Yesterday, I saw the CEOs of our major banks with President Trump.
These are mostly the same guys we bailed out in 2008 and are doing again right now with the REPO operations that are growing at an alarming pace.
Of course, they assured us that this is not a financial crisis- which to me means that it most likely is because they are assuring us that it is not and they are well- capitalized. If there were no crisis there would be no need to assure us that there is not one. Buyer beware! The fact that they need $175 billion per day to keep this illusion alive- oh wait! They got more than $175 billion today and the “markets” are crashing anyway. This with the ECB announcing more QE (More fake money buying real assets) and the Fed opening the monetary spigots WIDE. Let’s not forget about the $60 billion per month not QE either. Most other central banks are either flat-out buying stocks, bonds and who knows what else and are reducing rates also. It appears there is coordinated action that just happens to be failing.
It appears we are in a situation where the “markets” will continue to fall until they reach a place where real buyers come in. My guess is at far lower levels than where we are right now. Remember stocks appear cheap to many because they have fallen so hard. The fact s that they should NEVER have been where they were to start with. As I have said a hundred times- it was all fake.
The companies that were repurchasing their stocks to keep their share prices and executive bonuses high have been shut out recently because of funding problems (lack of credit).
Is there anyone out there who seriously believes we went from “the greatest economy of all time” just a month ago to the situation we are witnessing right now? This has been happening for 18 months as I have been pointing out in these articles and by simply reading the economic reports that get buried on the financial game shows.
I believe all of the financial game shows should be ashamed of themselves for burying the true numbers and reporting stories that fit their narrative and those of their sponsors. The political channels are as culpable as the financial ones. What a joke!
Once again the “markets” are proving that it IS NOT different this time. I have asked numerous times where was the Fed in 2008 and in 2000-2003 for those who would crow “the Fed has our backs!”. I’ll ask again- where are they now?
The sad part of all this is that nobody wanted to listen to my and many others warnings- until now when a massive amount of damage has been done in a record short amount of time.
Gold has held up well until the last week or so. I expect that this has to do with margin calls and a stronger (likely short-lived) US dollar. My expectation is that after this washout completes itself the metals will rise substantially. I also believe that the washout in stocks is a gift for anyone wanting to buy the gold and silver miners. To me, this is a great buy at this time because the prices of what they produce (mainly gold) have been firm and the input costs (mainly oil) have fallen dramatically. This should be a positive when the earnings reports start coming out in April. Anyone with the foresight to see this may be able to pick up some real bargains very shortly.
I also believe that gold and silver both will have strong rallies that will dwarf any rebounds in the stock market going forward.
While this is obviously an unsettling time it is also a time when true bargains will become available. If the current pace of decline keeps up those bargains may appear sooner than we may have expected.
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