The S&P 500 have been chopping just below overhead resistance (red line in the chart below) for two weeks now.
The significance of this level cannot be overstated. This line ALSO represents the 61.8% Fibonacci retracement of the market decline in March.
It is widely believed that a break above the 61.8% retracement line indicates stocks are in a NEW bull market, not a bear market bounce. Again, the significance of this level cannot be overstated.
One chart that has caught my attention is the monthly chart for long-term treasury ETF (TLT). This chart appears to be indicating a major “risk on” move is coming in the financial system. IF TLT breaks below that red line it could ignite a major bull run in stocks to new highs.
Interestingly, a big breakdown in bonds would indicate a sharp rise in inflation.
Gold is saying something similar: we’ve had breakouts in every major currency. This too says big inflation is coming.
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 S&P 500 have been chopping just below overhead resistance (red line in the chart below) for two weeks now.
The significance of this level cannot be overstated. This line ALSO represents the 61.8% Fibonacci retracement of the market decline in March.
It is widely believed that a break above the 61.8% retracement line indicates stocks are in a NEW bull market, not a bear market bounce. Again, the significance of this level cannot be overstated.
One chart that has caught my attention is the monthly chart for long-term treasury ETF (TLT). This chart appears to be indicating a major “risk on” move is coming in the financial system. IF TLT breaks below that red line it could ignite a major bull run in stocks to new highs.
Interestingly, a big breakdown in bonds would indicate a sharp rise in inflation.
Gold is saying something similar: we’ve had breakouts in every major currency. This too says big inflation is coming.
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 saying, it doesn’t matter what we think… it’s what the market thinks that matters.
Personally, I think it’s insane that the Fed has nationalized the entire debt markets. Similarly, I think it was a massive mistake to shut down the economy. And I think that the human suffering created by this mess is truly horrific.
Stocks don’t seem to think any of this. Stocks think that things are going to recover relatively quickly. I think that’s insane, but again, as an investor, it doesn’t matter what I think… it’s what the market thinks that matters.
With that in mind, stocks are breaking through resistance this morning. Multiple “risk” measures I track suggest we’re moving higher.
The ratio between stocks and Treasuries has broken above its 50% retracement and held there.
————————————————————
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But today, you can get a LIFETIME subscription to ALL of them, along with every new product we ever launch, for just $5,000.
Credit spreads have held support (reds line) and are forming bull flags (red lines). This suggests an upwards breakout which would be decidedly “risk on.”
And finally, breadth continues to move higher. Moreover, every correction in breadth has held support before breaking higher (red lines). This tells us more and more stocks are joining into the rally. That is what we need to see for a new bull market to begin.
Again, I think the fact this is happening during an economic depression is insane. But as investors, it doesn’t matter what we think… it’s what the market thinks that matters.
And the market thinks more upside is coming.
They also think the Fed and other central banks are going unleash an inflationary storm. Gold is breaking out in every major currency.
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.
Indeed, have ramped 30% from their lows in late March. Every dip has been bought aggressively or resulted in a consolidation that was then resolved upwards with great energy.
Historically, the faster and larger the bounce following a crash, the less likelihood that we fall to new lows or crash further in a big way.
Now, before you get frustrated with me, let me say that I’m well aware that the stock market bottomed due to Fed intervention and that the Fed is manipulating everything.
I’m NOT saying I agree with what the Fed has done, nor am I saying it was the right thing to do.
Whether the person buying the stock market is someone like you or me, or it’s the Fed, doesn’t matter. Buyers are overpowering sellers time and again.
After all, if the Fed wants to force the market to rise, which would you do… say it’s fake and sit on losses or use the Fed’s policy to make money for yourself and your family?
As I keep saying time and again, it’s not what we think that matters, it’s what the market thinks. And the market thinks we’re going higher for now.
That also think the Fed and other central banks are going unleash an inflationary storm. Gold is breaking out in every major currency.
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.
Indeed, have ramped 30% from their lows in late March. Every dip has been bought aggressively or resulted in a consolidation that was then resolved upwards with great energy.
Historically, the faster and larger the bounce following a crash, the less likelihood that we fall to new lows or crash further in a big way.
Now, before you get frustrated with me, let me say that I’m well aware that the stock market bottomed due to Fed intervention and that the Fed is manipulating everything.
I’m NOT saying I agree with what the Fed has done, nor am I saying it was the right thing to do.
Whether the person buying the stock market is someone like you or me, or it’s the Fed, doesn’t matter. Buyers are overpowering sellers time and again.
After all, if the Fed wants to force the market to rise, which would you do… say it’s fake and sit on losses or use the Fed’s policy to make money for yourself and your family?
As I keep saying time and again, it’s not what we think that matters, it’s what the market thinks. And the market thinks we’re going higher for now.
That also think the Fed and other central banks are going unleash an inflationary storm. Gold is breaking out in every major currency.
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.
Indeed, have ramped 30% from their lows in late March. Every dip has been bought aggressively or resulted in a consolidation that was then resolved upwards with great energy.
Historically, the faster and larger the bounce following a crash, the less likelihood that we fall to new lows or crash further in a big way.
Now, before you get frustrated with me, let me say that I’m well aware that the stock market bottomed due to Fed intervention and that the Fed is manipulating everything.
I’m NOT saying I agree with what the Fed has done, nor am I saying it was the right thing to do.
Whether the person buying the stock market is someone like you or me, or it’s the Fed, doesn’t matter. Buyers are overpowering sellers time and again.
After all, if the Fed wants to force the market to rise, which would you do… say it’s fake and sit on losses or use the Fed’s policy to make money for yourself and your family?
As I keep saying time and again, it’s not what we think that matters, it’s what the market thinks. And the market thinks we’re going higher for now.
That also think the Fed and other central banks are going unleash an inflationary storm. Gold is breaking out in every major currency.
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 question is not which woman is the most beautiful but which woman everyone else will think is the most beautiful.”
The man in front of me is a billionaire investor. He is a self-made billionaire. He has actually funded other billionaire investors’ hedge funds. Warren Buffett has publicly admitted that he is one of the few people Buffett “learns from.”
His name is Howard Marks. And suffice to say, I’m all ears.
Marks is discussing the importance of what he calls “second level thinking.”
Second level thinking is being able to think beyond the first level implications of a particular development. Mr. Marks provides several examples of this in his book:
First-level thinking says, “It’s a good company; let’s buy the stock.” Second-level thinking says, “It’s a good company, but everyone thinks it’s a great company, and it’s not. So the stock’s overrated and overprices; let’s sell.”
First-level thinking says, “The outlook calls for low growth and rising inflation. Let’s dump our stocks.” Second-level thinking says, “The outlook stinks, but everyone else is selling in panic. Buy!”
First-level thinking says, “I think the company’s earnings will fall; sell.” Second-level thinking says, “I think the company’s earnings will fall far less than people expect, and the pleasant surprise will lift the stock; buy.”
At the investment conference at the University of Virginia I attended, Mr. Marks gave a more colorful example of “second-level thinking.”
In the early 1900s in the United Kingdom there was a newspaper competition for the most beautiful woman. Readers were asked which woman was the most beautiful out of a series of candidates.
Marks points out that if you picked the woman you thought was the most beautiful you would likely lose the contest. However, if you picked the woman that you believed most readers would think was the most beautiful you would win.
In investing terms, you could rephrase this as:
“You need to overcome your own personal bias and learn to see how the market thinks about things.”
Or as I like to tell my clients: “It’s not what you think, it’s what the market thinks that matters.”
I mention this because stocks rallied yesterday on the announcement that the Bank of Japan (BoJ) would discuss “unlimited bond buying” at its next meeting.
Those of us who track central bank activity are aware that this is something of a bluff. After all, the BoJ has already effectively nationalized its bond market to the point that on some days bonds don’t even trade anymore.
However, what matters is not what we think… what matters is what the markets think. And the markets think central banks will do anything to reflate the financial system.
The key word here is “unlimited.”
In the last six weeks, the Fed, the BoJ and the European Central Bank (ECB) have issued statements saying they are prepared to buy “unlimited” amounts of bonds.
The implications here are:
1) Central banks will buy the bonds governments need to issue to continue financing their massive social spending programs (the stimulus/ welfare/ loans).
2) Central banks will intervene anytime the financial system is in danger of a deflationary collapse.
Put simply, central banks are stating, “we are ready and willing to buy anything with unlimited funds to reflate the financial system.”
Will it work?
It is so far. Stocks have held up reasonably well despite a rash of truly horrific news. In the U.S. there are now 26 million unemployed. According to the U.S. Chamber of Commerce, 54% of small business are believed to have closed during the shutdown. And 24% have stated they are less than 60 days from going out of business permanently.Bear in mind, that information was published April 3rd, so we’re already over 20 days into that 60-day window.
Again, this is horrific, economic DEPRESSION type stuff. And yet stocks refuse to drop. It’s crazy, but again with investing what matters is not what we think… what matters is what the markets think. And the markets think central banks can fix this mess with interventions.
They also believe it is going to unleash and inflationary storm. Gold is breaking out in every major currency.
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 question is not which woman is the most beautiful but which woman everyone else will think is the most beautiful.”
The man in front of me is a billionaire investor. He is a self-made billionaire. He has actually funded other billionaire investors’ hedge funds. Warren Buffett has publicly admitted that he is one of the few people Buffett “learns from.”
His name is Howard Marks. And suffice to say, I’m all ears.
Marks is discussing the importance of what he calls “second level thinking.”
Second level thinking is being able to think beyond the first level implications of a particular development. Mr. Marks provides several examples of this in his book:
First-level thinking says, “It’s a good company; let’s buy the stock.” Second-level thinking says, “It’s a good company, but everyone thinks it’s a great company, and it’s not. So the stock’s overrated and overprices; let’s sell.”
First-level thinking says, “The outlook calls for low growth and rising inflation. Let’s dump our stocks.” Second-level thinking says, “The outlook stinks, but everyone else is selling in panic. Buy!”
First-level thinking says, “I think the company’s earnings will fall; sell.” Second-level thinking says, “I think the company’s earnings will fall far less than people expect, and the pleasant surprise will lift the stock; buy.”
At the investment conference at the University of Virginia I attended, Mr. Marks gave a more colorful example of “second-level thinking.”
In the early 1900s in the United Kingdom there was a newspaper competition for the most beautiful woman. Readers were asked which woman was the most beautiful out of a series of candidates.
Marks points out that if you picked the woman you thought was the most beautiful you would likely lose the contest. However, if you picked the woman that you believed most readers would think was the most beautiful you would win.
In investing terms, you could rephrase this as:
“You need to overcome your own personal bias and learn to see how the market thinks about things.”
Or as I like to tell my clients: “It’s not what you think, it’s what the market thinks that matters.”
I mention this because stocks rallied yesterday on the announcement that the Bank of Japan (BoJ) would discuss “unlimited bond buying” at its next meeting.
Those of us who track central bank activity are aware that this is something of a bluff. After all, the BoJ has already effectively nationalized its bond market to the point that on some days bonds don’t even trade anymore.
However, what matters is not what we think… what matters is what the markets think. And the markets think central banks will do anything to reflate the financial system.
The key word here is “unlimited.”
In the last six weeks, the Fed, the BoJ and the European Central Bank (ECB) have issued statements saying they are prepared to buy “unlimited” amounts of bonds.
The implications here are:
1) Central banks will buy the bonds governments need to issue to continue financing their massive social spending programs (the stimulus/ welfare/ loans).
2) Central banks will intervene anytime the financial system is in danger of a deflationary collapse.
Put simply, central banks are stating, “we are ready and willing to buy anything with unlimited funds to reflate the financial system.”
Will it work?
It is so far. Stocks have held up reasonably well despite a rash of truly horrific news. In the U.S. there are now 26 million unemployed. According to the U.S. Chamber of Commerce, 54% of small business are believed to have closed during the shutdown. And 24% have stated they are less than 60 days from going out of business permanently.Bear in mind, that information was published April 3rd, so we’re already over 20 days into that 60-day window.
Again, this is horrific, economic DEPRESSION type stuff. And yet stocks refuse to drop. It’s crazy, but again with investing what matters is not what we think… what matters is what the markets think. And the markets think central banks can fix this mess with interventions.
They also believe it is going to unleash and inflationary storm. Gold is breaking out in every major currency.
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 question is not which woman is the most beautiful but which woman everyone else will think is the most beautiful.”
The man in front of me is a billionaire investor. He is a self-made billionaire. He has actually funded other billionaire investors’ hedge funds. Warren Buffett has publicly admitted that he is one of the few people Buffett “learns from.”
His name is Howard Marks. And suffice to say, I’m all ears.
Marks is discussing the importance of what he calls “second level thinking.”
Second level thinking is being able to think beyond the first level implications of a particular development. Mr. Marks provides several examples of this in his book:
First-level thinking says, “It’s a good company; let’s buy the stock.” Second-level thinking says, “It’s a good company, but everyone thinks it’s a great company, and it’s not. So the stock’s overrated and overprices; let’s sell.”
First-level thinking says, “The outlook calls for low growth and rising inflation. Let’s dump our stocks.” Second-level thinking says, “The outlook stinks, but everyone else is selling in panic. Buy!”
First-level thinking says, “I think the company’s earnings will fall; sell.” Second-level thinking says, “I think the company’s earnings will fall far less than people expect, and the pleasant surprise will lift the stock; buy.”
At the investment conference at the University of Virginia I attended, Mr. Marks gave a more colorful example of “second-level thinking.”
In the early 1900s in the United Kingdom there was a newspaper competition for the most beautiful woman. Readers were asked which woman was the most beautiful out of a series of candidates.
Marks points out that if you picked the woman you thought was the most beautiful you would likely lose the contest. However, if you picked the woman that you believed most readers would think was the most beautiful you would win.
In investing terms, you could rephrase this as:
“You need to overcome your own personal bias and learn to see how the market thinks about things.”
Or as I like to tell my clients: “It’s not what you think, it’s what the market thinks that matters.”
I mention this because stocks rallied yesterday on the announcement that the Bank of Japan (BoJ) would discuss “unlimited bond buying” at its next meeting.
Those of us who track central bank activity are aware that this is something of a bluff. After all, the BoJ has already effectively nationalized its bond market to the point that on some days bonds don’t even trade anymore.
However, what matters is not what we think… what matters is what the markets think. And the markets think central banks will do anything to reflate the financial system.
The key word here is “unlimited.”
In the last six weeks, the Fed, the BoJ and the European Central Bank (ECB) have issued statements saying they are prepared to buy “unlimited” amounts of bonds.
The implications here are:
1) Central banks will buy the bonds governments need to issue to continue financing their massive social spending programs (the stimulus/ welfare/ loans).
2) Central banks will intervene anytime the financial system is in danger of a deflationary collapse.
Put simply, central banks are stating, “we are ready and willing to buy anything with unlimited funds to reflate the financial system.”
Will it work?
It is so far. Stocks have held up reasonably well despite a rash of truly horrific news. In the U.S. there are now 26 million unemployed. According to the U.S. Chamber of Commerce, 54% of small business are believed to have closed during the shutdown. And 24% have stated they are less than 60 days from going out of business permanently.Bear in mind, that information was published April 3rd, so we’re already over 20 days into that 60-day window.
Again, this is horrific, economic DEPRESSION type stuff. And yet stocks refuse to drop. It’s crazy, but again with investing what matters is not what we think… what matters is what the markets think. And the markets think central banks can fix this mess with interventions.
They also believe it is going to unleash and inflationary storm. Gold is breaking out in every major currency.
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.
There’s a saying that “in bull markets, stocks don’t sell off on bad news.”
I mention this because the latest jobs data is out and it’s horrific.
Another 4.4. million Americans have filed for unemployment bringing the total the number of unemployed to 26 million.
These are DE-pression type numbers. And yet stocks are holding up despite these numbers.
The S&P 500 last peaked on April 17th 2020. Despite a rash of horrific economic data, the index has barely fallen 6%.
As investors, we have to trade the markets as they are… not as we wish they were. And the market is holding up shockingly well given what’s happening in the world.
Remember, “in bull markets, stocks don’t sell off on bad news.”
What’s even more shocking is the fact that ENERGY stocks are UP more than the broader market this month.
That’s not a typo, the Energy ETF (XLE) is up 16% while the S&P 500 is up 8% in April. And this is happening at a time when Oil prices dropped to NEGATIVE $40!
This again suggests we are entering a bull market. In bull markets, stocks don’t sell off on bad news. The news lately is horrific, and stocks aren’t selling off.
The financial system is now completely addicted to Fed interventions.
As I’ve noted over the last month, the Fed has implemented monetary programs to buy just about every asset class.
As a brief refresher, the Fed is now intervening directly in:
1) The Treasury markets (U.S. sovereign debt).
2) The municipal bond markets (debt issued by states and cities).
3) The corporate bond markets (debt issued by corporations).
4) The commercial paper markets (short-term corporate debt market).
5) The asset backed security market (everything from student loans to Certificates of Deposit and more).
Of the various programs the Fed announced, its daily QE program is the most important as far as stocks are concerned.
The Fed first announced a daily QE program of $75 billion on March 23rd 2020. That was THE day the stock market bottomed.
It then reduced this operation from $75 billion per day to $60 billion per day on April 2nd, and again to $50 billion, then $30 billion the following two weeks. And last week, the Fed announced it would be cutting its daily QE even further to $15 billion.
You’ll note in the chart below that with each reduction in the Fed’s QE programs, the market’s momentum has slowed. The one exception to this was the week of April 2nd to April 9th during which the Fed announced another $2.3 trillion in monetary interventions, which negated the drop in its daily QE programs that week and sent stocks soaring.
What does this tell us?
That the markets are addicted to Fed interventions. Every time the Fed reduces its daily QE programs, stocks lose momentum. It is no coincidence that stocks are red right now, on news that the Fed will be lowering its daily QE program to $15 billion.
If the impact of Fed interventions on stocks is high, it’s even greater on gold. The precious metal has exploded higher in the last month. Mind you, the Fed isn’t the only central bank ramping up the printing presses… gold is exploding higher priced in Dollars, Yen, and Euros as central banks around the world are printing trillions of their currencies.
Gold is realizing that all of this money printing is going to ignite an inflationary storm.
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.
This marks the second Monday stocks will open in the green (last Monday was a green open as well) following two horrifically bad weekend sessions that saw stocks open limit down or close to limit down (March 2nd and 9th).
In the simplest of terms, the panic in the markets appears to be abating. It is clear stocks have broken the downtrend from the panic (blue lines). What is not clear is whether this rally will continue or not.
Stocks stalled out under resistance (red line) last week. A break above that line would open the door to a run to 3,000.
At the end of the day, stocks are actually a minor player in this mess. The BIG story is what happens with the bond markets.
Going into last week, it was clear the financial system was facing a debt crisis. Across the board everything from corporate bonds to municipal bonds were breaking down in a catastrophic fashion.
The Fed managed to stop this massacre by announcing it would backstop everything.
The question now is whether that will be enough. Bonds have staged a major bounce in the last five days, but what happens if they turn down again?
Will the Fed’s announcement that it intends to buy corporate bonds be enough to stop the $10 trillion corporate bond bubble from imploding?
What about the $16-$19 trillion commercial real estate market? Will the shutdown, which has closed so many restaurants and retailers, result in a crisis in this market as businesses begin skipping monthly payments or breaking contracts outright?
And what about the $23 trillion U.S. treasury bubble? Will the $2 trillion in stimulus, which both the President and the Democrats have suggested will be the first of several, be what finally pushes the U.S.’s debt loads into a crisis?
We don’t have answers to any of these questions yet.
The fact stocks have rallied 17% makes investors feel better about things, but it doesn’t do anything to address the larger systemic issues facing the markets today.
Indeed, the only thing of which we CAN be certain is that the Powers That Be are going to address ALL of these issues by printing money.
And that is going to induce higher inflation.
Note that Gold has broken out against the $USD, the Japanese Yen, and the Euro.
This is telling us that the first round of the crisis, the deflationary collapse, will be ending. But the second round, the INFLATIONARY tidal wave, is only just beginning.
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 99 copies available to the public.
This marks the second Monday stocks will open in the green (last Monday was a green open as well) following two horrifically bad weekend sessions that saw stocks open limit down or close to limit down (March 2nd and 9th).
In the simplest of terms, the panic in the markets appears to be abating. It is clear stocks have broken the downtrend from the panic (blue lines). What is not clear is whether this rally will continue or not.
Stocks stalled out under resistance (red line) last week. A break above that line would open the door to a run to 3,000.
At the end of the day, stocks are actually a minor player in this mess. The BIG story is what happens with the bond markets.
———————————————————–
Get a LIFETIME Subscription to All Of Our Products For Just $2,500
An annual subscription to all of our current newsletters costs $1,500.
But today, you can get a LIFETIME subscription to ALL of them, along with every new product we ever launch, for just $2,500.
Going into last week, it was clear the financial system was facing a debt crisis. Across the board everything from corporate bonds to municipal bonds were breaking down in a catastrophic fashion.
The Fed managed to stop this massacre by announcing it would backstop everything.
The question now is whether that will be enough. Bonds have staged a major bounce in the last five days, but what happens if they turn down again?
Will the Fed’s announcement that it intends to buy corporate bonds be enough to stop the $10 trillion corporate bond bubble from imploding?
What about the $16-$19 trillion commercial real estate market? Will the shutdown, which has closed so many restaurants and retailers, result in a crisis in this market as businesses begin skipping monthly payments or breaking contracts outright?
And what about the $23 trillion U.S. treasury bubble? Will the $2 trillion in stimulus, which both the President and the Democrats have suggested will be the first of several, be what finally pushes the U.S.’s debt loads into a crisis?
We don’t have answers to any of these questions yet.
The fact stocks have rallied 17% makes investors feel better about things, but it doesn’t do anything to address the larger systemic issues facing the markets today.
Indeed, the only thing of which we CAN be certain is that the Powers That Be are going to address ALL of these issues by printing money.
And that is going to induce higher inflation.
Note that Gold has broken out against the $USD, the Japanese Yen, and the Euro.
This is telling us that the first round of the crisis, the deflationary collapse, will be ending. But the second round, the INFLATIONARY tidal wave, is only just beginning.
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 99 copies available to the public.
Regardless of what happens with the economy or the virus, the damage has been done to the massive debt bubble. Across the board, credit and debt markets have ended their bull markets.
To fight this situation, the Fed has gone NUCLEAR with monetary policy. In the last three weeks, the Fed has:
1) Cut interest rates from 1.25% to 0.15%.
2) Launched a $1 5 trillion repo program.
3) Launched a $700 billion QE program.
4) Begun buying commercial paper debt instruments.
5) Opened the discount window to the eight largest banks in the US.
6) Opened dollar swaps with international central banks.
7) Opened credit windows to the money market funds market.
If these policies sound familiar, it’s because the Fed basically just ran through its entire 2008 playbook. The big difference this time is that instead of taking a year to do this like it did in 2008, the Fed ran through all of these polices in less than a month.
Thus far, none of these policies have worked.
As I write this Friday morning, stocks have yet to stage a meaningful bounce. As a result, we are now seeing calls for the Fed to start buying corporate debt and municipal debt.
We are also now beginning to see talk of helicopter money being implemented as well, including mailing checks to people who cannot work due to the coronavirus. This combined with various stimulus programs will mean TRILLIONS being injected directly into the financial system.
This is all going to unleash inflation.
Bond yields have begun rising, suggesting the bond market is beginning to discount inflation hitting the financial system.
This is telling us that the first round of the crisis, the deflationary collapse, will be ending. But the second round, the INFLATIONARY tidal wave, is only just beginning.
We just published a Special Investment Report concerning FIVE secret investments you can use to make inflation pay ou 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.
2) Launched over $700 billion in Quantitative Easing (QE).
3) Launched a $1.5 TRILLION repo program.
4) Launched another $1 trillion repo program.
5) Announced it will begin buying commercial paper (short-term corporate debt).
6) Allowed primary dealers to start parking assets, including stocks, as collateral in exchange for short-term credit.
7) Opened Euro-Dollar swaps (this implies systemically important banks in Europe are in danger of collapse).
Under any set of circumstances, the above set of policies would be considered the NUCLEAR option. The fact that the Fed has launched ALL of these in the span of three weeks is beyond incredible.
In the simplest of terms, the Fed has effectively used up ALL of its ammo in less than a single month. At this point, there truly is not much else the Fed can do.
And the markets continue to implode. As I write this, the futures markets are once again LIMIT down, meaning they had to be frozen after falling 5%.
Enter former Fed Chairs Ben Bernanke and Janet Yellen.
In an opinion editorial piece in the Financial Times this morning the two former Fed Chairs urged the Fed to begin buying corporate debt and stocks.
Currently the Fed is forbidden from doing either as per the Federal Reserve Act. Put another way, congress would need to authorize the Fed to start buying these assets.
The two former Fed Chairs are providing the political cover to do this. I fully expect the Fed to begin outright buying stocks, corporate debt, and other assets within the next six weeks.
Put another way, the Fed is going to begin going what some call “Weimar-Lite” or effectively buying everything.
This is why bonds are dropping across the board despite the clear signs that the financial system remains under MAJOR duress… bonds realize that the fed and other Central banks are going to opt for INFLATION to stop the crisis (and I’m not talking about the plain vanilla 2% per year kind).
The time to start preparing for this is now. The crisis is not over… if anything it is just beginning.
In light of this, 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).
As I write this there are less than 50 copies left available to the public.
The market dip I wrote about last week has finally hit.
Breadth warned this was coming last week, when it struggled to go vertical mid-week. We have a megaphone formation in place that suggests we’ll see a bit more downside here.
Breadth leads stocks, and this formation suggests stocks won’t find a lot of support until we get to 3,250 or so.
If that doesn’t hold, stocks have additional support at 3,220, 3,150 and finally 3,025.
Personally, I don’t believe we’ll break 3,225 before the Fed intervenes.
The coronavirus outbreak has given central banks the excuse they needed to begin intervening in the market more aggressively.
Gold had already begun to pick up on this.
Starting last week, the precious metal began to discount a LOT more money printing coming from the Fed.
Moreover, the odds are EXTREMELY low that President Trump is going to let his beloved stock market crash during an election year.
Which is why we can all but guarantee a MASSIVE Fed intervention is coming. And when it does the stock market will roar higher.
I want to be clear here.
I DO NOT care about politics. You can hate President Trump or you can love him. That’s 100% up to you.
But the reality is that under the Trump administration the stock market is giving us a once in a lifetime opportunity to GET RICH from our investments.
My clients are already doing this with our new special report titled…
The MAGA Portfolio: Five Investments That Will Make Fortunes During Trump’s Second Term.
In it, I detail five HIGH OCTANE investments that are primed to EXPLODE higher when President Trump wins a second term.
In it, I detail five unique investments that I expect will produce the most extraordinary gains during President Trump’s second term.
Each one of these investments is in a unique position to profit from the combination of Trump economic reforms and Fed monetary easing, combining high growth opportunities with extreme profitability.
We are offering this report exclusively to subscribers of our e-letter Gains Pains & Capital. To pick up your copy please swing by:
The Trump administration just fired a warning shot at Jerome Powell
As I noted last week, the President has implicitly told the Fed to start easing now with a tweet concerning inflation.
Ignore the media’s portrayal of the President as being a dunce… or that he doesn’t understand inflation. This was a clear signal to the Fed… “EASE NOW.”
Apparently the Trump administration has decided that an implicit signal wasn’t enough… so yesterday they made their intentions EXPLICIT.
Yesterday the following headline hit the newswires around mid-day…
White House explored legality of demoting Powell from chairman.
As if that wasn’t clear enough, the President himself, when asked about the possibility of demoting Jerome Powell, stated… “let’s see what he does.”
The message here is clear… “EASE NOW OR YOU’RE FIRED.”
Whether Powell actually eases or not has become an afterthought… because the reality is that if he does not, the President will replace him with someone who will.
Put simply, the Fed is about to ease in a big way… whether it’s today… or a few months from now.
All of this is going to unleash a tsunami of inflation.
The Fed was already talking about unleashing non-stop Quantitative Easing, cutting interest rates to negative and more BEFORE the President got involved.
Can you imagine what the Fed will do now that President himself is pushing for higher inflation?
On that note we offer a Special Investment Report concerning FIVE 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
The Trump administration just fired a warning shot at Jerome Powell
As I noted last week, the President has implicitly told the Fed to start easing now with a tweet concerning inflation.
Ignore the media’s portrayal of the President as being a dunce… or that he doesn’t understand inflation. This was a clear signal to the Fed… “EASE NOW.”
Apparently the Trump administration has decided that an implicit signal wasn’t enough… so yesterday they made their intentions EXPLICIT.
Yesterday the following headline hit the newswires around mid-day…
White House explored legality of demoting Powell from chairman.
As if that wasn’t clear enough, the President himself, when asked about the possibility of demoting Jerome Powell, stated… “let’s see what he does.”
The message here is clear… “EASE NOW OR YOU’RE FIRED.”
Whether Powell actually eases or not has become an afterthought… because the reality is that if he does not, the President will replace him with someone who will.
Put simply, the Fed is about to ease in a big way… whether it’s today… or a few months from now.
All of this is going to unleash a tsunami of inflation.
The Fed was already talking about unleashing non-stop Quantitative Easing, cutting interest rates to negative and more BEFORE the President got involved.
Can you imagine what the Fed will do now that President himself is pushing for higher inflation?
On that note we offer a Special Investment Report concerning FIVE 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
The Trump administration just fired a warning shot at Jerome Powell
As I noted last week, the President has implicitly told the Fed to start easing now with a tweet concerning inflation.
Ignore the media’s portrayal of the President as being a dunce… or that he doesn’t understand inflation. This was a clear signal to the Fed… “EASE NOW.”
Apparently the Trump administration has decided that an implicit signal wasn’t enough… so yesterday they made their intentions EXPLICIT.
Yesterday the following headline hit the newswires around mid-day…
White House explored legality of demoting Powell from chairman.
As if that wasn’t clear enough, the President himself, when asked about the possibility of demoting Jerome Powell, stated… “let’s see what he does.”
The message here is clear… “EASE NOW OR YOU’RE FIRED.”
Whether Powell actually eases or not has become an afterthought… because the reality is that if he does not, the President will replace him with someone who will.
Put simply, the Fed is about to ease in a big way… whether it’s today… or a few months from now.
All of this is going to unleash a tsunami of inflation.
The Fed was already talking about unleashing non-stop Quantitative Easing, cutting interest rates to negative and more BEFORE the President got involved.
Can you imagine what the Fed will do now that President himself is pushing for higher inflation?
On that note we offer a Special Investment Report concerning FIVE 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
Yesterday’s article outlined how overly hawkish Fed policy burst the Everything Bubble…
The Fed is now in the process of trying to “patch” over the bursting bubble, to stop the financial system from experiencing another crisis.
And President Trump just “signed off” of the Fed’s plan.
You see, according to the Fed’s Dual Mandate (the mandate as issue by the US Congress to the Fed in 1977), the Fed is meant to pursue two things:
1) Price stability (controlled inflation)
2) Maximum employment (economic growth)
It was the Fed’s attempt to accomplish this in 2018 that lead to the Everything Bubble bursting…
At that time, the Fed believed inflation was getting out of control… and that economic growth was raging hot…
So the Fed embarked on its most aggressive monetary policy in history…
First it hiked interest rates four times per year.
Secondly it shrank its balance sheet at a pace of $50 billion per month… or $600 billion per year.
By the way, when the Fed shrinks its balance sheet by $200 billion, it represents the equivalent to another rate hike…
So the Fed technically raised rates SEVEN times in 2018 (four rate hikes plus a balance sheet reduction of $600 billion).
This burst the Everything Bubble, with yields on US Treasuries breaking out of their 30+ year long-term downtrend.
And because the US economy is so saturated with debt… this increase in yields began to hurt the economy as well (debt payments rose, cutting into cash flows).
This is what prompted the Fed to completely abandon its hawkishness at the end of 2018…
Since that time, the Fed has begun crafting a plan to “patch over” the leaking Everything Bubble.
That plan consists of the Fed dropping the inflation component of its Dual Mandate… and pursing economic growth regardless of whether or not it unleashes higher rates of inflation.
And the President just “signed off” on this plan… publicly via his Twitter account.
As usual the talking heads will ridicule the President, saying he doesn’t understand inflation… or some other insult.
The truth is, this was the President openly telling the Fed to pursue growth by any means necessary…
Put another way… the President of the United States told the US Central Bank… “start stimulating NOW.”
The Fed is already talking about unleashing non-stop Quantitative Easing, cutting interest rates to negative and more…
Can you imagine what the Fed will do now that President himself is pushing for higher inflation?
On that note we offer a Special Investment Report concerning FIVE 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
