Everybody is a genius! As the “market” rises. Right now, many are very sure of themselves as the central banks are “printing and buying” in amounts that most people cannot comprehend. It is certainly not a normal situation when the economy is falling off of a cliff and the stock “markets” go on a tear higher. It may seem normal because of all the central bank “printing and buying” particularly in the past 15-20 years or so and the 24/7 propaganda from the financial game shows and legacy media.
The only things keeping this “market” propped up are corporate buybacks and central bank manipulation. There may be a bit of retail buying as many have FOMO (Fear of missing out).
The most important question, in my opinion, is, as this is going on is “What are the assets that have a chance to let you prosper long term?”
The most important thing to remember is that, as the central banks “print and buy” all of that “printing” that is easily in the tens of trillions globally is all DEBT-BASED. Yes, they buy assets and then charge US interest on what they buy. The debts are becoming so onerous that the end game, while it may not be here at this moment, is clearly in sight.
Keep in mind that, as the central banks conjure up cash with NO COLLATERAL and at VERY little cost, they are buying bonds- which affects just about all prices and are buying stocks- which also gives the stock “markets” a boost. As the central banks buy bonds it reduces the yields (your interest) and raises the price of the bond. It also makes stocks more desirable, and cash moves into stocks. This is intentional. When people see stock “markets” rising they THINK that all is well in the economy.
In the meantime, the banks and central banks also suppress the price of gold and silver (while they buy in record amounts) by conjuring up paper contracts that fool the algorithms in to thinking that someone out there is selling massive amounts of gold and silver (sometimes the entire mine supply for the year in a matter of minutes) while very little, if any, physical gold or silver changes hands or even exists to back up the trade. You and I would be in jail for “naked shorting” but the major banks pay a fine and continue on their merry way.
As debts continue to spiral out of control globally but probably nowhere worse than here in the USA the question I ask over and over again is “WHAT IS THE VALUE of A PROMISE THAT CANNOT OR WILL NOT BE KEPT?
Most people focus on the PRICE of the assets that they buy. I have the opinion that the VALUE of what you are buying is more important. Just because, with stock buybacks and buying by banks and central banks- does that add any VALUE? NO! It raises the price artificially- making more expensive for anyone looking to buy but it also creates an illusion of VALUE where only a fraction likely exists. This has gone on for so long that most people have no clue as to why this is happening. They just bury their heads and keep their fingers crossed. All is well- UNTIL it’s not!
I have stated many times that there is a cliff out there. I just can’t be sure where we actually go over it. This appears to be a situation where trillions of currency units are masquerading as production. The problem with that is that we will eventually run out of things we need to survive because we are consuming more than we are producing and going deeper and deeper into debt at the same time. In the past we had a productive society that valued hard work and thrift. Today, we have a mainly unproductive society that would just as well watch movies or play video games all day rather than accomplish something. Of course, when the “money” you are working for is being devalued like ours it leads to this type of attitude in many- particularly those that are being systematically disenfranchised by those “in charge” by design.
Having said all of this, would you rather hold an ASSET like gold and silver which are being artificially repressed- therefore offering you an opportunity to get VALUE that is off the charts in my opinion OR would you rather own stock and bonds that are being artificially held up?
Of course, the propping has gone on longer than I could have ever imagined so the timing here is unknown. All I will say is that when reality ultimately returns and the “market” does its only job- to reveal the true VALUE of assets those assets being artificially propped up, in my opinion, will collapse faster and far deeper than anyone is anticipating. I also believe the inverse to be true of many hard assets but mainly gold and silver.
My opinion is that with each currency unit that is conjured up from nowhere increases the VALUE of hard assets because the “money” is diluted and it takes more “money” to produce and acquire real goods. Look around. Our supposedly “strong dollar” is a myth that can be dispelled just by going to the grocery store.
By the way, gold is at $2030.00 on Thursday 12-14. The mainstream media and financial game shows keep that quiet as they shill for their advertisers. Keep this in mind- the US dollar has lost over 98% of its value versus gold since 1971. In 1971 gold was $35.00. Today- $2030.00 At $2030.00 you have 1.7% of the purchasing power you started with in 1971.
If we take the DOW Jones Industrial Average and assume it is near an all-time high at 37,000 many are giddy about their price appreciation and geniuses that they are. If we take the losses of purchasing power into account the VALUE today would be a mind-blowing 629. By the way, in August of 1971 the DOW was 900! See what I mean by all of this is an illusion? What this says to me is that your “gains” are mostly given up with the loss of purchasing power but DON”T WORRY- you get to pay taxes on all those “gains” in addition to the inflation tax that is obvious when looked at through this lens. Info based upon dollar vs gold.
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