra. So, the USA’s status in the world (superpower? international reserve currency unit?) could be altered significantly during that time, and it is related to the global issue of debt. That dynamic, at that time, might change our status, or that of our currency, as the standard international currency, based on aspects to the USA chart. It might also change the status of the Euro currency, based on its chart (Jan 1, 1999, 12:01 am, Frankfurt, Germany, via records from Irma Schogt of Netherlands).

Those original forecasts of a collapse of the US Dollar were based purely on these astrological aspects as identified in 2008, and even as far back as the Forecast 1994 Book. And of course, it seems like the USA Dollar is headed in that direction, as prices have been mostly depressed ever since 2008.

But now from a cycles’ point of view, I see a completely opposite possibility. The Dollar has a 16.5-year cycle against the Japanese Yen (and other currencies too), measured from trough to trough (that’s how cycles are measured). That last all-time low was in April 1995, which is – guess what? – 16 years ago. The Dollar-Yen fell to 79.75 then. These cycles have a range of 1/6 of its mean length, so that means anytime between 2008-2014 this cycle low could return. 2011 happens to be right in the middle of that time frame.

But that can be narrowed down because the 16.5-year cycle (trough to trough) sub- divides into three 5.5-year cycles, with an orb of 11 months. Since the start of this third and last 5.5-year cycle phase started with the 101.65 low of January 2005, it is next due July 2010, +/- 11 months. With further cycle refinements, it actually comes out to July 2009-June 2011 as the ideal time form the 5.5- and 16.5-year cycles overlapping. On March 17, 2011, the Dollar fell to a new all-time low against the Yen. It broke 79.75 that day, falling to the new all-time low at 76.25. Already it has soared back above 85.54 on April 7, its highest level in months. That’s a 12+% gain in less than a month, and that’s huge for any currency! It is the kind of move that often happens at the start of new long-term cycles. It suggests that March 17 was the low of those two long-term cycles, although the time band is still in effect for that final low. If so, the Dollar could be up 2-5 years at least. And that is right in the 2012-2015 time band of Uranus square Pluto, which – given its aspects to the USA chart – holds the possibility of a collapse of the Dollar (or something else within the government). You see the problem?

What this tells me is 1) either the dollar is bottoming now and will indeed gain strength into 2012-2015 per the normal cycle picture, and the dollar won’t be downgraded from its status of the standard international currency. World leaders just won’t do that if the Dollar is gaining in strength, unless it suddenly gets too strong (also a possibility). What if it means the Euro collapses against the Dollar in 2012-2015? Will investors flock to US Dollar as king again, as a safe haven against the collapsing Euro currency, or even Yen? Or, 2) if the dollar continues making lows into 2012, and especially into 2014 (when the second Cardinal Climax of 2008-2015 unfolds on April 22 of that year), it is getting outside the 5.5-year cycle time band, which increases the possibility that it is not a reversal to the upside for the Dollar, but instead a collapse of the Dollar currency and hence the end to its cycle, and maybe even its very existence. Uranus and Pluto, as discussed first, could indeed correlate with that outlook. But really, the collapse in 2012-2015 could be any major world currency. It’s just that the Uranus-Pluto square is such a heavy aspect, and the biggest blow would be if it involved the US Dollar more than Euro, since Dollar IS the standard international currency. That kind of possibility does relate to the symbolism and rarity of the planets involved.

Yet, I can’t ignore the cycles, and the possibility it could also mean a sudden strength in the Dollar into 2012-2015, especially as everyone is expecting the collapse scenario, given the Fed’s soft dollar policies and the lack of any new policies concerning the reduction of USA debt. But, a rising Dollar would imply rising interest rates, which would imply a dicey stock and bond market, and at least temporarily, a sharp decline in commodity prices, like Gold and Silver. It could manifest that way as well under Uranus square Pluto. The point is that under Uranus square Pluto, whichever way it goes will likely not be orderly, and in fact could cause extreme chaos and market price fluctuations.

My position following the decline into March 17 of the Dollar? Consider buying any corrective declines in the Dollar – or even new lows – while Jupiter is still in Aries, and that 5.5-year cycle low in the Dollar-Yen is due to end by June 2011. If the Dollar continues making new lows after June 2011, hedge or possibly reverse that position.

How to trade a rising Dollar? You can buy a Dollar ETF (UUP), or a short (or double short) Euro ETF (EUO and DRR), or also a short Yen ETF (YCS), and even the ETF on the Chinese Renminbi (Yuan, symbol CYB). Every time the dollar pulls back and challenges that low of March, or even makes a corrective 38-62% decline back down towards it, one could consider buying. But how much to buy has to be determined by how much risk one can comfortably bear. You don’t want to put your life style at risk, although under these aspects, all of our life styles may be at risk anyway.

By the way, if anyone chooses to trade on this idea of a rising dollar instead of a collapsing dollar, you are totally and wholly responsible for your decisions. This is not a formal recommendation for everyone. No one on this list, or the list itself, is responsible for any one’s decisions to buy or sell anything in markets. Just keep in mind that investors are always most bearish a commodity or currency or stock when it is at its all-time low. And when the majority thinks one way, it is always wise to start asking yourself: what if they are wrong? What would be the consequences of that? Because at the bottom or top, most people (the consensus) are wrong.