After a while you start seeing it everywhere!
Not because you imagine it, because it was always there all around you; but you just didn't notice it before.
Another interesting chart, the tricky question is, when is it time to make the shift?
In my opinion, we could go a VERY LONG time in this very low range of commodity prices. The amount of debt does NOT allow for higher commodity prices, we must stay in a very low/no growth and deflationary economy. If commodity prices move higher, bonds yields would also move higher, obviously that can NOT happen.
With that being said, the ratio could move higher as the SP 500 moves lower at a faster rate than commodity prices. So the trade is really going to be short the SP 500 and stay away from commodities or hard assets.
Does anyone ever notice that if we're supposed to be in a booming economy, why are commodity prices still in a massive bear market hardly off the 2015 lows?
My bet is they're going to let the stock and real estate markets go down, and preserve the bond market. It's really the only option, interest rates will go negative and the ability to issue new debt will not be a problem. All of this will put the general economy into a recession/depression for many years. If people have cash they will be in good shape because prices will be much lower.
Trump and his rhetoric will not make any difference at all. There will not be any meaningful tariffs, trade deficits are NOT going lower. There will not be any infrastructure spending. There will not be any jobs coming back to the US. There will not be any wage growth. There will still be massive amounts of BOTH illegal and legal immigration.
Trump can cry about the rising US dollar, but he will be nothing more than a spectator as the dollar hits new highs. The Euro is still around 1.17 today, it's so overvalued to the dollar it's just plain silly. I could see the Euro down to .70 in a few years, where does that put the dollar index? 125 area.
There's going to be no higher yields, no stimulus, no inflation. The plan has already been made. Deflate the debt away.
zman welcome back. Thought for sure you’d given up on this site and left. US dollar still king, check.
I don’t think the govt has as much control of markets as you give them....they can rig things in a short term but not a long one.
Only 4% bulls according to some sentiment indicators, A start of an interim rally now or do we have to wait until summer doldrum ends.
Or are we about to slide down into the abyss
I think if a debt deflation event is about to happen it will be short lived or the American people will stick a pitchfork in most politicians including Mr Trump.
AM linked to a video with a sell out of US treasuries from Russia. Is it a far fetched thought that they will buy gold with the money acquired? More countries to follow?
HappyNow wrote: zman welcome back. Thought for sure you’d given up on this site and left. US dollar still king, check. I don’t think the govt has as much control of markets as you give them....they can rig things in a short term but not a long one.
Thank you, it's nice to be back!
It's not that I think the govt has the ability to directly "control the markets", I believe they have the ability to push investors into certain areas and out of other parts of the market.
Sending millions of decent paying jobs out of the US and then inviting tens of millions of immigrants into the US labor market is deflationary, that policy pushed investors into the bond market for many decades. Is that direct control of a market? No, but it's a very powerful economic policy that moves a market.
The people in power are in a corner here because of the debt monster, the options are not good regardless of the direction they chose. I just heard Trump a few days ago at his political rally saying there's a "shortage of labor" and that he's for bringing more immigrants into the US based "on merit". That's wonderful, I'm sure my niece with 100k in student debt will love to compete with some highly educated worker from China or India for some position in the medical field.
In my opinion, they rig policy- which rigs in the markets. They say one thing and ultimately do another.
I also could be very wrong, we could see a downturn followed by some huge stimulus program that devalues the dollar and creates real inflation. My belief is that we didn't get here by accident, the greed from the top is never ending and I doubt that they're going to be nice at some point. Time will tell.
Solsson wrote: Only 4% bulls according to some sentiment indicators, A start of an interim rally now or do we have to wait until summer doldrum ends. Or are we about to slide down into the abyss
Gold & Silver Price Update - July 25, 2018 + Silver Below $13??
I think if a debt deflation event is about to happen it will be short lived or the American people will stick a pitchfork in most politicians including Mr Trump. AM linked to a video with a sell out of US treasuries from Russia. Is it a far fetched thought that they will buy gold with the money acquired? More countries to follow?
AM linked to a video with a sell out of US treasuries from Russia. Is it a far fetched thought that they will buy gold with the money acquired? More countries to follow?
"will stick a pitchfork in most politicians including Mr Trump"
You could be correct here, but I have my doubts. The elite have absolutely no respect for the US population at this point, they fear nothing from them.
At least in Greece, those citizens hit the streets and did things which I won't even mention to stop their potential enslavement.
In the significant scales with one possible walk forward outcome.
this is one of your better posts
I could conceive of Trump doing a massive stimulus right before the next presidential election, and who knows about helicopter money. Dave Rosenberg of Gluskin Scheff said if they did that, he would change his name to Goldenberg
I guess the real question is are we going to get deflation or inflation??? and are we in the eye of the hurricane right now waiting for the winds to change. Is it long bonds and dividend stocks or equities in general, real estate and commodities?
That is the 64,000 question!!
Silver66 Rage against the dying of the light
silver66 wrote: this is one of your better posts I could conceive of Trump doing a massive stimulus right before the next presidential election, and who knows about helicopter money. Dave Rosenberg of Gluskin Scheff said if they did that, he would change his name to Goldenberg I guess the real question is are we going to get deflation or inflation??? and are we in the eye of the hurricane right now waiting for the winds to change. Is it long bonds and dividend stocks or equities in general, real estate and commodities? That is the 64,000 question!! Silver66
"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.
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.
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
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.