Many of you are aware that the Fed met yesterday and left rates unchanged. Basically, the only difference from the December meeting was that Fed said the consumer is not quite as strong as expected and the REPO operations will continue until “AT LEAST” April. I’ll bet in April it will be until at least… to not give away the likelihood they can never stop.
In the meantime, as the American public is distracted by the impeachment attempt and the tragedy of Kobe Bryant, the Fed, according to Wall Street on Parade, is now up to $6.6 trillion to the banks since September. This is a faster pace than we saw during the collapse of 2008. But don’t worry- nothing to see here! One thing to watch is that the stock markets seem to be running out of steam even with the unprecedented stimulus. When will too much be not enough?
My opinion is that the impeachment and other news is MEANT to keep our eyes off of news that is really important and may affect our living conditions. Where is the reporting on homelessness? Where is the reporting of natural disasters from volcanoes to earthquakes to dying insects across the globe? Where is any REAL investigation of anything ever done?
In seeing the tape where our former Vice President boasts about bullying Ukraine, how long do you think you or I would be free? If we owed millions to the IRS like a famous MSNBC host- how long before the IRS would be making an example of you? If the evidence against a multitude of these insiders existed on ANY of us we would have been tried, convicted and who knows what else LONG ago.
I believe this is a show meant to distract and divide the population because those in charge know what is coming. In other words, those of you hoping for justice- don’t hold your breath. We have become no better than any banana republic. We conjure up “money” out of nowhere to pretend we can pay our bills. We have become a society of not who is right or wrong but who you know- or have something on.
I know this sounds bad but I am just commenting on what I see.
Another fly in the ointment right now is the coronavirus that seems to be going global. In listening to Chris Martenson (PHD in pathology) of Peak Prosperity he is concerned because infected people may go up to 2 weeks being contagious and not have symptoms. He has said that the testing for temperatures in people at airports is woefully inadequate.
Personally, I am not sure what to think but I believe by the middle of February we will know how concerned we should be. It appears that this virus passes from human to human easily. It also appears that major damage is being done to China’s economy because of quarantines, shuttered cities and travel bans. This is also happening during their Lunar New Year celebration when most travel and spend.
Add this to an already decelerating economy and it could decelerate at a dizzying pace IF this becomes a pandemic. Let’s hope not!
While I hope that this virus comes and goes it is obvious that CNBC and other financial game shows are using this story as “the reason” markets are falling. It couldn’t be that business conditions are collapsing across the globe or that almost all economic indicators are flashing red. It couldn’t be that the powers that be see the end of the road is near and need a “reason” other than them “printing” us into oblivion to keep the illusion of normalcy and solvency alive as long as possible- could it?
If I were one of those “in charge” I would be concerned right now about all of the violence breaking out on every continent. Very little reporting of the daily riots and protests is taking place either.
It appears to me that we may be entering a turbulent time where the “haves” have far too much and the “have-nots” are not only envious but are finding increasingly harder to survive. It is quite a paradox. Those running the show want inflation and higher prices- and what do they care- their investments have been soaring. Meanwhile the “have-nots” who are struggling to maintain their lifestyles- and many being FAR worse off than that can’t keep up when there is SUPPOSEDLY no inflation.
I believe we are at a point where it is obvious that there is no turning back. The money “printers” will be going into overdrive.
Many believe that since we have already seen hundreds of trillions of currency units conjured up out of nowhere that we can continue to get away with continuing it indefinitely. Like any illusion it will seem like that until reality strikes.
What may cause reality to strike? There are many answers to that but we can’t possibly know which it may be.
I believe it is more important than ever to hedge against falling currencies and to have assets that generally move in an opposite direction than equity markets. Remember- buy low- sell high. Are stocks cheap after being artificially levitated for 11 years? Are bonds cheap after being artificially levitated for 10 years? Is cash a great thing when you are getting a negative real rate of return?
The answer may be different if you are looking not only at US bonds and equities but open your mind to the rest of the world. The answer may be different particularly if the dollar falls in value.
How about gold, which has been artificially suppressed for a LONG time but never as much as in the last 9 years. Even with the suppression scheme gold has outperformed all of the major indexes meaningfully since the year 2000. Average annual return is over 25%. It is up 532% since 2000. $250.00 /oz in 2000 and 1580.00 per ounce 1/30/2020. (Marketwatch)
This shows me the power of media as not one in a hundred people would guess that gold outperformed the DOW by 3x since 2000- because most forget the pullbacks of 2000-2002 and 2008-2009. (Marketwatch)
What do you think may happen if the “printing” fails because people lose faith in the currency?
Not only will the currency become weaker but the financial games being played (stock buybacks, central bank buying stocks and bonds, central banks and banks creating paper contracts to keep gold and silver suppressed) will likely all fail. This will lead to a reversion to the mean (price discovery that we haven’t had in a LONG time). My guess is that those assets artificially propped up will be revalued FAR lower and those assets artificially suppressed will likely soar. There is a lot of pent-up energy on both sides.
I believe anyone clinging to the hope that this anomaly will go on forever are in for quite a surprise. I only wish I had a timeline. I will say, however, that I would rather be years early than a second late. As we have seen in the past few years it is also possible to prepare and still get paid to do it as gold and silver appear to be in a new bull market. It is my guess that we haven’t seen anything yet.
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