In yesterday’s article I noted that while stocks are clearly forming a top, there are, as of right now, ZERO signs that it is THE top.
Remember, the fact that inflation is running hot doesn’t mean stocks have to crash right now. During the last major bout of hot inflation in the 1970s, stocks roared higher for two years before they finally came crashing down. Throughout that time, the Consumer Price Index (CPI) was clocking in over 3% if not 4%.
So, the fact CPI just hit 3% doesn’t mean stocks have to crash right here and now. And as we’ve assessed over the previous two days, unless the S&P 500 breaks below 4,000 on a monthly basis, things are risk-on.
But what about gold? What can we expect of it as inflation gets hotter and hotter?
The precious metal has been forming a clear bull-flag over the last nine months. As I write this, gold has just completed its third test of the top trendline.
This coincides with the 200-day moving average (DMA and red line) so gold faces a major challenged here. But with the 50-DMA turning up (blue line) momentum is building.
During bull runs, gold miners typically lead bullion and the gold miner ETF (GDX), has already broken above its 200-DMA.
If gold can follow, the upside for this breakout of the bull flag is an incredible 65 on GDX and $2450 on gold.
On that note, we just published a Special Investment Report concerning FIVE secret investments you can use to make inflation pay you as it rips through the financial system in the months ahead.
The report is titled Survive the Inflationary Storm. And
it explains in very simply terms how to make inflation PAY YOU.
We are making just 100 copies available to the public.
The Fed has already told us what is coming down the pike.
But no one is listening.
The Federal Reserve system employs roughly 20,000 people. I believe it is the single largest employer of economists in the U.S. And as a result of this, it actually produces a decent amount of high-quality research.
The problem is that NO ONE at the top of the Fed listens to it!
Case in point, in 2001, researchers at the Federal Reserve bank of St Louis discovered that the Fed’s preferred measures of inflation are the Consumer Price Index (CPI) and the Personal Consumption Expenditures (PCE) were in fact useless at predicting future inflation.
At the time they wrote:
We see that past inflation in food prices has been a better forecaster of future inflation than has the popular core measure…Comparing the past year’s inflation in food prices to the prices of other components that comprise the PCEPI (as in Table 1), we find that the food component still ranks the best among them all…
Source: Federal Reserve bank of St Louis
Despite this discovery, the Fed continues to use CPI and PCE as its preferred measures of inflation. Put another way, despite the fact that the Fed’s OWN RESEARCHERS proves that CPI and PCE are garbage, the Fed keeps using them.
And if you think that’s bad, take a look at what the Fed discovered in NOVEMBER 2019 when it comes to printing money to service debt.
A solution some countries with high levels of unsustainable debt have tried is printing money. In this scenario, the government borrows money by issuing bonds and then orders the central bank to buy those bonds by creating (printing) money. History has taught us, however, that this type of policy leads to extremely high rates of inflation (hyperinflation) and often ends in economic ruin.
Source: Federal Reserve bank of St Louis
Yes, the Fed’s own research has found that printing money and using it to buy debt results in raging inflation and economic ruin.
Bear in mind, that the Fed has printed $3+ trillion over the last 12 months for this express reason… and intends to print $120 billion per month for the next TWO YEARS (another $2.8 trillion).
Those who believe that all this money printing and subsequent inflation it will unleash means stocks will forever go up need to brush up on their history.
Stocks love inflation at first, but that love quickly turns to hate. During the last bout of hot inflation in the 1970s, stocks initially bubbled up before CRASHING nearly 50% in the span of two years, wiping out ALL of their initial gains and then some.
As I keep warning, inflation is going to ANNIHILATE investors’ portfolios.
Those who are properly prepared. however, will make literal fortunes.
On that note, if you’re worried about weathering a potential market crash, we’ve reopened our Stock Market Crash Survival Guide to the general public.
Within its 21 pages we outline which investments will perform best during a market meltdown as well as how to take out “Crash insurance” on your portfolio (these instruments returned TRIPLE digit gains during 2008).
We are making just 100 copies available to the public.
To pick up your copy of this report, FREE, swing by:
The inflationary storm clouds continue to form on the horizon.
Yesterday I noted that the U.S. is printing money at an extraordinary pace.
How extraordinary?
The
Fed alone will print $1.4 trillion in the next 12 months. This comes on
the heels of the $3 TRILLION it has already printed in the last year.
The Fed is not alone here.
The
Biden administration is pushing the “pedal to the metal” in terms of
stimulus. It is about to pass a $1.9 trillion stimulus plan. Bloomberg notes that this will be the second largest injection of federal cash in U.S. history.
The only one larger cash injection occurred was the first COVID-19 Stimulus plan (the CARES act) which was launched at the beginning of the pandemic.
We’re now on the tail end of the pandemic and we’re about to print another $1.9 trillion in stimulus. Bloomberg notes
that the Biden administration wants to spend $2 trillion on climate
change and $1.5 trillion on manufacturing and childcare.
These are staggering amounts of money. Never before in history has the U.S. printed this much money.
Add it all up and the U.S. will print an amount of money greater than the GDP of Japan, the third largest economy in the world.
All of this is going to unleash an inflationary storm.
Commodities have just broken out of a 10+ year bear market.
Gold was the first to figure this out.
Then Copper.
Now it’s Oil’s turn.
All of these charts are SCREAMING that inflation is coming. And as usual most investors are asleep at the wheel.
Those who are properly prepared. however, will make literal fortunes.
On that note, we just published a Special Investment Report concerning FIVE secret investments you can use to make inflation pay you as it rips through the financial system in the months ahead.
The report is titled Survive the Inflationary Storm. And it explains in very simply terms how to make inflation PAY YOU.
We are making just 100 copies available to the public.
The Biden administration has yet to take office, but it already has a MAJOR problem on its hands.
That problem is the U.S. dollar.
The greenback has declined over 13% since its March 2020. That’s a significant decline to begin with. However, what’s particularly concerning is the fact that the U.S. dollar continues to plunge without ever staging a significant rally.
Put another way, this decline is occurring with little if any breaks.
We are currently seeing a dead cat bounce off of CRITICAL support (red line in the chart below). However, once we take out that line, (and we will soon) we’re in VERY serious trouble.
Below this level, there are only TWO lines of support left for the U.S. dollar: support established during the 2012-2014 debt crisis in Europe, and support established by the 2008 crisis.
Put another way, the ONLY time in history that the U.S. doll fell to these levels was when a major Black Swan event was taking place in the global financial system.
Anything below these levels and we are talking about ALL TIME LOWS here for the greenback. Think a U.S. dollar crash.
Bear in mind, this is the situation BEFORE the Biden administration implements its intended $2 trillion stimulus program along with its $2 trillion infrastructure program. Throw in the various climate charge, reparations and other social spending programs that Biden and his allies have been talking about and you’ve got the makings of an inflationary storm.
Those investors who are well positioned to profit from it could see literal fortunes.
On that note, we just published a Special Investment Report concerning FIVE secret investments you can use to make inflation pay you as it rips through the financial system in the months ahead.
The report is titled Survive the Inflationary Storm. And it explains in very simply terms how to make inflation PAY YOU.
We are making just 100 copies available to the public.
As I’ve been noting in recent articles, inflation is already in the U.S. economy. The last real bout of inflation the U.S. experienced was in the 1970s. At that time, the only thing that stopped the inflationary storm was Fed Chair Paul Volcker who raised interest rates to an astonishing 19%.
Volcker was fired of the economic carnage this policy created. And since that time EVERY Fed Chair has been terrified of raising rates.
Put another way, this time around, there is no Paul Volcker-type Fed official willing to do “whatever it takes” to stop inflation. Which means inflation is going to rage and rage.
See for yourself.
The below chart compares the performance of the S&P 500 to the performance of the Emerging Market ETF (EEM).
When the S&P 500 outperforms EEM, this chart rallies, and when EEM outperforms the S&P 500, this chart falls. As you can see, this chart has been in a steady uptrend for the better part of the last decade (since 2011 to be exact). However, that uptrend appears to be ending.
This means we would be entering a prolonged period of Emerging Markets outperforming the S&P 500 (similar to what happened in 2001-2011).
Why does this matter?
Because historically this ratio has lead the $USD by several months.
See for yourself.
The below chart shows the S&P 500: Emerging Market ratio (blue line) overlaid with the $USD (black line). As you can see, the ratio between the S&P 500 and Emerging Markets has typically lead the $USD by several months.
So if the S&P 500 : EEM ratio is about to take out its bull market trendine and start collapsing, this would mean we could expect the $USD to fall dramatically just as it did from 2001-2011.
In simple terms, this would mean the $USD collapsing in a secular bear market as inflation erupted in the financial system. Precious metals would EXPLODE higher as would commodities, crypto currencies, and every other “weak $USD” play you can imagine.
Those investors who are well positioned to profit from it could see literal fortunes.
On that note, we just published a Special Investment Report concerning FIVE secret investments you can use to make inflation pay you as it rips through the financial system in the months ahead.
The report is titled Survive the Inflationary Storm. And it explains in very simply terms how to make inflation PAY YOU.
We are making just 100 copies available to the public.
Get ready for a
tsunami of liquidity to hit the financial system.
President Trump
has already signed a COVID-19 stimulus bill that will give $600 to most
Americans. The House of Representatives has since passed a bill to increase the
amount to $2,000.
So that’s a
massive wave of money flowing into the economy.
On top of this,
the Fed has just pumped $162 BILLION into the financial system in the last two
weeks.
To provide some
perspective here.
During the apex of
its monetary policy response to the Great Financial Crisis of 2008, the Fed was
printing $80 billion in new money per month.
It just
printed $162 billion in 14 days
Again, a tsunami
of liquidity is going to hit the financial system in 2021.And unlike in 2008,
this time it’s going to unleash hot inflation.
One of the most
baffling aspects of policymakers’ response to the Great Financial Crisis of
2008 was the total lack of inflation appearing in the broader economy.
After all, in 2008
central banks embarked on the most aggressive monetary easing in history (up
until that point). Between 2008 and 2016, central banks:
Cut
interest rates over 650 times.
Printed
over $12 TRILLION in new money.
And
pushed over $10 trillion bond yields into NEGATIVE territory.
And yet, for the
most part, inflation was nowhere to be found. Yes, the cost of the living for
most Americans continued to rise, but it didn’t rise any faster than it had in
the preceding 30 years. Indeed, on a year over year basis, inflation never
managed to stay above 2% for very long.
So where was the
inflation?
It was in stocks,
housing prices, and other assets. All of the money central banks printed never
got into the real economy. It went to the banks. And the
banks either used it to speculate in the stock market (investment banks) or
they sat on it.
This time around,
in 2020, things are VERY different: between stimulus payments and central bank
lending facilities directly to small businesses/ Main Street, much of the
stimulus money is actually going straight into the economy.
In the U.S., we’ve
already seen TWO stimulus programs of over $4.2 trillion of which at
least $2 trillion will go directly into the U.S. economy. And on top of
this, the Fed has put over $1.6 TRILLION in actual real money into the U.S.
economy in the form of credit facilities.
Add that up are
you’re talking about $3.6+ trillion in new money entering the economy this
year. The U.S.’s GDP is about $22 trillion, so we’re talking about an amount of
money equal to 17% of GDP.
THAT’s how you get
hot inflation. And the markets know it.
Take a look at
what gold has been doing.
Again, BIG
inflation will be the BIG theme for 2021.
Investors who are well positioned to profit from it could see literal fortunes.
On that note, we just published a Special Investment Report concerning FIVE secret investments you can use to make inflation pay you as it rips through the financial system in the months ahead.
The report is titled Survive the Inflationary Storm. And it explains in very simply terms how to make inflation PAY YOU.
We are making just 100 copies available to the public.
Our country is in debt to the tune of $27.5 trillion.
The economy is once again rolling over as states begin imposing economic lockdowns.
And according to Yelp, some 800 small businesses are closing per day.
In light of this economic carnage, you would think the U.S. central bank, the Federal Reserve, would be introducing policies to help small businesses… or push back against lockdowns.
You’d be wrong.
The Fed has decided the big issue it needs to focus on is…
CLIMATE CHANGE.
I’m not kidding. In November, Fed Chair Jerome Powell state the following:
“What we’re really working on is: how do we incorporate climate change risk into all that we do,” Powell said during an online panel Thursday hosted by the European Central Bank. “It has potential implications for monetary policy, for bank regulation, for financial stability, and I would say we’re in the very early stages of trying to work through what that means for our goals.”
Powell said the Fed is in the process of applying for membership in the Network for Central Banks and Supervisors for Greening the Financial System, an international group formed in 2017.
Source: Bloomberg
Nowhere and I mean NOWHERE in the original Federal Reserve Act of 1913, nor in its 1977 amendment, is there any mention of climate change. The Fed’s job as explicitly stated in the legislature is to use interest rates to insure economic growth with minimal inflation.
That’s it!
So what is the Fed up to?
Because with the U.S. at record levels of wealth inequality and income inequality, policymakers are looking for political cover to allow them to continue to provide stimulus/ interventions.
Social justice issues like climate change provide them with a politically acceptable excuse.
By introducing these topics, economic policymakers can IGNORE the fact that their money printing is the primary reason the U.S. has such horrific wealth and income inequality in the first place.
Remember, loose monetary policy inherently benefits the wealthy who can leverage up to acquire assets. Someone worth $1 billion can borrow $200 million to buy real estate and stocks, thereby amassing a second fortune when the Fed and Treasury create bubbles in those assets.
By way of contrast, someone who is worth $50K and who earns $45K per year, likely has little if any exposure to stocks or real estate. And even if that person were to invest ALL $50K in stocks and time the bubble perfectly, they’ll at best make $150K out of the deal.
Meanwhile our billionaire has likely seen his or her wealth increase by hundreds of millions of dollars.
Again, money printing and loose monetary policy CREATE wealth inequality. And with these inequalities at RECORD levels today, the Fed is looking for POLITICAL COVER to allow them to continue intervening.
Social Justice issues like climate change give them this cover. Which is why we can expect MORE talk about climate change, more money printing, and more inflation in 2021.
Gold knows this, which is why it has exploded higher in EVERY major currency.
Investors who are well positioned to profit from it could see literal fortunes.
On that note, we just published a Special Investment Report concerning FIVE secret investments you can use to make inflation pay you as it rips through the financial system in the months ahead.
The report is titled Survive the Inflationary Storm. And it explains in very simply terms how to make inflation PAY YOU.
We are making just 100 copies available to the public.
As I keep stating, the big theme for 2021 will be inflation. And a Biden administration will only accelerate this.
If you doubt me, consider that Biden has picked Janet Yellen as his Treasury Secretary.
Previously, Yellen ran the San Francisco Fed before eventually rising to be Fed Chair under the Obama administration. Throughout her tenure in these positions, she proved to be someone who LOVED using political reasoning to justify printing more money or easing monetary conditions.
In 2014, soon after taking the helm as Fed chair, Yellen gave a speech in which she stated that the Fed would have done a better job predicting and then navigating the Great Financial Crisis of 2008 if it had maintained more “diversity” in its workforce. She subsequently followed this up by creating the Fed’s first task force to improve the gender and ethnic diversity at the Fed.
Why does this matter?
Because NOWHERE in the original Federal Reserve Act of 1913, nor in its 1977 amendment, is there any mention of ANY of this stuff. The Fed’s job as explicitly stated in the legislature is to use interest rates to insure economic growth with minimal inflation.
THAT’S IT.
In picking Janet Yellen as his Treasury Secretary Joe Biden is effectively giving the purse strings for the Republic to a social justice warrior: someone who believes that social justice issues should guide monetary policy.
In plain terms, all of this means MORE MONEY PRINTING.
Think about it… what precisely could the Treasury do about diversity? The Treasury is responsible for printing money and moving it around. So, if the Treasury decides to take on political projects with the intention of making the economy “fair” all it really means is that the Treasury will be funneling more money into the economy.
Remember, the Treasury created the credit facilities through which the Fed bailed out the entire financial system in March 2020. It was through these credit facilities that the Fed began buying:
1) Municipal bonds.
2) Corporate bonds.
3) Corporate bond ETFs.
4) Asset backed securities, including assets backed by money market funds, auto loans, student loans, and certificates of deposit.
As such, the Treasury represents the conduit through which the Fed funnels record stimulus into the financial system.
As I’ve stated previously, the Fed spent $3 trillion between 2008 and 2016 fighting the Great Financial Crisis and its aftermath. The Fed spent that same amount in seven months in 2020.
It was only able to do this legally by using the Treasury as a conduit. And we also need to remember, that the Treasury was responsible for the dispensation of the $2 trillion in stimulus for the CARES act in 2020.
And Joe Biden has just picked Janet Yellen to run this organization: a career academic who has never worked in the private sector and who strongly believes that she should use her position to combat political issues such as diversity and climate change.
Again, all of this means MORE money printing is coming to the U.S.
This is the BIG theme for 2021 no matter what else may come: more money printing, more inflation, and more explosive moves in inflationary assets.
Those investors who are well positioned to profit from it could see literal fortunes.
On that note, we just published a Special Investment Report concerning FIVE secret investments you can use to make inflation pay you as it rips through the financial system in the months ahead.
The report is titled Survive the Inflationary Storm. And it explains in very simply terms how to make inflation PAY YOU.
We are making just 100 copies available to the public.
As we wrap up 2020 and move into 2021, the world faces multiple systemically important issues.
The biggest ones are:
● Will the COVID-19 vaccine work?
● Will the U.S. economy recover to where it was pre-COVID-19?
● Will Donald Trump leave the White House quietly or will the U.S. more into greater political turmoil?
How these issues will be resolved remains to be seen. So we are in very uncertain times in the world.
The ONLY thing we DO know for certain is that EVERY major problem going forward is going to be dealt with by printing money.
And because for the first time in decades MUCH of this money will actually funnel directly into the actual economy, HOT inflation will finally ignite.
The markets have already begun to discount this.
The Fed’s own research has stated that the single best predictor of future inflation is FOOD inflation.
I realize this sounds odd. After all, publicly, the Fed states that its preferred measures of inflation are the Consumer Price Index (CPI) and the Personal Consumption Expenditures (PCE).
And yet, the Fed’s OWN RESEARCH has shown that these metrics do a horrible job of predicting future inflation. Not only that, but the Fed has KNOWN this since 2001!
In a little-known paper published back in 2001, Fed researchers wrote the following:
We see that past inflation in food prices has been a better forecaster of future inflation than has the popular core measure…Comparing the past year’s inflation in food prices to the prices of other components that comprise the PCEPI (as in Table 1), we find that the food component still ranks the best among them all…
St Louis Fed
I want you to focus on these two admissions:
1) The Fed has admitted that its official inflation measures do not accurately predict future inflation.
2) The Fed admitted that FOOD prices are a much better predictor of future inflation. In fact, food prices were a better predictor of inflation than the Fed’s PCE, non-durables goods, transportation services, housing, clothing, energy and more.
With that in mind, take a look at the below table taken directly from the Bureau of Labor Statistics’ website:
Notice that FOOD prices have shown the fastest rise out of all other components over the last 12 months, clocking in at 3.9%. The BLS itself states that:
1) All six major grocery store food group indexes are UP over the last year.
2) The increase in prices range from 2.6 percent (fruits and vegetables) to 6.1 percent (meats, poultry fish, and eggs).
3) The index for food away from home rose 3.9 percent over the last year, the largest 12-month increase reported for that index in over a DECADE (since May 2009).
If that was not worrisome enough, take a look at what is happening in agricultural commodities (the items that make up food).
What you’re looking at is the 10-year bear market in food prices ENDING. This chart is telling us that higher inflation is coming. And coming soon.
This is the BIG theme for 2021 no matter what else may come: more money printing, more inflation, and more explosive moves in inflationary assets.
Those investors who are well positioned to profit from it could see literal fortunes.
On that note, we just published a Special Investment Report concerning FIVE secret investments you can use to make inflation pay you as it rips through the financial system in the months ahead.
The report is titled Survive the Inflationary Storm. And it explains in very simply terms how to make inflation PAY YOU.
We are making just 100 copies available to the public.
California has already imposed a second round of lockdowns.
And yesterday, Mayor De Blasio warned New York City to prepare for a second
round of lockdowns. And Joe Biden’s top medical advisor has suggested a full-scale
nationwide lockdown of four to six weeks to “control the pandemic.”
Setting aside the politics of these situations, more
lockdowns means more economic downturn, more economic downturn means more Fed
interventions, and more Fed interventions means more money printing.
Indeed, if anything has become clear in 2020, it’s that
policymakers will deal with any and all problems, both health and economic, by
printing money.
This is why the $USD has been dropping like a stone since
March, erasing two year’s worth of gains in the span of nine months.
It’s also why inflation is now ripping through the financial
system. Take a look at what copper, steel and gold are doing and you’ll see
assets exploding out of multi-year downtrends.
This is the BIG theme for 2021 no matter what else may come:
more money printing, more inflation, and more explosive moves in inflationary
assets.
On that note, we just published a Special Investment Report concerning FIVE secret investments you can use to make inflation pay you as it rips through the financial system in the months ahead.
The report is titled Survive the Inflationary Storm. And it explains in very simply terms how to make inflation PAY YOU.
We are making just 100 copies available to the public.
California has already imposed a second round of lockdowns.
And yesterday, Mayor De Blasio warned New York City to prepare for a second
round of lockdowns. And Joe Biden’s top medical advisor has suggested a full-scale
nationwide lockdown of four to six weeks to “control the pandemic.”
Setting aside the politics of these situations, more
lockdowns means more economic downturn, more economic downturn means more Fed
interventions, and more Fed interventions means more money printing.
Indeed, if anything has become clear in 2020, it’s that
policymakers will deal with any and all problems, both health and economic, by
printing money.
This is why the $USD has been dropping like a stone since
March, erasing two year’s worth of gains in the span of nine months.
It’s also why inflation is now ripping through the financial
system. Take a look at what copper, steel and gold are doing and you’ll see
assets exploding out of multi-year downtrends.
This is the BIG theme for 2021 no matter what else may come:
more money printing, more inflation, and more explosive moves in inflationary
assets.
On that note, we just published a Special Investment Report concerning FIVE secret investments you can use to make inflation pay you as it rips through the financial system in the months ahead.
The report is titled Survive the Inflationary Storm. And it explains in very simply terms how to make inflation PAY YOU.
We are making just 100 copies available to the public.
I had previously written that the election was in the courts and that based on legal precedent, the courts would give President Trump a second term.
The Supreme Court put that notion to rest late on Friday night when it rejected to even hear the case brought by Texas and 18 other states.
It’s pretty staggering if you think about it.
There are sworn affidavits from thousands of poll workers swearing to witnessing fraud. There are vote audits that have turned up fraud. There is statistical analysis that shows fraud. There is historical precedent concerning how key counties and states determine election outcomes that show fraud.
And yet the courts have all either refused to accept any of this evidence… OR refused to even listen to the cases. It’s pretty incredible when you consider just how many ridiculous lawsuits and court cases are heard at all levels of the judiciary, even the Supreme Court.
There are still several cases outstanding as well as political avenues through which President Trump could secure a second term, but those are all EXTREME and likely not worth delving into at this point.
At the end of the day, I was wrong.
I am not in the business of pretending to be psychic, nor do I care for those analysts and pundits who make predictions that don’t prove correct and who then pretend they never made said predictions.
I predicted President Trump would win a second term in the courts. I was wrong. The end.
What matters to us as investors now is how a Biden administration will impact the markets. And by the look of things, the markets love the idea that Biden will packing the Fed and the Treasury with money printers.
The US was already on a trajectory towards hot inflation BEFORE Joe Biden won the election and started enlisting money printers like Janet Yellen to run key positions in his cabinet. Now that we DO have a Biden administration and it is packed with money printers, it’s not a question of IF we get HOT inflation, but WHEN.
On that note, the $USD has continued to break down in a big way. As I write this, it’s dropping like a stone, again. We are now coming up on MAJOR support in the large consolidation pattern that the $USD has been following since 2015.
A breakdown here, would signal a move into HOT inflation.
On that note, it’s worth pointing out that gold has ERUPTED to new all-time highs priced in EVERY major currency (Dollars, Euros, Yen and Francs).
This is THE big theme for 2021. It is global in nature. And those investors who are well positioned to profit from it could see literal fortunes.
On that note, we just published a Special Investment Report concerning FIVE secret investments you can use to make inflation pay you as it rips through the financial system in the months ahead.
The report is titled Survive the Inflationary Storm. And it explains in very simply terms how to make inflation PAY YOU.
We are making just 100 copies available to the public.
I had previously written that the election was in the courts and that based on legal precedent, the courts would give President Trump a second term.
The Supreme Court put that notion to rest late on Friday night when it rejected to even hear the case brought by Texas and 18 other states.
It’s pretty staggering if you think about it.
There are sworn affidavits from thousands of poll workers swearing to witnessing fraud. There are vote audits that have turned up fraud. There is statistical analysis that shows fraud. There is historical precedent concerning how key counties and states determine election outcomes that show fraud.
And yet the courts have all either refused to accept any of this evidence… OR refused to even listen to the cases. It’s pretty incredible when you consider just how many ridiculous lawsuits and court cases are heard at all levels of the judiciary, even the Supreme Court.
There are still several cases outstanding as well as political avenues through which President Trump could secure a second term, but those are all EXTREME and likely not worth delving into at this point.
At the end of the day, I was wrong.
I am not in the business of pretending to be psychic, nor do I care for those analysts and pundits who make predictions that don’t prove correct and who then pretend they never made said predictions.
I predicted President Trump would win a second term in the courts. I was wrong. The end.
What matters to us as investors now is how a Biden administration will impact the markets. And by the look of things, the markets love the idea that Biden will packing the Fed and the Treasury with money printers.
The US was already on a trajectory towards hot inflation BEFORE Joe Biden won the election and started enlisting money printers like Janet Yellen to run key positions in his cabinet. Now that we DO have a Biden administration and it is packed with money printers, it’s not a question of IF we get HOT inflation, but WHEN.
On that note, the $USD has continued to break down in a big way. As I write this, it’s dropping like a stone, again. We are now coming up on MAJOR support in the large consolidation pattern that the $USD has been following since 2015.
A breakdown here, would signal a move into HOT inflation.
On that note, it’s worth pointing out that gold has ERUPTED to new all-time highs priced in EVERY major currency (Dollars, Euros, Yen and Francs).
This is THE big theme for 2021. It is global in nature. And those investors who are well positioned to profit from it could see literal fortunes.
On that note, we just published a Special Investment Report concerning FIVE secret investments you can use to make inflation pay you as it rips through the financial system in the months ahead.
The report is titled Survive the Inflationary Storm. And it explains in very simply terms how to make inflation PAY YOU.
We are making just 100 copies available to the public.
The media is trying to
attribute this move to Joe Biden picking various people for his cabinet.
However, as I’ve stated many times before, Joe Biden has yet to actually win
the election. Moreover, the market moves are occurring at totally different
times from the announcements of the Biden campaign. So, you can forget this
narrative.
What is pushing the market
higher?
The Fed and other central
banks.
The Fed’s balance sheet
exploded by over $60 billion this week, pushing it to new all-time highs of
$7.2 trillion.
All told, the
Fed has expanded its balance sheet by $3.1 trillion this year.
To put that into
perspective, in response to the Great Financial Crisis, the Fed expanded its
balance sheet by this same amount over the course of FIVE YEARS from 2008 to…
2013.
Put another way, it
took the Fed FIVE YEARS to spend the same amount of money during the worst
financial crisis and recession in 80 years. This time around, the
Fed spent it in EIGHT MONTHS.
If you want a reason for
stocks exploding to new all-time highs over and over again, it’s this TSUNAMI
of liquidity the Fed has provided.
And the Fed is not the only
one.
The European Central Bank’s (ECB) balance sheet ALSO hit a new-all time high this week.
Forget Joe Biden or Donald
Trump, globally central banks and governments have spent $14 TRILLION this
year. We’re talking about an amount of money equal to the GDPs of China (the
2nd largest economy in the world).
That money has to go
somewhere. And much of it has gone into stocks, where it is creating the mother
of all bubbles.
On that note, we are putting
together an Executive Summary outlining all of these issues as well as what’s
coming down the pike when the Everything Bubble bursts.
It will be available exclusively to our clients.
If you’d like to have a copy delivered to your inbox when it’s completed, you
can join the wait-list here.
Jerome Powell is going to create the mother of all bubbles.
The first sign of this came in 2018 when Powell used his first Jackson Hole symposium to glorify former Fed Chair Alan Greenspan’s economic insights and “considerable fortitude” in not raising interest rates back in the late ‘90s.
Yes, Powell believed Greenspan was a genius for not raising rates in the late’ 90s. If you don’t remember what stocks did at that time, it looked like this:
The below quote is quite revealing. And looking back, this speech was a hint of things to come.
The FOMC thus avoided the Great-Inflation-era mistake of overemphasizing imprecise estimates of the stars. Under Chairman Greenspan’s leadership, the Committee converged on a risk-management strategy that can be distilled into a simple request: Let’s wait one more meeting; if there are clearer signs of inflation, we will commence tightening.13 Meeting after meeting, the Committee held off on rate increases while believing that signs of rising inflation would soon appear. And meeting after meeting, inflation gradually declined.
Source: Federal Reserve
In the 12-18 months following this speech, Jerome Powell became one of the biggest monetary easers in history, cutting interest rates while also launching multiple repo programs through which the Fed funneled hundreds of billions of dollars into the financial system despite any indications of a recession.
Bear in mind, this was before the COVID-19 pandemic. Once COVID-19 hit, Powell would unleashed a tsunami of liquidity that would make even Alan Greenspan blush.
We’ve reviewed the Fed’s recent monetary easing multiple times in recent weeks. However, given the magnitude of what the Fed is about to announce, it’s worth repeating.
To combat the economic fallout from the COVID-19 pandemic, the Fed:
Made its quantitative easing (QE) program “unlimited.” meaning it would simply print money and buy assets ad infinitum.
Increased the scope of its QE program from simply buying U.S. Treasuries and mortgage backed securities to include: everything from municipal bonds to corporate junk bonds.
Expanded its money market QE to also include a “wider range of securities” including certificates of deposits (CDs).
Expanded its commercial paper QE program.
Introduced a new QE program to buy any asset-backed security (ABS) including student debt.
Began a bailout program for small- and medium-sized business.
Lowered the interest rate on its repo programs from 0.15% to LITERAL ZERO (meaning NO interest charged).
At its peak in March 2020, the Fed was pumping $125 billion into the market every day.
Things have since calmed down as stocks rocketed to all-time highs. However, Powell’s recent statements clearly indicate he doesn’t think this is enough.
Indeed, during recent press conferences Powell’s Fed has maintained that the Fed will keep interest rates at ZERO through 2023.
Yes, 2023.
What do you think this is going to do to stocks? The last time the Fed held rates at ZERO for years was from 2008-2015. During that time, the S&P 500 nearly TRIPLED.
Currently stocks are up 50% from the lows. If they were to follow a similar move, we’d see the mother of all bubbles with the S&P 500 rising to over 6,000.
At the end of the day, it all boils down to what I’ve been saying since 2017… that the Fed and other central banks are trapped in a vicious cycle through which it INTENTIONALLY creates bubbles to deal with each successive bust.
With
that in mind, we’ve just published an investment report titled Triple
Your Money With the Mother of All Bubbles.
It
outlines what the Fed is doing, why it’s doing it, and a unique investment that
could easily triple as the Fed unleashes a tsunami of liquidity pushing stocks
to nosebleed levels.
The last time the Fed began an easing cycle, this investment rose over 1,439%. And this time around we could see similar gains.
We are making only 100 copies of this report available to the general public,
Jerome Powell is going to create the mother of all bubbles.
The first sign of this came in 2018 when Powell used his first Jackson Hole symposium to glorify former Fed Chair Alan Greenspan’s economic insights and “considerable fortitude” in not raising interest rates back in the late ‘90s.
Yes, Powell believed Greenspan was a genius for not raising rates in the late’ 90s. If you don’t remember what stocks did at that time, it looked like this:
The below quote is quite revealing. And looking back, this speech was a hint of things to come.
The FOMC thus avoided the Great-Inflation-era mistake of overemphasizing imprecise estimates of the stars. Under Chairman Greenspan’s leadership, the Committee converged on a risk-management strategy that can be distilled into a simple request: Let’s wait one more meeting; if there are clearer signs of inflation, we will commence tightening.13 Meeting after meeting, the Committee held off on rate increases while believing that signs of rising inflation would soon appear. And meeting after meeting, inflation gradually declined.
Source: Federal Reserve
In the 12-18 months following this speech, Jerome Powell became one of the biggest monetary easers in history, cutting interest rates while also launching multiple repo programs through which the Fed funneled hundreds of billions of dollars into the financial system despite any indications of a recession.
Bear in mind, this was before the COVID-19 pandemic. Once COVID-19 hit, Powell would unleashed a tsunami of liquidity that would make even Alan Greenspan blush.
We’ve reviewed the Fed’s recent monetary easing multiple times in recent weeks. However, given the magnitude of what the Fed is about to announce, it’s worth repeating.
To combat the economic fallout from the COVID-19 pandemic, the Fed:
Made its quantitative easing (QE) program “unlimited.” meaning it would simply print money and buy assets ad infinitum.
Increased the scope of its QE program from simply buying U.S. Treasuries and mortgage backed securities to include: everything from municipal bonds to corporate junk bonds.
Expanded its money market QE to also include a “wider range of securities” including certificates of deposits (CDs).
Expanded its commercial paper QE program.
Introduced a new QE program to buy any asset-backed security (ABS) including student debt.
Began a bailout program for small- and medium-sized business.
Lowered the interest rate on its repo programs from 0.15% to LITERAL ZERO (meaning NO interest charged).
At its peak in March 2020, the Fed was pumping $125 billion into the market every day.
Things have since calmed down as stocks rocketed to all-time highs. However, Powell’s recent statements clearly indicate he doesn’t think this is enough.
Indeed, during recent press conferences Powell’s Fed has maintained that the Fed will keep interest rates at ZERO through 2023.
Yes, 2023.
What do you think this is going to do to stocks? The last time the Fed held rates at ZERO for years was from 2008-2015. During that time, the S&P 500 nearly TRIPLED.
Currently stocks are up 50% from the lows. If they were to follow a similar move, we’d see the mother of all bubbles with the S&P 500 rising to over 6,000.
At the end of the day, it all boils down to what I’ve been saying since 2017… that the Fed and other central banks are trapped in a vicious cycle through which it INTENTIONALLY creates bubbles to deal with each successive bust.
With
that in mind, we’ve just published an investment report titled Triple
Your Money With the Mother of All Bubbles.
It
outlines what the Fed is doing, why it’s doing it, and a unique investment that
could easily triple as the Fed unleashes a tsunami of liquidity pushing stocks
to nosebleed levels.
The last time the Fed began an easing cycle, this investment rose over 1,439%. And this time around we could see similar gains.
We are making only 100 copies of this report available to the general public,
It’s been an exciting couple of months, but despite all the action the S&P 500 has effectively gone nowhere since late August.
Whenever we break out of this range, the move will be explosive.
The one stock I’m watching closely for signs of the move is Shopify (SHOP).
SHOP bottomed March 18th (blue square) a full FIVE days before the broader market did on March 23rd (purple square).
Put simply, SHOP lead the market by a wide margin out of the March bottom. Similarly, it peaked hours before the broader market did in early September.
Put simply, SHOP has been leading the market at every major turn for months.
So, what’s it saying now?
Despite the recent correction in stocks, SHOP is holding up well and remains close to the top of its consolidation range. If it can finally break that range with conviction, we’ll see a MAJOR bull run start in the broader market.
At the end of the day, it all boils down to what I’ve been saying since 2017… that the Fed and other central banks are trapped in a vicious cycle through which it INTENTIONALLY creates bubbles to deal with each successive bust.
We had the Tech Bubble in the ’90s.
The Housing Bubble in the mid-00s.
And now the Everything Bubble in 2020.
On that note, we’re putting together an Executive Summary on how to play this move.
It will identify which investments will perform best during the Fed’s next bubble, including a unique play that could more than double the performance of the S&P 500.
This Executive Summary will be available exclusively to subscribers of our Gains Pains & Capital e-letter. To insure you receive a copy when it’s sent out, you can join here:
It’s been an exciting couple of months, but despite all the action the S&P 500 has effectively gone nowhere since late August.
Whenever we break out of this range, the move will be explosive.
The one stock I’m watching closely for signs of the move is Shopify (SHOP).
SHOP bottomed March 18th (blue square) a full FIVE days before the broader market did on March 23rd (purple square).
Put simply, SHOP lead the market by a wide margin out of the March bottom. Similarly, it peaked hours before the broader market did in early September.
Put simply, SHOP has been leading the market at every major turn for months.
So, what’s it saying now?
Despite the recent correction in stocks, SHOP is holding up well and remains close to the top of its consolidation range. If it can finally break that range with conviction, we’ll see a MAJOR bull run start in the broader market.
At the end of the day, it all boils down to what I’ve been saying since 2017… that the Fed and other central banks are trapped in a vicious cycle through which it INTENTIONALLY creates bubbles to deal with each successive bust.
We had the Tech Bubble in the ’90s.
The Housing Bubble in the mid-00s.
And now the Everything Bubble in 2020.
On that note, we’re putting together an Executive Summary on how to play this move.
It will identify which investments will perform best during the Fed’s next bubble, including a unique play that could more than double the performance of the S&P 500.
This Executive Summary will be available exclusively to subscribers of our Gains Pains & Capital e-letter. To insure you receive a copy when it’s sent out, you can join here:
The market will likely hit new all-time highs this week.
Stocks held support last week (green line in the chart below). We now have a bull flag forming on the 4-hour chart for the S&P 500 (blue lines in the chart below).
It’s incredible to be writing this: stocks roaring to new all-time highs multiple times after one of the sharpest most violent sell-offs in history hitting in March of this year.
Indeed, by the look of things, we’re going to see a massive stock bubble in the coming months.
And why not? The economy appears to be coming back strongly from the COVID-19 shutdowns. Last week we found out that retail sales rose 1.9% month over month (only 0.3% was expected).
And against this backdrop of growth, central banks and policymakers have unleashed a TSUNAMI of money printing.
Remember, to combat the economic fallout from the Great Financial Crisis of 2008 central banks printed $12 trillion between 2008 and 2016.
Well. they’ve printed more than HALF of this ($7 trillion) in the six months from April to September alone. Throw in stimulus programs from governments and the number balloons over $15 TRILLION.
Put another way, it previously took policymakers EIGHT years for to spend $12 trillion. They’ve already committed to spending MORE than this in less than EIGHT months.
Also, and this is key…between stimulus payments and central bank lending facilities directly to small businesses/ Main Street, much of this money is actually going straight into the economy.
In the U.S., we’ve already seen one stimulus program of $3 trillion. On top of this, the Fed has put over $1.6 TRILLION in actual real money into the U.S. economy in the form of credit facilities. Add that up are you’re talking about $5+ trillion in new money entering the economy this year.
And now Congress is talking about another stimulus program somewhere between $500 million and $1.8 trillion being funneled into the economy sometime in the next three months. That would put the total money printing for 2020 in the ballpark of $7 trillion.
Let’s put this into perspective. The U.S. economy is roughly $22 trillion in size. So, in the span of a single year, policymakers will have funneled an amount of money equal to nearly 33% of U.S. GDP directly into the economy.
This is how you get a MASSIVE bubble. As in the S&P 500 goes to 6,000 or higher in the next 12 months.
I realize that sounds insane. But remember, we’re talking about an amount of liquidity equal to 33% of the U.S. GDP being funneled into the economy in nine months.
As investors, our job is NOT to argue about what the market should do, it’s to make MONEY from what the market IS doing.
At the end of the day, it all boils down to what I’ve been saying since 2017… that the Fed and other central banks are trapped in a vicious cycle through which it INTENTIONALLY creates bubbles to deal with each successive bust.
We had the Tech Bubble in the ’90s.
The Housing Bubble in the mid-00s.
And now the Everything Bubble in 2020.
On that note, we’re putting together an Executive Summary on how to play this move.
It will identify which investments will perform best during the Fed’s next bubble, including a unique play that could more than double the performance of the S&P 500.
This Executive Summary will be available exclusively to subscribers of our Gains Pains & Capital e-letter. To insure you receive a copy when it’s sent out, you can join here:
Stocks will break above resistance (red line) today.
The bullish falling wedge formation (blue lines) now has a confirmed breakout.
This increasingly looks like the next major leg up. Stocks will be reclaiming their bull market channel that has guided the markets since early April.
This opens the door to a run to 3,600+ on the S&P 500.
At the end of the day, it all boils down to what I’ve been saying since 2017… that the Fed and other central banks are trapped in a vicious cycle through which it INTENTIONALLY creates bubbles to deal with each successive bust.
We had the Tech Bubble in the ’90s.
The Housing Bubble in the mid-00s.
And now the Everything Bubble in 2020.
On that note, we’re putting together an Executive Summary on how to play this move.
It will identify which investments will perform best during the Fed’s next bubble, including a unique play that could more than double the performance of the S&P 500.
This Executive Summary will be available exclusively to subscribers of our Gains Pains & Capital e-letter. To insure you receive a copy when it’s sent out, you can join here:
