Indeed, by the look of things, we are about to experience a wave of deflation… in years.
Let's first talk about the $USD.
The $USD has broken above initial resistance (bottom red line) and currently sits just below 95. This is a MAJOR problem for risk assets.
Now, some of you are no doubt asking "the $USD was at this exact same level in late 2017 and it wasn't a problem… what's changed?"
What's changed is that at that time the Fed was only withdrawing $USD to the tune of $10 billion per month or $120 billion per year. Today it is withdrawing liquidity at a rate of $30 billion per month of $360 per month… and it intends to raise this to $50 billion per month or $600 billion per year within the coming months.