They know what they're doing. They're apparently trying to destroy this country. "Transition" is their code word for doing so. They snicker and smile when they say it. They know.
Very interesting and thoughtful write up. I know a few people who need to read this and heed your counsel. But they won’t.
I’ve been nearly out since October and will continue selling into the rally until everything but miners and oil stocks are gone. And then I’ll just wait for the once in a lifetime opportunity that I also believe will arrive. I got burned badly in 01-02 and worse in 08. But now at 67 I’m slower but wiser. LOL.
Where to keep the cash is a bit of a mystery but there is only so much one can do.
A brazilian investor here. Been following your substack and finally subscribed. Thankful for your thoughts here on substack and helping me to navigate these world's troubled water. Here in Brazil we try to dollar up our passive income, since our currency is weak against USD and EURO and our goverments likes utopia, "feel good" politics and to try the same error times and times over... State does not creat wealth, private sector does.
Mis-leading the public seems to intend to make the public make wrong decisions for their families. By not preparing, they will truly go hungry when the shelves empty due to a lack of transportation, lack of fertilizer, lack of farmers because farmland is being purchased by non-farmers and chem trails poisoning the soil and they have spent their money elsewhere. As canaries in the mines (poorer nations) are starving their people (Sri Lanka & Panama, etc.), we should be paying attention to the real agenda of the globalist elites.
Two notes: 1)“We are committed to bringing inflation down and we’re going to do what we need to do. We are a long way away from achieving an economy that is back at 2% inflation, and that’s where we need to get to.” - Good catch here. NK’s comments this weekend explained the unanimity of the FOMC. Even the doves are desperate to get inflation down through accelerated rate hikes; they are on board with getting back to 3+% sooner rather than later and pushing through QT(while being worried about the rate hike pace). Unanimity is also why the hawks didn’t get their 100 bp increase (if they aggressively discussed it…we’ll see in the minutes when they get released). 2) I think the ‘newspeak’ we see in the comments about ‘not a recession!’ comes from a sincere place….the administration believes it’s necessary in the same way some managers and executives think kindergarten level ‘team building’ events are really effective. They believe they are doing the right thing to appear as a steady hand at the wheel…they have a blind spot where they can’t appreciate that to us they look like Maggie in the Simpson’s intro scenes appearing to steer the car (only when the shot pans out to be seen holding the toy steering wheel of the ‘tiny tots drive2’). I’ve seen this in the past with other executives focusing on positive rewording of problems. It’s shocking when you realize not only is someone full of bs, they really believe the bs they are saying. All of that said, I’ll allow that there is still a fair probability that they are pushing the ‘not a recession’ as a intentional deflection to keep our view in the rear view mirror.
Disconnect-Wall St isn't Main St-the majority of equities are held by the most wealthy. Your commentary ignores this fact. What Joe 6 pack will react to is layoffs, which may occur if there is not a V shaped recovery in equities. Agree that sugar coating stinky financial reality is not appropriate. However, most Main St Americans are ill informed about the intricacies of the workings of the Fed, Treasury, price index formulas, etc and their relationships to day to day Main St realities.
This administration is sold out to China. There's no wondering why after reading...
Quoting Benjamin Fulford, "These people, realizing they were in danger of losing control of the West, have been trying to hand everything over to China in exchange for protection. Of course, the Chinese are not stupid and realize that taking these people into their trust would be like a caterpillar taking in eggs from a parasitic wasp."
I feel politicians use to be a lot better and more clever at lying to us. Now they outright lie to our face when they know we know they are lying and it doesn't bother them.
I agree with you that it'll make things worse AND I think it also exposes the media. More and more people are realizing that the media are pushing these lies as well and people will continue to lose faith.
The markets have likely gotten this right, for now. All Fed board members have been talking tough for months in an effort to appear focused on the pain they helped cause by being late to address obvious inflation. But declaring we are at neutral rates (at 650bps below inflation) is a clear signal they are close to done with rate hikes (maybe another 100bps) and QT will be all but shelved by YE. That this will cause more pain down the road is irrelevant to these folks.
Awesome work as usual Chris. I believe there are so many variables at play that the typical financial playbook doesn’t work. I don’t believe Powell, Yellen, and their minions are stupid. I believe they are politicians (hence the lying) that are trying to strike a balance during the last innings of the long-term debt cycle that Ray Dalio describes so well. They want/need inflation to exceed bond yields so that debt will be paid down with cheaper dollars; however, they don’t want inflation too high as it will crush the economy…so they are increasing rates; however, they can’t raise rates too much because there is so much debt in the system and our country can’t afford to pay the interest. Too significant rate increases will kill risk assets that need to remain high to fuel consumption. Too significant rate increases will also kill production which needs to be at a high level get overall debt to GDP down to a manageable level. If they go too far and too quick, they will still crush the economy and need to turn up the printing press to hopefully back up and smooth the ride. Not to mention the effect of many other monetary, political, and geopolitical issues at play. Gonna be a long 4th turning. Few understand this…
What is the first objective of a politician? Get Elected!
What is the first objective of an elected politician? Stay Elected!
But the outlook is worse than you think - on a Debt/GDP basis the west is a banana republic.. Just look at what the leadership from so called banana republics did to their peoples over the last 80 years.
Yes, agree. And I think people are going to to be angry, again, in the mid-terms and could set the stage for 2024. Too much 'Big Lego Energy' in the Video administration, along the lines of "Everything is Awesome" and this: https://youtu.be/Vr7NkT0-I0U
The only way the GDP numbers get positive is to get inflation at least under 4%. Too much stimulus = inflation = negative GDP. It will take slack in the labor force to create a lasting suppression of inflation. This clown show running the economy was late to address inflation. They admitted being wrong on the transitory nature of the current inflation. They will have to pivot but it won’t be until at least another 100 basis points of hikes. Fed Chair Arthur Burns made the same mistake during his tenure from 1970-1978, and inflation went from 6% in 1970 to 12% in 1974. It took some very painful rate hikes and economic pain to fix the Burns blunder. Inflation averaged 9% during his term. I don’t think we will see 2% inflation for a while. I think inflation continues rising and that will force the Fed to continue hiking. Current template is sell above 4200 on S&P and begin to nibble under 3600. If someone lies to you once they value other things more than your trust. If they lie twice they don’t value you at all.
There is an implicit presumption in most financial commentary that Wall Street finance is equivalent to Main Street economics--that if the one is good the other must be also.
However, this has been increasingly not the case, as financialism has steadily turned Wall Street into a casino on steroids with little to no regard for Main Street.
Given that the stated purpose of the Fed's rate hikes is to create demand destruction and job loss, a good portion of people on Main Street are not likely to be all that upset with a Wall Street crash. At least then Wall Street is sharing Main Street’s pain.
They know what they're doing. They're apparently trying to destroy this country. "Transition" is their code word for doing so. They snicker and smile when they say it. They know.
Very interesting and thoughtful write up. I know a few people who need to read this and heed your counsel. But they won’t.
I’ve been nearly out since October and will continue selling into the rally until everything but miners and oil stocks are gone. And then I’ll just wait for the once in a lifetime opportunity that I also believe will arrive. I got burned badly in 01-02 and worse in 08. But now at 67 I’m slower but wiser. LOL.
Where to keep the cash is a bit of a mystery but there is only so much one can do.
A brazilian investor here. Been following your substack and finally subscribed. Thankful for your thoughts here on substack and helping me to navigate these world's troubled water. Here in Brazil we try to dollar up our passive income, since our currency is weak against USD and EURO and our goverments likes utopia, "feel good" politics and to try the same error times and times over... State does not creat wealth, private sector does.
The Democrats are betting that the crash comes after November 8. After that let the chips fall where they may.
Mis-leading the public seems to intend to make the public make wrong decisions for their families. By not preparing, they will truly go hungry when the shelves empty due to a lack of transportation, lack of fertilizer, lack of farmers because farmland is being purchased by non-farmers and chem trails poisoning the soil and they have spent their money elsewhere. As canaries in the mines (poorer nations) are starving their people (Sri Lanka & Panama, etc.), we should be paying attention to the real agenda of the globalist elites.
Two notes: 1)“We are committed to bringing inflation down and we’re going to do what we need to do. We are a long way away from achieving an economy that is back at 2% inflation, and that’s where we need to get to.” - Good catch here. NK’s comments this weekend explained the unanimity of the FOMC. Even the doves are desperate to get inflation down through accelerated rate hikes; they are on board with getting back to 3+% sooner rather than later and pushing through QT(while being worried about the rate hike pace). Unanimity is also why the hawks didn’t get their 100 bp increase (if they aggressively discussed it…we’ll see in the minutes when they get released). 2) I think the ‘newspeak’ we see in the comments about ‘not a recession!’ comes from a sincere place….the administration believes it’s necessary in the same way some managers and executives think kindergarten level ‘team building’ events are really effective. They believe they are doing the right thing to appear as a steady hand at the wheel…they have a blind spot where they can’t appreciate that to us they look like Maggie in the Simpson’s intro scenes appearing to steer the car (only when the shot pans out to be seen holding the toy steering wheel of the ‘tiny tots drive2’). I’ve seen this in the past with other executives focusing on positive rewording of problems. It’s shocking when you realize not only is someone full of bs, they really believe the bs they are saying. All of that said, I’ll allow that there is still a fair probability that they are pushing the ‘not a recession’ as a intentional deflection to keep our view in the rear view mirror.
Disconnect-Wall St isn't Main St-the majority of equities are held by the most wealthy. Your commentary ignores this fact. What Joe 6 pack will react to is layoffs, which may occur if there is not a V shaped recovery in equities. Agree that sugar coating stinky financial reality is not appropriate. However, most Main St Americans are ill informed about the intricacies of the workings of the Fed, Treasury, price index formulas, etc and their relationships to day to day Main St realities.
Great article. Worth sharing. Thank you!
This administration is sold out to China. There's no wondering why after reading...
Quoting Benjamin Fulford, "These people, realizing they were in danger of losing control of the West, have been trying to hand everything over to China in exchange for protection. Of course, the Chinese are not stupid and realize that taking these people into their trust would be like a caterpillar taking in eggs from a parasitic wasp."
I feel politicians use to be a lot better and more clever at lying to us. Now they outright lie to our face when they know we know they are lying and it doesn't bother them.
I agree with you that it'll make things worse AND I think it also exposes the media. More and more people are realizing that the media are pushing these lies as well and people will continue to lose faith.
Great work Chris keep it up.
Good article will be linking as usual @https://nothingnewunderthesun2016.com/
The markets have likely gotten this right, for now. All Fed board members have been talking tough for months in an effort to appear focused on the pain they helped cause by being late to address obvious inflation. But declaring we are at neutral rates (at 650bps below inflation) is a clear signal they are close to done with rate hikes (maybe another 100bps) and QT will be all but shelved by YE. That this will cause more pain down the road is irrelevant to these folks.
Awesome work as usual Chris. I believe there are so many variables at play that the typical financial playbook doesn’t work. I don’t believe Powell, Yellen, and their minions are stupid. I believe they are politicians (hence the lying) that are trying to strike a balance during the last innings of the long-term debt cycle that Ray Dalio describes so well. They want/need inflation to exceed bond yields so that debt will be paid down with cheaper dollars; however, they don’t want inflation too high as it will crush the economy…so they are increasing rates; however, they can’t raise rates too much because there is so much debt in the system and our country can’t afford to pay the interest. Too significant rate increases will kill risk assets that need to remain high to fuel consumption. Too significant rate increases will also kill production which needs to be at a high level get overall debt to GDP down to a manageable level. If they go too far and too quick, they will still crush the economy and need to turn up the printing press to hopefully back up and smooth the ride. Not to mention the effect of many other monetary, political, and geopolitical issues at play. Gonna be a long 4th turning. Few understand this…
What is the first objective of a politician? Get Elected!
What is the first objective of an elected politician? Stay Elected!
But the outlook is worse than you think - on a Debt/GDP basis the west is a banana republic.. Just look at what the leadership from so called banana republics did to their peoples over the last 80 years.
Yes, agree. And I think people are going to to be angry, again, in the mid-terms and could set the stage for 2024. Too much 'Big Lego Energy' in the Video administration, along the lines of "Everything is Awesome" and this: https://youtu.be/Vr7NkT0-I0U
The only way the GDP numbers get positive is to get inflation at least under 4%. Too much stimulus = inflation = negative GDP. It will take slack in the labor force to create a lasting suppression of inflation. This clown show running the economy was late to address inflation. They admitted being wrong on the transitory nature of the current inflation. They will have to pivot but it won’t be until at least another 100 basis points of hikes. Fed Chair Arthur Burns made the same mistake during his tenure from 1970-1978, and inflation went from 6% in 1970 to 12% in 1974. It took some very painful rate hikes and economic pain to fix the Burns blunder. Inflation averaged 9% during his term. I don’t think we will see 2% inflation for a while. I think inflation continues rising and that will force the Fed to continue hiking. Current template is sell above 4200 on S&P and begin to nibble under 3600. If someone lies to you once they value other things more than your trust. If they lie twice they don’t value you at all.
There is an implicit presumption in most financial commentary that Wall Street finance is equivalent to Main Street economics--that if the one is good the other must be also.
However, this has been increasingly not the case, as financialism has steadily turned Wall Street into a casino on steroids with little to no regard for Main Street.
Given that the stated purpose of the Fed's rate hikes is to create demand destruction and job loss, a good portion of people on Main Street are not likely to be all that upset with a Wall Street crash. At least then Wall Street is sharing Main Street’s pain.
https://newsletter.allfactsmatter.us/p/job-loss-dead-ahead