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:
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."
Debt destroyed for the elite, I think they would embrace that outcome. Maybe Mr T was hired to destroy US debt?
"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. "
Maybe if they still came out on top gaining 1000times more than us. How about an asymmetric debt deal by the elite. We keep the old currency for our savings and get our debt re-structured with a new currency haha ... where is my pitchfork again,
"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. "
No in just 10years! Look at the charts I posted, gold went from $350 to $1900, that is +400%! With a little bit of knowledge you could have gained a fortune for the last decade and a half. The Swedish government introduced some very aggressive reforms regarding capital management a decade ago. For a Swede with a little bit of interest in cap.management it has been quite easy to do great. It is as if they wants to create a society with extreme class distinctions. See the elite and a reasonable informed middle class gaining together.
Gold has been the answer to devaluation for the last 18years, look at the charts again. Gold will still be the answer for the decade to come.
Here is a camp3 dude, SHTF scenario:
I am not sure about this, but are all the money that has been printed the last decade already being spent? I don't think so, it is still sitting on major banks balance sheet. Ready to be injected into the economy when we will get the next credit freeze, debt implosion. The big banks are not allowed to use the money. They are waiting for a signal from the CB's.
The Bearish camp (the moving average gurus) are growing:
Aaron Christopher = at iGold is Bearish
Jordan Roy-Byrne = The Daily Gold is Bearish
Rombus = at Goldtent is Bearish
Ronnie Fattal is bearish ...
the path to $1000 gold is open ...
Oh, Bo Polny was wrong about a gold&silver spike in July. He is now pumping bitcoin only
Jim Willie is on fire, he thinks that US needs to source gold a.s.a.p
Thoughts on QAnon by Lee Stranahan.
This is a nice summary of a good chunk of my thoughts on this Trump/Republican administration psyop.
People get "educated" by this new Q, who is NOT the original Q, in the things we are already aware of. And due to their "new patience on account of the ongoing invisible progress behind the scenes" the administration gains more time to achieve its work. So instead of being critical at lack of effective change, they wait. Who does that benefit?
Got to give Stranahan credit. He introduces the cold reading phrase in this video.
I wonder how many Q enthusiasts will suddenly see the phraseology used in Q reports that went unnoticed before, for what it is, after watching this. probably not that many.
Here is a hint: Whenever you notice the words "Yes, but ..." coming out of your mouth, you need to stop and have a re-think of accepted (as true and reliable) narratives within you that are of dubious quality.
"Debt destroyed for the elite. I think they would embrace that outcome"
I can't see how large owners of bonds would what to see their value cut by -50% or more. Deflation allows for high bond prices and a some form of interest payments. What more can you ask for as an elite?
"asymmetric debt deal by the elite"
For sure, if there's ever an official currency reset, the peasants are stuck with the same debt burden if not multiples more in real terms.
"Ready to be injected into the economy when we will get the next credit freeze"
Oh, I'm sure they will bailout the bond defaults of credit cards, auto loans, student loans, mortgages and even state and municipal debt. But that money already entered the economy, as we know bailing out bondholders does NOTHING for the real world economy.
Will they inject money into the real economy? I doubt it. The only reason the US got out of the depression was because of WW2, there was no other reason. Otherwise a downward credit cycle can last many decades, we are only 10 years into this cycle.
If investors truly thought there was going to be even a small chance of massive money to be injected into the real economy, hard assets would already be trading at least double the current price. Hard assets are telling us what the future holds if we enter a economic slowdown- there's no white knight to save the day. Deflation is the best option and that's what TPBT have decided.
As a follow up to Silver66's post regarding the elites making a choice between inflation or deflation:
In my view this will not be a choice but a Hobson's choice, and both sides of the elites will be making a different choice, and there is currently an argument as to who gets what they want.
The right+ left (the political class of the right and the left) are going to get put out of power by rising democratic movements (which they call populism), these populist parties being also right and left but composed of new individuals. There are some Trojan horse faces among them who represent the old guard but hope to capitalize on the rising new parties rather than the older established ones.
The elite above the political class and beside them (the corporatist, globalist and oligarch (=individual corporatist) ) factions observe a greedy and aggressive political class grabbing a larger slice of the economic pie than they used to get in the past, and are happy to clip its wings before such a class can threaten them.
So those are the powers contesting this. And their lines are confused. eg the EU is a body of political class who want more power to enable them to withstand multinational oligarch-corporatist powers better. Only they become globalist to do so, and they are heavily infiltrated by communist and US influence. This means the EU is a divided house with some purification phases in its' future until one component becomes dominant. Populism emerging above a certain threshold could be a good thing, but could also trigger a punitive reaction from the higher elites, which would replicate the causes of the Spanish Civil War.
A visual reminder from Wikipedia's page on SCW:
That was began 1936, from the middle and lower class gaining the balance of power, and the establishment, church and land owning elites preparing a coup to use arms against the democratic government of Spain. The coup was prevented, and shortly after it went to war.
- 1936 + 75 and 82 and 84 and 89 years
- which are the relevant periods would give
- 2011; 2018, 2020, 2025
One of those dates has been passed, one is current and one is in the medium term future. So take a look at Spain and also Europe and see for yourself if unrest has similar characteristics. Also, by implication, a move towards greater war over larger regional territory would follow - historically WW2 erupted three years after the Spanish Civil War began.
We approach one of the deciding moments at which we elect the chosen path forwards. A decision, or conflict resolution between ruling factions will decide this inflection in the context, inflation for asset owners or deflation in favour of the indebted. This will be shown at the end of this 2018 by the gold price either hitting bottom and bouncing, or by gold breaking down to significantly lower long term trading range, and trading there until the next inflection os similar importance.
During the coming six months the inflections roll by with different specific dates for the different assets.
By the way - to those who follow ,y work with closer access, my next Rhythm and Price (RNP) webinar is next Thursday 9th of August 21:00, GMT / 16:00 EDT / 14:00 MDT / 13:00 PDT, for EU residents 22:00 CET. I and about 15 to 20 people who are more interested than the average will be considering this kind of stuff, using markets at measuring tools, and I will be answering questions for a half hour or more.
If you don't follow my work directly there will always be posts here in The Setup For The Big Trade, with the occasional front page blog article to read.
As the chart above demonstrates, trading often is sometimes better avoided. Always provided that there is a method when foregoing every single breakout, to not miss those which will grow later on into big moves. This is a reliable recognition of scale, which I have always said is one of the most challenging problems we must overcome within markets.
So I have to make a lot of posts here at times when I am decided to do nothing, take no actions in the market. Sitting still is actually a conscious action as it happens. I hope that the posts I make during these long waiting periods are worthy and beneficial to you my readers, and I try to make them worth your time.
I do think the coming 12 to 25 weeks will be rather busy. Unlike the last 104 weeks of sideways ranging action, , there will be several opportunities to either get it nicely right or very wrong placed in front of us by the market, and I hope to continue making good decisions during this period too. And naturally always acknowledging that I can so so easily make a mess of it, I remind you that correctly placed stops - always important - will be absolutely crucial, in every asset class, from this month onwards.
Best of luck to everybody for the coming campaign.
And ... consider this:
what would the world be like for gold to break down for eg a multi year period? And what would things globally and nationally have to be like for gold to bottom in a few months time and then rise from that low for multiple years? Big changes are coming whichever way this goes.
(edits: usual typo elimination!!
https://charleshughsmith.blogspot.com/2018/08/heres-why-rip-roaring-infl... "To quell the revolt of the many, the Powers That Be will create trillions in new money and helicopter-drop it to the masses" Another "helicopter" money guy here. If TPTB injected some money into the real economy "to quell the revolt", it would most likely be crumbs in my opinion. The main issue I have is that there's too many calling for "helicopter money" and the markets are calling for the complete opposite. What did they do in 2008 for the real economy? Absolutely NOTHING, I expect the same if we have a repeat.
Vox Day talks about the value of QAnon to the right.
Whether or not QAnon is genuine is immaterial to Vox.
Vox looks at the effectiveness of QAnon and does a cost benefit analysis as eg might be done by a commanding officer upon subordinates and their missions..
So are you a recruit of QAnon, or an opposer of QAnon, or are you a neutral observer of what is happening on the battlefield in front of you, and always considering what you need to do next?
NB Note that Vox does not agree with Scott Adams persuasion filter of reality, and says he doesn't buy it. Sure! While he is using rhetoric himself to recruit and persuade.
I recommend checking out the gold/sp500 ratio chart, we are getting close to testing the 2005 levels. At that point, most of the gold outperform relative to stocks are gone.
The gold/bond chart is also looking very weak, the next level of support is the 2006 level.
The long term US dollar chart, it appears the next move is higher and moving towards the 2001 levels of 118.
It's looking more and more that the strong PM's move in Dec. of 2015 was a giant suckers rally. The charts are pointing to a new bear market move lower.
A good bet here is going long the 30 year US bond.