My thesis from my last post remain unchanged. The best way to protect yourself from the coming economic storm remains Gold, Silver, Bitcoin and Chainlink (LINK).
I’ve not posted to this site in months. I’ve engaged in significant self reflection on the posts I’ve made and the opinions I’ve shared with friends and family that there was no way that the broad stock market would have a “V” shaped recovery. It did. I was undeniably wrong! What went wrong? Why was I so jacked up?
Made the third classic blundere. The first two blunders can be found here: https://www.youtube.com/watch?v=7LUUk6wVNrY
The third blunder is “Do not fight the Fed!” I think the validity of that rule will soon be suspect- but for now, it holds true.
There is a reason for the “V” shaped movement of the stock market- its false. It is based in digital dollars created out of thin air and the proclamations of the US President and the Fed Chief to do what ever it takes to prop up the stock and bond markets. The right side of the “V” that began in April is of almost the exact angle as the growth of both the US Debt and the Fed balance sheet combined. So yes! The market has scorched higher. Not due to economic activity by due to artificial and temporary intervention.
There are NO underlying fundamentals pushing the market higher- the only thing driving this nonsensical rally is the idea that somehow the US Government and the Federal Reserve have become the ‘Greater Fools.’ Why not push Tesla $1000 higher than what Elon Musk said in Feb 2020 was ‘fair value’? Why not? If the USG is going to flood the field with cash and seemingly remove risk! Tesla is not a financially viable company! But, since early April, its been a fantastic stock to own. The disconnect between reality and what has really happened dollar wise to many equity assets will soon stop diverging.
The US economy is in contraction. COVID 19 in the US has been incompetently managed. Perhaps that is too generous. The fact is that COVID was never managed as a National Response. Scientists were ignored and the entire disease somehow managed to become politicized by the Idiocracy that is modern US body politic. All the while, the Government is printing money like drunken fools. The underlying assumption is that the USG will somehow manage to get this right and the economy will resume as it usually does after recessions. That is an IF that I cannot abide.
I anticipated that between 2027-2030 there would be a shift from dollar dominance of world trade to a new global reserve currency. I suspect that shift will be much sooner- if not already starting. Why on Gods Green Earth would any nation trust the US to manage the Reserve Currency, when the vast majority of the Citizenry and the institutions of the Federal Government have quite clearly gone mental?
The polarized incompetency of the US ruling class has created the conditions for Nations that are not totally financially incompetent or as looney as the U.S.A. to seek a new form of reserve currency that is divorced from the USD and all the baggage of Washington DC. Most Americans do not understand (and will not until its lost) the significant global advantage it has enjoyed as the Reserve Currency since the end of WWII. Losing that status will impoverish most.
Not sure what that new Reserve Currency will be. I suppose nobody is. I suspect that a legitimate Free Market will decide that issue. So to hedge the bet- a little bit of old and a little bit of new… Gold, Silver, Bitcoin and Link are the best bets moving forward. The Fed and insane amounts of stimulus can only go so far- and those opiods will lose potency sooner than later. This fall is going to be ugly. Bears make money, bulls make money and pigs get slaughtered. This fall, its doomsday for the pigs. If you were smart enough to run this artificial “V” up to these levels… don’t be a pig. Take some of that and GSB-LINK that cash to an asset class that might survive the pending Reckoning.