zman wrote: ... "deflation or inflation???" I think one of the best measurement tools is the Gold/Bond (30 year) ratio. If someone wants to put up a chart, it will clearly show that deflation is winning. We are not far from breaking the Dec. 2015 lows.
I think one of the best measurement tools is the Gold/Bond (30 year) ratio. If someone wants to put up a chart, it will clearly show that deflation is winning. We are not far from breaking the Dec. 2015 lows.
Actually that battle is on right now.
Here is something I created a little earlier today when talking to someone:
GLG:TNX above GLD:TYX below.
As you can see, based upon the overhead resistance being contested now, and when this trading level was originally fought over, this particular measure of comparative value has already returned to where it was circa 2008 and also 2010.
A lot of gargantuan effort by the monetary powers for what? They bought time with other peoples' money. The tide still turns when it's ready to.
A decade of no significant net change of GLD vs US bonds....
Good post by anonymous poster, I am suspicious about Trump and other governments in the west. I couldn't have said it better myself lol
"There's an easy way to fix a valuation crisis, where prices across the board are excessively elevated. The answer is to devalue the currency. To do that on a global scale means raising the cost of living and lower wages for the little guy, thus maintaining the post-fiat, positive inflation model. What better way to inflate an economy than with back firing trade tariffs. And to get incomes rising, simply increase minimum wage limits and impose a living wage on everyone.
Historically when modern governments can no longer naturally garner positive inflation or growth they turn to money printing and market interference. Printing trillions of dollars has goosed the high end of the economy so now perhaps it's time to balance valuations against CPI by introducing trillions of dollars of reflected global tariffs and maybe a living wage.
Tighten security, wrap up censor in some kind of anti-terrorist law and voila you have control of dissension. Put a (different) patsy government in place, one willing to be hated, long enough to start the trade war then replace it with an extreme left nanny-crat who wins the presidency on the bribe of a base wage for all. An electorate driven by media and desperate for a change will swing in the opposite direction as sure as a pendulum changes sides, and vote for anyone.
It's not a conspiracy theory it's just business as usual for the clientelist, dysfunctional, full-suffrage, Hollywood driven global political system we erroneously call democracy."
Yet, there is no devaluation of the US dollar. If the dollar were to be devalued it would destroy all of the benefits of globalization it provides to the elite. The elite aren't going to shoot themselves in the foot.
"trade tariffs" The current tariffs are meaningless and will hardly make even a small dent in the trade deficit. This is all talk and no action.
"get incomes rising" The people in power do everything in their power to keep wages down, real wages are going to continue to decline.
"impose a living wage" Not gonna happen. Automation, illegal/legal immigration and the outsourcing of US jobs will continue to keep wages from rising. There's "no shortage of labor", that's pure propaganda.
What people have to understand is that the people in power haven't failed at stimulating the economy and to help the working class, they did this on purpose. They don't want higher wages for workers, they never have.
zman wrote: Yet, there is no devaluation of the US dollar. If the dollar were to be devalued it would destroy all of the benefits of globalization it provides to the elite. The elite aren't going to shoot themselves in the foot.
It's difficult to tax people in a deflationary environment so I think they will try the inflation trick big time.
There has been heavy devaluation of the dollar for decades compared to real money:
The US dollar has lost 80% of it's purchasing power since 2001 compared to the currency of Switzerland
almost at a new ATH, this trend is not over yet.
"It's difficult to tax people in a deflationary environment so I think they will try the inflation trick big time"
If they were concerned about collecting the proper amount of taxes, we wouldn't have over $21 trillion in Federal debt and another $7 trillion in state and municipal debt, and tens of trillions of unfunded liabilities. The US doesn't tax the rich enough, this has NOTHING to do with inflation. It's pure greed and nothing more.
At this stage of the debt bubble, tax collection isn't the main priority. The main priority is interest rates!!!! Just think if interest rates were to be normalized (10 year bond at 6%), what would the interest payments be on the Federal debt? Over one trillion dollars, that would outpace any form of tax collection due to inflation in my opinion. What would happen to the value of all of the federal, state and corporate debt which is mainly owned by the elite? It would be destroyed, not gonna happen under their watch.
Do you really think the elite are going to let the peasants inflate their trillions of mortgage, auto, student, and credit card debt away? No chance in hell.
We can't have any form of real economic growth or inflation, it's NOT gonna happen. Look at the EU today, mostly all negative bond yields until you reach a 10 year bond which goes to about .30 to .80%. The EU now has a balanced budget with austerity. There is no growth or inflation in the EU today, that's where the US is headed. The EU is truly deflating their debt away, they have no choice.
"there has been heavy devaluation of the dollar for decades compared to real money"
Yes, over a very long period of time the devaluation is obvious for all to see. The problem is that people don't have a long enough life to invest against that loss of purchasing power. In my opinion, there is absolutely no pure hedge against the higher cost of living in a first world nation, it doesn't exist. Yes, if one were to own gold for 50 plus years, they might be able to at least breakeven at best.
Is it right on time or is it random ?
Whose interests is it serving ? the political class or the money class, who is pushing back and who is defending ?
Inquiring minds want to know
Silver66 Rage against the dying of the light
Why in the world would the UK hike interest rates after having a .2% GDP in the 1st quarter? Something is at play here and it's not good.
Some great posts above.
A shortcut link to a very important post about time that I made earlier today over in the DOTS forum: #24317 the link will take you there if you wish to read the posts by others in that conversation before and after this one.
But here is the body of it now:
Solsson brought up a couple of different treads in his post. .....
Today let's look at time, in particular timepieces.
I assert that if you use one of these you have a BIG filter between yourself and the real world if you chose the wrong kind:
The one on the left looks high tech, with precise sub-graduations and clarity of display. But the type on the right actually is the far better instrument. The digital timepiece is a countdown or a "count-up" display, as for eg a rocket launch sequence. The analog timepiece is a rotational display whereby each unit is displayed both separately as well as together. Let me explain what I just said there: if I were to ask you to let me know when it is 1/3 of a minute into the first 1/3 of an hour and tell me when we are 3/4 way through that minute please - what do you have to do? With the digital watch you are now reaching for a calculator. With the analog timepiece you say no problem, because you don't need the numbers at all to know what's happening.
But the analog watch is superior for daily time and defaults to a number for the date of the month.
So it should have an extra hand for day of week, and date of month, and so on ... for bigger scale time.
What do you do when you want to go to "bigger time"? You probably look at this:
Now what have we got? An analog on the right and a table on the left. So I say let me know every third day please, at the 1/3 of the hour and 1/3 of minute etc. What mental gymnastics do you have to do to figure that out?
And if I said: "find a day of next month" you click and this month promptly disappears. So you lost the present and the past to see just a little bit of future? That's silly. Say you went to buy an automobile, and the fellwo shows you a car on which one wheel was a wheel, and the next was a tank track, the third was a skateboard and the 4th wheel had a snowsled stuck in the wheel arch - would you buy that stupid thing and expect it to work properly for you?
But you accept these crappy time measurement systems WITHOUT A THOUGHT. Start thinking today!
This is hobbling yourself. Trying to see the world by looking out through a keyhole in the front door.
Let's look at a proper timepiece for longer term time. I will let Solsson's post above about the 5-point star determine my choice for the first example:
Venus Transit Orrery - Objectivity #7
That is a "watch" or "clock" that shows the pentagram being drawn. Albert Pike and many others think it means something else. Let them think what they want. Insight is scarce.
What about "bigger" time?
How about this:
Handmade Brass Tellurion Orrery, Three Planets.
This one goes up to almost two years (on the big hand!). But a clever trick allows time measurement up to eight years with this timepiece. That is when all the hands of this clock return to the same positions relative to each other.
Here is one that goes to 247 year time units:
The Nine Planet 'Genesis Orrery' with orbiting moons
But, since an analog clock has hands you could look at "half past the hour" and use the big hands at their half way thirds way, and fractional positions, to know that time unit by looking at the angle of the hand.
And at you raised level of consciousness, time is now measured in degrees. eg a hand at 90 degrees = 1/4 past noon of whatever timeframe you are considering at that instant.
And you wil learn what the cross in symbology is really about. Not religious stuff, and not nazi stuff, not "alt-right" and not any other political BS garbage put out by the ruling class and it's recruited disciple-activist-agents to obfuscate the true meaning of the cross which is the 1/4 segments of every time unit, all of them )
The great thing is, we don't have to buy an orrery-clock (though I always wanted to own a turn-per-day one for myself!) because this clock is above our heads. Just look up at the big clock in the sky.
Charts next ...
Personally, I find both arguments (inflation and deflation) compelling.
But I wonder about stagflation? As I understand it, stagflation is the worst of both worlds. I borrowed the following definition from Investopedia:
"Stagflation is defined as slow economic growth occurring simultaneously with high rates of inflation."
Does anyone see the possibility of stagflation in our future? I don't recall any particular movement in gold or silver during the '70's when we were enjoying stagflation in the United States.
Argentus, I really enjoyed your piece on time and telling time and the filters we put between ourselves and the world around us. Thank you.
Remember Brother John F and all the YT videos about silver he used to make?
Well, it looks like his site is gone, and that URL redirects to Mike Maloney's site now.
I don't know how he is himself, but I hope he's ok.
Hat tip to Rahul at AltInvestorsHangout for the info.
A long term US stocks cycle I like to keep track of rises towards inflection (top or invert):
I marked the cycle through it ducks and dives through recent inflections. If let run unfettered it would average just under 20 years between lows, or highs, and 9.5 to 10 year super trends from lows to highs and vice versa.
Naturally this does not suit Wall St anf it's member s running the Federal Reserve so they play some games with it. But it still tells me when it's time to be watching this one pretty carefully for the coming weeks. And that's all I need.
Let's just call the present situation "sensitive"...
While I do hope BrotherJohnF is ok, I thought he was pushing analysis past his capability. I emailed when I noticed some inconsistencies or what could be mistakes and received an entirely unsatisfactory response. I concluded bias so I stopped looking at his stuff.
Also, Here’s to analog watches. They work with my brain so well to relate time, after all it is seldom this present moment we are interested in when we look at our watch or calendar but this moment in relation to future or past.
You're right. He was out of his league. Especially with regard to the scale of the decline that had initiated.
In this way he might have been counterproductive to his followers. But alternatively he may have raised their levels so as to reduce their vulnerability to the bear market. Good for them or bad for them? Who can tell? So it is hard to pass judgment, and I am not inclined to do that. He could draw a nice chart. He was cognizant of semi numismatics as an added value factor, which it was at the time. I wonder what a longer term chart of premia would look like, but I don't have one. Invitation to old hand PM dealers to post a pretty chart of margins ... pretty please!
If the decline had been of a smaller scale, BroJohnF and others strategy of buying interim and medium term lows (or price weakness, however it is described ) would have begun to work at an earlier stage.
Managing the scale of the waves and wavelets in trading/investing is the hardest thing. Actually did you see what I just did? I typed "trading", paused, then added the slash and typed "investing". This is a concession to readers who have not got it (yet) that trading is investing and investing is trading. But I know full well that to type one word without adding the other will cause some eyes to turn away with the thought "this is not my scene". The difference between trading and investing is ... scale!
So I'm even managing the market's scale in the words I use to communicate to readers! Think about that! This is a connection between timing the market, naming what is being done, and brainwave frequency within the heads of readers of the description. And people claim this is more about controlled markets than it is about the inner mind workings!
Well, I want to get back to my main point: BrotherJohnF appears to have left the pubic stage. This is indicative of a segment of silver bulls leaving the silver market. Presumably they sell their asset and acquire cash (but less than before) or a better improved more flashy (just linguistic messing!) asset instead of that old silver. And when the asset is eventually back in the right pockets the funnymental economic driving "facts" will begin to appear in those streams of communication we like to call "news".
It's a milestone we need to see as we move along the mighty bear's road, a necessary phase marker.
I wonder exactly where we are in the slow capitulation of retail precious metals bulls? Silver and gold are giving me slightly different (long term) signals at the moment you see.
"I wonder exactly where we are in the slow capitulation of retail precious metals bulls?"
Unfortunately, the retail PM investor still remains very bullish in my opinion. They fall into two different camps, but both groups remain wrong.
Camp 1. The reflation trade- These investors think inflation is going to an issue down the road. They see higher commodity prices, higher bond yields, a weaker dollar and a growing economy.
As we know, none of those moves can happen with the levels of debt we have in economy. Commodity prices still remain super weak off the 2015 lows, bonds yields still can't breakout higher and the US dollar continues to trade higher. The central banks and Congress will make sure deflation remains in full force.
Camp 2. The economy turns lower- These investors think the stock market will tank, deficits will soar and the economy will go into a recession. The PM bull believes that the Fed will somehow come to the rescue and "print money" to save and gold will have its day.
As we know, the last time the economy tanked the Fed did come to the rescue and printed money to bailout the assets owned by the elite, none of that money ever went into main street. I would expect the same IF the economy were to turn down again. Buying assets owned by the elite with printed money does NOTHING in the real economy.
In my opinion, the real capitulation occurs when PM bulls finally realize when the economy slows down and there's no white knight to save the day. They will see massive deficits and growing debt, yet bond yields will trade lower. They will see a strong dollar despite growing debt and a weak economy. They will see no stimulus, but instead massive cuts to social benefits. They will realize that "helicopter money" never was part of the plan. Where does gold trade at that point? My guess is much lower than the 2015 lows.
AM. Thanks for your comment. I need to add to my previous comment. BrotherJohnF did contribute greatly to how I was looking at charts, so therefore likely many other followers were educated as well. His analysis was well thought out and he was able to walk us through it in fairly ordinary language. I eventually concluded he was allowing a fair amount of bias to influence his interpretation so I wandered away....after learning much!
It is a shame that capitulation of bulls is necessary.
The physical stacks bulls own represent an elastic supply and while it would take a monumental redemption to affect spot price it would take much less to influence the local buy/sell prices and margins. Is anyone tracking the number of coin shops opening/closing or the discount vs spot that the LCS offers when buying back the shiny?
I will admit to ignoring Nick Z back in 2013, I paid a pretty heavy price. I'm not sure the outcomes are as binary as he suggests, but both out comes are certainly possible.
zman I think there’s another pm bull camp. TSHTF. This is not far from the 2nd one you listed but different because it does not depend on what government does or doesn’t do. It depends on what ‘people’ do. A belief that people in general stop believing in governments and look for something to save them, finding among other things gold and silver. This camp will always believe in the white knight, taking the form of ‘people’ (who have lost faith in government) and people’s behaviour cannot be denied.
Look at this guys, the US trade deficit comes to grow larger. IF the US put up real tariffs the markets would be trading so differently.
1. The stock market would tank due to the loss of profits.
2. The bond market would tank due to real inflation.
3. The gold market would soar because of the chaos and inflation.
So when is Trump going to solve this trade issue? Never going to happen.
Anyone hear about that HUGE infrastructure program lately? Never going to happen.
What about all that overseas cash coming back to the US to build new plants, hire new people and give out big raises? Never did happen.
What about helping the students with $1.5 trillion of debt with super higher interest rates (9-12%)? No, they changed the rules and students can no longer deduct the interest paid on the loan, which is most likely most of the payments.
So screw the poor ex-students and reward the companies with the corporate tax cut, talk about another deflationary policy.
Social commentary post:
Love them or hate them, by merely turning up Molyneux and Southern have caused New Zealand's SJW network to reveal its ideological intolerance to open discussion, and its ability to control beyond its membership.
Moving away from the NZ angle. They are right wing for sure, but they are certainly not racist or far right since they both advocate debate. Provocatively Right is possibly a good description. Is that merely not backing away from a provocative left! So, how much should the contest for good ideas be managed for the benefit of potentially violent leftists under the banner of causing a civil disturbance? It appears that legal pandering to the left has been quietly introduced in many countries now, which may be indicative of a legal system compromised to protect a multiculturalist cadre in the establishment.
This whole thing, I mean SJW brownshirt type control of post-democracies everywhere, is fast becoming reminiscent of a modern version of the run up towards the medieval witch trial period. That was supervised by a dominant sharia-esque Vatican capable of credibly threatening sovereign rulers of that era.
That human mania took the form of the vilification of anybody perceived as insufficiently compliant, and setting up a kangaroo religio-anti-magick court system to inflict punitive torture and death upon those unfortunate enough to be accused by anybody at all.
Here is a sobering thought:
Should this SJW mob trend not reverse soon - if instead it should cascade up to a higher fractal scale into a politico-religio-SJW-ism- think about that possibility for a moment. For critical thinkers many locations would become unsafe to live in, quite soon. I suppose this is one possible seed kernel for the war peak I unfortunately expect 2o25-2028.
We could easily already be within a high enough fractal scale of excess to get there, if multi century low bond yields are any guide to excess of society, several social extremes which come to a head this time round will be of historic cyclical proportions.
argentus maximus wrote: ... Hat tip to Rahul at AltInvestorsHangout for the info.
In case you're not familiar, Rahul's channel can be found here: