The setup for the big trade

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Fri, May 10, 2019 - 12:28pm
AGXIIK
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Starvation by Hedonics: How Chained CPI will kill millions

Leaving the doom porn headline aside, what we see in poverty line redefinition means hundreds of thousands of families will be forced off the SNAP/EBT Section 8 housing and what we derisely call the free shit railroad

The fact that a family of 4 can barely make ends meet or even wave as they go by, when the government defined inflation by hedonic adjustments to consumer good such as replacing hamburger with chicken, chicken with hamburger helper and hamburger helper with dog food, the cost increase of food and other consumables can be bent down to 2%. Try to eat on 2% inflation.

Replace new car with used; replace used car with much older used car; replace older used car with ride sharing, replaced it in the end with public transport or a bicycle. Apply enough pressure to the cost curve and it can go negative. Negative does not pay the rent that increases double digits.

The increases tucked into $2,000,000,000,000 of public assistance, public pensions, social security, medicare and other government entitlement benefits ranges from 0 to 2.7%, all based on the CPI inflation chained calculations

Reality bites when you see food going up 6% at a minimum, health care 9-12%, health and other insurance 12-25%, rent 15%, home prices 5-10%. John Williams of Shadow Stats claims inflation is 9% I tend to see that as realistic

Talking to the street; see how it impacts 45,000,000 on public assistance and 65,000,000 on social security and medicare and you have 50% of the US population cooked alive with inflation, unable to gain income traction or a means to mitigate inflation. Even the few among the lower and middle classes get, at most, 1% on their savings If they have savings . 75% of the US population doesn't have $1000 in savings.

Most people of a certain age, 60 or older, have been frog marched through 3 major wealth destruction cycles from 1992, 2001 and 2008. 3 cycles in which half of a retired person's net worth in stocks and real estate was vaporized means most people from age 45-50 and on cannot endure another major crash.

It's nearly impossible to earn your way out of a double networthectomy via salaries, pension contributions and real estate bubbles. What we see today is a cohort of 50 million Dole Geezers who are almost completely reliant on social security. SS is slated to be cut by 25% by 2034 or sooner. Medicare will be on life support by 2026.

There is another group of people on public assistance who are condemned to a lifetime of poverty. Pulling yourself up by your bootstraps works if you have boots. Millions people are homeless and and wearing Crocs found in a dumpster. Public education pulls people down. Public assistance keeps them there.

When the government, lead by Trump or some other POTUS, decides to balance the budget on the backs of the poor, touting purported savings of $200 million, that sum might seen huge to government bean counter.

To a family about to be dumped off of their meager assistance, shackled to the streets by the callousness of Chained CPI or made homeless by Torquemada's hedonics, $5-10,000 loss is monumental

Starvation by hedonics simply means that inflation eats out the substance of any government check when that check increases a stupendous 2%. The poor class cannot eat out and likely cannot eat in as the price of food rises in direct relationship to the decline in its quality. Misses meals becomes commonplace.

The hollowing out has been in play for 10 years. While the .1% rentier class has done nicely in the stock market, rise in bond values and property prices ripping higher, the 99.9% are sinking further into abject penury.

When the income gap between the top and bottom grows daily, the wealth divide turns into a Grand Canyon

The people will not stand idly by while Marie A tells them to eat day old Hostess Twinkies

Do I care about the velocity of money?

Only if I can chase it down like a Highwayman from The Good, The Bad and the Ugly, filling my saddle bags with gold and silver from the stagecoach that I arrested at gun point on a dusty wagon trail

AGXIIK

Sat, May 11, 2019 - 8:18pm
zman
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"Fed policy has been destroying the middle class for decades"

No, that's not true. The Fed didn't create the 39 year bull market in bonds. The reason why yields went down was because of deflationary policies. Globalization, immigration, tax and fiscal policy did it.

The Fed only reacts to economic conditions, it can't create it.

1. When you ship millions of good paying jobs out of the US, that destroys the middle class.

2. When you open up the southern border and allow 10-20 million illegals in to undercut wages, that destroys the middle class.

3. When you pass massive tax cuts (Reagan) and now Trump for the very rich, that destroys the middle class.

This is how the Fed funds rate went from 20% down to 0%, it's just a reaction to deflationary policies.

So now we're going to be at permanent 0% or even negative rates, this means no chance for any form of economic stimulus. This means the bottom 90% must consume even less resources. This means even more deflationary policies (cutting social benefits). Look over at the EU today, that's the US in a year or two.

Sun, May 12, 2019 - 10:47am
Solsson
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Three synchronicities this

Three synchronicities this weekend. It started on Friday I looked up my compensation hours 44.44h I looked up the number and it meant that I would be able to finish projects with great success. I've been struggling with the acceptance of my software the whole week. 20min after I saw the number 4444 the customer accepted all changes and wished me a happy weekend.

Yesterday I got the BEEF number. I had a nasty grin on my face. This time, finally I am going to beat the number 23. The girl picked up my package and asked for an ID, then things went wrong. I took out the drivers license from my wallet when I traveled to Rome. I was not able to receive the package, I went home with nothing. Number 23 won again ... sigh!

Today I went to the post office again and I really didn't want a new esoteric number so I tried to cheat the queue number machine by letting people push the button before me. I recieved number 111. 3h ago I watched the end of the European Tour with a Swede in the lead. All of a sudden the commentator said. If Marcus Kinhult wins today it's going to be the 111 Swedish victory at the European Tour.

I emailed my golfing friends about the synch, right after I sent out the email, Marcus made a back to back bogey and he was out of the winner circle, then a miracle happened and he WON ...

OMG, should have put in a major bet like 1000 pounds, 10-20times the money in 3h.

Mon, May 13, 2019 - 9:58am (Reply to #11863)
Green Lantern
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Green Lantern wrote:

Green Lantern wrote:

Recalibrating gold-not purchasing until bull trend is confirmed in 1290ish area.

Buy signal triggered.

Mon, May 13, 2019 - 12:43pm
ancientmoney
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"Fed policy has been destroying the middle class for decades"

Yes, it is true.

Saying the Fed only reacts to conditions does not absolve the fact. And, it has been the leading CB for the last 8 decades, since the end of WWII, so it does not just react.

The Federal Reserve was created so that the bankers and politicians they paid off (and continue to pay off) could consolidate and grow their power and control over the economy and the people.

The fiat money system is at the heart of the issue. It allows, no, requires inflation in order for the debt-based monetary system to exist, and by existing, it moves wealth from the people to the elites at the top of the system. So, removing gold from the system was another Fed (banking system) tool to maintain and grow power, control and wealth.

Sure, some good things came out of the excess creation of money, such as technological breakthroughs that actually help people live better lives.

However, the debt-based system, which was fueled by cheap oil, caused growth to far exceed what would have been called "normal" a century ago. It also caused the problem we have today of the bottom 95% owning about as much of earth's wealth as the other 5%.

If you look at the earth's population growth over the last 200 years, you see a staggering increase that coincided with the discovery of large amounts of oil and its uses, along with the fiat money system.

We are close now, I think, to the end of that money system, as it is reaching the end of its life. Debt service is approaching, if it has not already reached, it's maximum, as proven by negative interest rates in Europe, and an inability to raise rates elsewhere.

The current system, which has been called a bond bull market for the last 30+ years, is about to turn into a global jubilee, it seems, either peacefully, or not.

Mon, May 13, 2019 - 2:01pm
UncleFester
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S&P

Here is my current count on the S&P, completion of wave2 down should take us into the summer.

https://www.tradingview.com/x/7yhNntzY/

Just because I'm paranoid, doesn't mean they aren't out to get me.
Mon, May 13, 2019 - 5:21pm
Green Lantern
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Zman,

Zman,

My only comment to the entire ‘they won’t let gold and bonds....” thread is SHOCKS to the system. Tony Plummer”Life Cycles” reviewed in the book section

Shocks, black swans, hide behind corners. They are doing nothing more than postponing economic shocks Timing of these things seem elusive

looking like indexes in steep 2 month correction Let’s see how gold moves in relation. There is a forex relationship too. It’s looking like both gold and silver have inverted cycles in short time Nobody seems to know when that is going to happen

Lets see what all those soybean farmers discuss with the family now that they don’t have China to sell it to

Lets see how many towns get completely wiped out along the Mississippi exactly 92 years to the last great Mississippi flood oF 27

Let’s see if China has any say in price while battling Washington

lets see where money comes in from shocks with euro that seem close to inevitable in the future Believe me it’s not all love between Germany France and italy

Some of these events won’t be shocking in terms of predictability but they will have wide range effects You also can’t plug a hole in a boat that you don’t know is going

Mon, May 13, 2019 - 7:37pm (Reply to #11877)
zman
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@ancientmoney

"removing gold from the system was another Fed tool to maintain and grow power, control and wealth"

I agree 100%, it really enables the massive trade deficits and government deficits. What if US bondholders demanded gold for bonds like Germany and France did? The gold would be gone in short order. The trade deficit is a key component for creating and maintaining the massive wealth inequality.

"end of that money system, as it is reaching the end of its life"

But is it? There's only ONE thing that can hurt it- INFLATION. There's no signs of it anywhere. Also, when you have total control of fiscal and tax policy, there's no chance of inflation is you don't want it. They all know the system can't last forever, but the goal is to maintain it for another 25-30 years with deflationary policies and 0% interest rates.

"proven by negative rates in Europe"

I think it actually proves my point. Why can't they keep rates in the EU and now the US at 0% or negative for another generation? They are basically going to kill the growth and inflation rates to basically nothing. They will do this by hiking taxes and cutting benefits for the peasants. It will be a perpetual recession/depression for the bottom 85% and great times for The Elite. It's been the plan for a long time, so far it's been perfect execution.

"inability to raise rates elsewhere"

Which is perfectly fine, when rates are at 0% there's no interest payment issues. Why would they need to hike rates in the fact of the deflation they have created? They won't.

Mon, May 13, 2019 - 11:59pm
HappyNow
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I believe all this tariff

I believe all this tariff play really tax disguised as a trade war. Quite a windfall for Governments. Just another way to tax.

Swing trade indexed ETFs. Long physical gold, silver, and 1 miner.
Tue, May 14, 2019 - 4:38am (Reply to #11881)
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HappyNow wrote:

HappyNow wrote:

I believe all this tariff play really tax disguised as a trade war. Quite a windfall for Governments. Just another way to tax.

That.s a nice way to consider it. HappyNow.

I see a certain aspect drifting out of view in the conversation. It's this: the business cycle is a central bank cycle. The 9 18 36 cycles are sovereign cycles that cause central banks to make decisions. That is, these entities react to those cycles, they do not make them. Cause and effect must be understood.

Those sovereigns are bossed around by the biggest sovereign, and that is the source of the medium length cycles. This is saying that smaller sovereigns, weaker nations and states, are agitated by the bigger ones, which themselves have their own heartbeat.

Now.

With talk of inflation, deflation, and what "elites" want, don't forget that the last 100 years was a century of inflation.

Deflation after that is the most natural thing, UNLESS, new energy (literally energy, but wealth, or growth in people numbers can substitute) is added to the system.

But it is not reasonable to think that deflation follows inflation right away. One downswing can follow an upswing, but the bigger gestalt is for a topping period as it all grinds slowly to a stop.

Central banks, elites, governments and all the bunch of leaders of people have not the slightest control over that process. They are reactive to that which they see coming. but they may at times have "longer eyes" than we have, due to the great resources they can deploy. They are also extremely talented at ignoring their own research, their own whistleblowers, their own warning signs.

So remember: CENTRAL BANKS AND ELITES ARE REACTIVE.

If creative they would not create the stupid scenarios they themselves set up all the time, and all the tight spots they have to manipulate a way out of all the time.

Groups of humans are human. They expand to absorb opportunity, and adversity pushes them back.

Some individuals within those organizations are not a part of that "on autopilot" whole.

And the sovereigns are subject to, and not controlling, eg (rounded off) 50, 60, 70, 80, 90, 150, 300 year cycles.

The tide turns and goes out after coming in. The central banks are wave machines it is true, but they are located in swimming pools, within bigger pools, within the ocean. We individuals don't have ability to get beyond their reach - police and armies and navies do what they want - but bigger waves constantly sweeping in from outside against which these central bank have machines are powerless.

Let them swing things to the wrong side of range and simply do your thing being prepared for the cheat and crooked moves as they begin to lose. Watch for fresh resources being accessed because that can prolong their game.

argentus maximus Rhythm and Price https://www.greenhobbymodel.com/rhythmnprice.html This analysis - global markets
Tue, May 14, 2019 - 6:15am
Green Lantern
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"Both Xi and Trump are

"Both Xi and Trump are classic state mercantilists"

Ben Hunt

Tue, May 14, 2019 - 7:06am (Reply to #11883)
Green Lantern
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mentioned last week as a very

mentioned last week as a very profitable trading gold stock. Given the right circumstances, it exhibits wide range, high return, for low capital trades. This found in back testing how this stock behaves according to the work of Louis McWhirter Theory of Stock Market Forecasting. https://www.amazon.com/McWhirter-Theory-Stock-Market-Forecasting/dp/0866...

It has been hypothesized that he, she was WD Gann based on the gematria of the name =9. Back testing this stock shows that it is highly responsive to certain cycles when they hit. Based on the same system this IS NOT A BUY AND HOLD STOCK based on it's first trade chart which exhibits ALOT of volatility.

Tue, May 14, 2019 - 4:42pm
zman
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Gold/Silver Ratio hits another recent high

https://www.macrotrends.net/1441/gold-to-silver-ratio

Yesterday, the Gold/Silver Ratio hit 88. This is just another piece of evidence that deflationary forces are in full force. It's at the highest level since 1991 when it hit 100 on the ratio. I see this ratio going higher, maybe even past the 100 level in the years ahead.

Tue, May 14, 2019 - 5:38pm
zman
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The Elite are already sending the message

https://www.cnbc.com/2019/05/14/feds-williams-says-policymakers-need-to-...

Isn't this interesting, the Fed is already preparing the public that 0% interest rates won't help growth for the US economy!!!! The long list of excuses is beyond pathetic, but what else would we expect from these crooks?

So what have I been saying for months now? We're going to 0% to negative rates of interest and we're going to live in a dead economy at the same time. What did Williams just prepare everyone for? The exact same point I have been making.

It's really not to hard to figure out what they're going to say next, they're very predictable. So there we have it, a Fed member warning the public that low interest rates won't make any difference at all for them. But for The Elite, it's going to workout just fine, watch and see!!!!

BTW, the Fed Fund Futures are already pointing for more than a 1/4 point cut and is getting close to a full 1/2 point cut. It's a done deal folks, it's time to get on the deflationary death train, it's not going to be a pleasant ride for the bottom 99%.

Wed, May 15, 2019 - 3:11pm
zman
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Calling All Bond Bears???? The Bond Bull is BACK!!!!

Where did they go? Remember the heavy all-time shorts when the 10 year was trading with a 3.25% yield? Yeah, the Fed was going to "normalize rates" with at least 4-5 more rate hikes , Trump was going to create economic growth with tariffs and trillions of infrastructure spending, wages were going to soar higher, business investment was going to soar higher, what the hell happened?

Oh I forgot, massive deficits were also going to make yields go higher, what happened? Also, the Fed selling hundreds of billions of bonds (QT) was going to make yields go higher, again, nothing. Oh, the Fed told the world they "wanted 2% inflation", again, nothing.

So the next rationalization of yields going lower was the sell off in the stock market, remember the 10 year yield hit 2.37% in Dec. of 2018 during the LOW of the stock market? So today with the stock market indexes near all-time highs the 10 year yield hit 2.37%!!! So another theory goes out the window.

Then the next rationalization was when the Fed can't hike rates the US dollar will trade lower, well that hasn't happened. Then it was when the Fed is forced to CUT rates the US dollar will trade lower. Well, the market is already pricing in almost a 50 basis CUT- and the US dollar is trading HIGHER!!!

Then it's going to be, well when they start QE again- then the US Dollar will trade lower. Sorry, been there done that. That's not going to do anything.

Now the last desperate theory is "Modern Monetary Theory". I'm sorry folks, IF anyone really thinks The Elite are going to flood the general economy with money by funding the peasants, I have some bridges for sale for them. This is pipedream city, never going to happen.

Will The Elite use MMT to enrich themselves with printed money like they have in the past? Yes. Will they suggest it's to help the peasants? Yes. Will money ever go to the peasants and enter the real economy? NO.

So what happened when we saw weak retail sales and industrial production today on Wall Street? Yes, the boys on Wall Street are celebrating economic weakness, this is just the start to the deflationary party.

Thu, May 16, 2019 - 2:14pm
Green Lantern
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(No subject)

Thu, May 16, 2019 - 3:46pm
zman
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Gold Ratios

https://www.gold-eagle.com/article/gold-ratio-charts-offer-keys-bull

The charts and ratios don't lie, it tells the whole story.

Like I have been stating, the 30 year bond and gold are pointing to even more deflation. Lower bond yields and lower gold prices.

The SPY/Gold ratio also points to new lows. Which ultimately means higher stocks and lower gold prices.

Sat, May 18, 2019 - 4:14am
Solsson
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While we wait for gold to

While we wait for gold to recover from the full moon smack, we can take a look at the treasury notes:

The price of the precious metals often confuses you. I look at a basket of miners to get a clearer view. Looking at miners I am tempted to say that we soon will have a rally.

Looking at bonds I am not impressed, they look long term bearish and short term bullish. The 30y could make a double top (a lower one) but I doubt it will get that far before something fundamentally bond bearish happens. Listening to the heavy rhetoric language by my favorite commentators, we are getting closer to a precious moment.

Sun, May 19, 2019 - 11:06am
zman
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30 Year Bond

I'm sorry Solsson, but I don't find anything chart bearish about the 30 year bond. It's around 5% from the all-time high of 2016. So after a 3 year consolidation, we should see very strong move from that high.

Check out the link I posted on the gold and bond ratios, it tells the whole story.

"bond bearish happens"

I'm all ears, I posted all the reasons why I'm bullish on bonds, what's your bear case?

Sun, May 19, 2019 - 3:52pm
Green Lantern
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Gold over the next weeks

Gold over the next weeks/months. While the inflection points work (change of direction), and I have the tabulation of all solar/lunar Combinations for the last 40 years, and I check in with other top cycles analysts including Am,and the other guy we post on RnP (EH), I try to do an Elliot wave analysis, look for set ups etc... Something is wrong in a different way.

I've noticed EH has recalibrated along the way, changed price levels, Pm(Gann guy) has totally recapitulated from week to week for the last month (these are the guys whose technical analysis books I study so I respect their experience enough to learn their methods but they are struggling too. They seem to be getting the indexes much better than gold and silver.

"Since the US trade war with China has really gotten underway the best fit cycles for gold and silver have not forecast as accurately as they have in the past before the trade war started."

He goes on to imply the active cycles have been shifting.

I have seen the gold and silver cycles invert, and I saw it in crude all around the same time span.

The cycles were working fine late 2018 into the Feb high. So if you going to tell me it's because it's all manipulated than you'll tell me why it's different now? It looks like cycles are being amputated/flattened?? But if different cycles are becoming active which I'd have to spend a long time looking at it, then I'm out until there is a clear direction. I'm not into 2 day trades.

Theoretically, tomorrow is a change of trend, there are lunar/solar positive factors on Tuesday that have traditionally had 4% or greater reversals in gold...so technically next few days should be bullish but prices should have been rising from a higher zone.

randomness