November 14, 2018 Market Update – Nothing is immune from the strong USD, not even bitcoin

I have uploaded a podcast for November 14, 2018. Click here to go to the show archives page to listen and look at the relevant links or you can listen on the link below. You can also right mouse click here to download the podcast.

-(Yay!) Gold tests $1,200 as predicted, but receives a bid this afternoon and it coincides with bitcoin’s collapse.
-We predicted the rise in the cryptos last year and the subsequent collapse this year and made and saved ourselves tons of money. It was all determined by the chart and market action. The markets were too bullish and we knew the downside would be relentless.
-If you invested in the cryptocurrencies and found all your knowledge and wisdom off the internet, how has that worked out? Has the internet been a wealth equalizer or a wealth extractor?
-Blockchain has a future. Jamie Dimon says so. Ask yourself this question; Who made Jamie Dimon into the anti-bitcoin spokesman? Here’s a clue; it wasn’t Jamie Dimon. The crypto shilling was too outrageous and the bullish sentiment was about the highest I had seen since the dot.com bubble.
-All of the hopes and dreams of bitcoin are already reflected in the price.
-FUD has nothing to do with BTC’s collapse. The refusal of the crypto holders to see the truth about what they were holding cost them dearly. Think of the cognitive biases at play.
-The people promoting bitcoin cash and the hard forks are scumbags. They are not your friends and love taking your money.
-The markets are all correlated in the long-term. Nothing is immune from the strong USD, except the USD.
-I wouldn’t short US equities. Even after the drop they are still greatly outperforming all other equity markets.
-Treasuries and US equities receive a bid from the strong dollar. If the dollar were weak, yields would be higher and stock prices would be lower.
-By controlling my confirmation bias and cognitive biases I was able to do an about-face on oil by October 23rd. I admitted my mistake about oil remaining firm and told you all that oil could test the 200-week mva of about $52.50. I saved a lot of money by admitting my mistake and remaining flexible. I keep my trading accounts intact.

The central banks’ balance sheets can continue to grow forever

Never underestimate the central banks’ ability to buy up the world

Here is a Bloomberg article titled, Bank of Japan’s Hoard of Assets Is Now Bigger Than the Economy, which remarks that despite the sense of unease about the BOJ’s dominance in Japan, its balance sheet continues to grow. As always, assets that are on the central bank’s balance sheets are effectively under the control of the elite owners of the private central banks.

For a glimpse into the future of the US, EU, and China, look at the Bank of Japan’s asset buying program. Investors will rejoice as their balance sheets are saved from oblivion

The Bank of Japan’s massive asset purchase program has taken it into uncharted territory, with its ballooning holdings now larger than the country’s annual economic output.

Its holding reached a staggering 553.6 trillion yen ($4.9 trillion), figures released Tuesday show, compared with nominal gross domestic product of 552.8 trillion yen at the end of June.

Bank of Japan’s Hoard of Assets Is Now Bigger Than the Economy – Bloomberg (November 12th)

Never underestimate the central banks’ ability to continue buying up the world; Global investors will demand it if the markets continue to roll over.
Investors pretend to be uneasy about the potential growth of the central bank balance sheets

“There’s no consensus theory on how big a central bank’s holdings can get before it starts getting dangerous,” said Nobuyasu Atago, chief economist at Okasan Securities Co. and a former BOJ official. “There’s a vague sense of unease when the holdings keep getting larger, but it’s unclear at what level things should stop.”

Bank of Japan’s Hoard of Assets Is Now Bigger Than the Economy – Bloomberg (November 12th)

I submit to you that the central banks will never stop buying. The owners of these central banks will continue to buy up as much as investors will let them buy. I bet that when things begin to unwind in earnest most investors will beg the central banks to buy up all sorts of assets to create artificial demand for most asset sectors.

For your reference, I have attached Yardeni Research’s latest Global Economic Briefing: Central Bank Balance Sheets. The report is dated November 9, 2018. Although there is much discussion of the US Fed unwinding its balance sheet, total central bank assets continue to grow on a year-over-year basis. The consolidation of the global wealth must continue. By the time all this is through we will owe a big chunk of our debts to the central banks. We could be paying our highway tolls to the central banks, and most our loans will be owned by the central banks.

I wouldn’t be too concerned about real estate collapses causing economic catastrophe. Japan’s land values finally rose this year for the first time in 27 years and yet their economy continued on an IV drip since their bubbles burst in the early 90’s. I imagine the Federal Reserve or the Peoples Bank of China could buy up any excess commercial and residential real estate supply and the average homeowner will applaud the action.

If the stock market collapses most investors will cry out for central bank intervention.

By the time the collapse screaming is through the central banks could theoretically own large swaths of the economy and it will be done while the alt-financial and mainstream business media were scaring the pants off their readers. Publicly, most of the Wall Street shills and writers will only offer cursory resistance to such drastic measures, but privately they will be elated as their personal balance sheets continue to grow. Jim Cramer will tell all his followers that the Fed is undertaking the best course of action. They won’t care that they placed on the chains of the NWO themselves; they will gladly sell their birthrights for a bowl of soup.

There is plenty of room for central bank balance sheets to grow

The ostensibly unconventional monetary policies of the BOJ will most likely be considered somewhat normal in the next several years. I predict that the Chinese ChiCom government and the People’s Bank of China will begin to support real estate prices by accumulating RE assets on the PBOC’s balance sheet.

The only constraints on future balance sheet growth will be potential inflationary pressures, which will probably be minimal as the world continues to sink in a sea of deflationary red ink, and the population’s willingness to tolerate the balance sheet growth.

Chris Pirnak

The US Fed asset balance sheet only amounts to about 20% of the US economy. If the BOJ now holds assets equivalent to 100% of Japan’s annual GDP, we could see the US Fed balance sheet continue to grow essentially forever. The only constraints on future balance sheet growth will be potential inflationary pressures, which will probably be minimal as the world continues to sink in a sea of deflationary red ink, and the population’s willingness to tolerate the balance sheet growth.

Ask yourself this question; As long as real estate and asset prices hold up, do you think most people will care if the Fed owns the entire US economy? I don’t think so.

 

 

 

November 12, 2018 Update – Gold, oil, stocks, bonds, currencies; Biases are financially lethal, but most people don’t want to overcome them

I have uploaded a podcast for November 12,2018. Click here to go to the show archives page to listen and look at the relevant links or you can listen on the link below. You can also Right mouse click here to download the podcast.

-Gold, silver, stocks, bonds, real estate, USD discussed. Thoughts and recommendations
-Commercials adding to shorts earlier in the week in gold and UST 10-year. Specs add to oil shorts.
-Oil may be the most oversold since early 2016, but any bounce will short-lived. It can’t fall forever though a test of the 100-week mva is due
-Friday red candles on gold and silver look ominous
-Democrats want to kick up deficit spending as they see it not causing inflation
-Further discussion on biases
-Analysis of conflict-of-interest in media
-Ever wonder why commercials geared to adults get more childish? The marketing research groups have determined that adults like to be treated like children

November 9, 2018 Update – Important market update; the dollar continues to rise and the Fed needs to raise rates; The next bust is baked in the cake

I have uploaded a podcast for November 9,2018. Click here to go to the show archives page to listen and look at the relevant links or you can listen on the link below. You can also Right mouse click here to download the podcast.

-PPI numbers and FOMC meeting results point to continued tailwinds to the USD.
-Strong USD will undermine gold and oil. I see 200-week mva in sight for WTI. We suspected oil at 66 (test of 50-week mva) was very bearish as the gap down in XOP on 10/23 signaled doom.
-Gold could drop below 1,200 on strong dollar fundamentals.
-My trading long in gold has been liquidated. I held that long for weeks at under 1200, but the continued strong dollar completely undoes that.
-The Fed has the next bust baked  into the cake.
-The extra ongoing $500 billion in extra fiscal stimulus came at the worst time, and the Fed is now so far behind the curve that I do not recommend anything except short-term USD holdings.
-Cryptocurrency analysis. BCH hardfork and the deceitful shilling. What a joke the cryptos have become. BTC does have a future.

Is the internet a wealth equalizer? Has it helped the investors following the alt-financial media?

We may think the internet helps investors, but the numbers differ

I continually get asked about the internet and whether I believe it’s a good thing for humanity. As you probably already know, I don’t place subjective judgment calls on most things; opinions are not really worth anything. The answer is much more complex and to say whether the internet is either good or bad is being overly simplistic.

Ever since the advent of the internet the consolidation of the world’s wealth has accelerated quite substantially.

Chris Pirnak

I can say this much; Ever since the advent of the internet the consolidation of the world’s wealth has accelerated quite substantially.  Even the World Bank has said that the internet has been increasing income and wealth inequality. Those who know how to use the internet to their advantage have seen tremendous growth in their personal wealth.

Which means that for the vast majority of humanity, technological innovators such as the internet have actually helped to undermine their level of financial wealth, and I have an idea why. For people who invest and make financial decisions based on subconscious emotion, unrecognized biases, social media influences, or their favorite blogger, the internet has been a net negative. It makes it easy for them to indulge in their bad financial behavior.

This graph was taken from Deutsche Bank’s January 2018 report titled, US Income and Wealth Inequality. To access the full report click here.

The NWO uses the internet to prey on our biases

Unless one can break free from the chains of cognitive bias to a particular philosophy, mindset, or political persuasion, he or she will most likely end up on the investment losing end. This is necessary by definition.

Examples of cognitive bias:
Fundamental attribution error – The tendency for people to over-emphasize personality-based explanations for behaviors observed in others.
Confirmation bias – The tendency to search for or interpret information in a way that confirms one’s preconceptions while discrediting information that does not support their views.
Hindsight bias Sometimes called the “I-knew-it-all-along” effect, is the inclination to see past events as being predictable.
Gambler’s fallacy – The tendency to think that future probabilities are altered by past events, when in reality they are unchanged.

For a more complete list of cognitive biases click here.

Investing is traditionally a lonely pursuit

Contemplating large investment decisions is often a lonely pursuit; if most people in your group agree with you it is time to reassess your investment thesis. Asset cycles will always persist and when one makes financial decisions based on social proof, he or she is acting based on the crowd, and that is usually the losing proposition.

By design, the internet and social media have created nothing more than echo chambers where unwitting investors can indulge in any thought they have at that moment. For instance, if an investor believes there is going to be a collapse, he or she can gain instant access on the internet to the thousands of writers who will indulge in those fears. For those with hard-wired political biases, if people believe President Trump is looking out for the average American they can locate many writings on the web that will satisfy their bias.

Indeed, if a person can discard his or her biases and predilections, he or she can leverage the power of the internet to gain knowledge that would have otherwise been much more difficult to obtain in the past. But this takes discipline and independent thought and the vast majority of humanity not only do not possess these attributes, but do not care to.

Millennials’ use of social media is helping to drive their investment decisions, according to Fabrizio Campelli, Deutsche Bank AG’s global head of wealth management.

They have a “fear of missing out” as they’re more “networked and exposed” through social media to their peers’ activity than previous generations….

FOMO, Social Media Drive How Millennials Invest – AdWeek

A piece of advice to the young folk who read my blog; ditch the social media when making investment choices. If you need the confirmation of your peers you will always lose in the long run. In every asset cycle there needs to be losers and the large majority of market participants will lose. Only a surprisingly few make the profit. Thus, if your friends are all getting involved you can rest assured they are most likely the future losers.

The internet and asset bubbles

Investment bubbles have always been a part of human market history. But If we take a look at how the financial markets have performed since the advent of the internet and its penetration into the general population we can see that there has been a marked increase in the frequency and amplitude of investment bubbles and crashes. Despite all this access to information, investors will never steer clear of manias. They repeatedly make the same mistakes over and over. This is one of the basic concepts of humanity and its rationally irrational financial decision making process. The existence of the internet seems to coincide with the acceleration of the wild asset speculation and the boom/bust cycle we see almost yearly.

Daniel Kahneman, who was the first psychologist to win the Nobel Prize in Economics attributed market manias to investors’ illusion of control, calling the illusion prospect theory. He studied the intellectual underpinnings of investing—how traders estimate odds and calculate risks—to prove how often people act from the mistaken belief they know more than they do. The internet just feeds into this cognitive bias.

One more piece of advice; drop the biases and find those who have been correct over the long-term

This section pertains to those in the alt-financial community who are always predicting the next collapse, but seem to continually lose money and are usually wrong.

Argument from Incredulity: Concluding that because we can’t or refuse to believe something, it must not be true, improbable, or the argument must be flawed. This is a specific form of the argument from ignorance.
Logically Fallacious

Example:
Chris: The financial markets can avoid collapse for years, just look at the Japanese bond market. The elites are in firm control of their financial system. The fear is injected to scare people into inaction.
John: The markets have to collapse. These elites are not in control and there is too much debt. How can we pay all this debt off?
Chris: The markets continue to move along decade after decade. Perhaps it’s time reassess your mindset

The internet can be an amazing tool for those looking to uncover the workings of this society and the conspiracy for the global financial dictatorship. Moreover, if one can keep his biases in check when performing investment due diligence, he will find the internet to be an powerful ally. Just look at the high net-worth individuals and see how they use the internet to their advantage. Odds are these people are exploiting social media to their benefit and are able to take risks and think independently.

Most followers of the patriot and alt-media movements are handicapped with a terrible bias. Despite the overwhelming evidence to the contrary, those who are trying to “wake” others up cannot accept that the elites are in control of the monetary system and financial markets.  If you are a newcomer to the conspiracy’s underpinnings it is natural to assume this whole thing will fall apart. But to those who are long-standing members of patriot movement you need to realize that things are still being held together, and the fear is mostly injected or self-imposed. Fear keeps people in perpetual poverty.

My one piece of advice for those who are searching the internet to find investment ideas, stay away from those who have been wrong more often than correct. If you can’t then the internet will not help you.

November 3rd Update – What’s up with oil? Short-term profit vs. long-term wealth; Our current monetary system is described in Revelation

I have uploaded a podcast for November 3,2018. Click here to go to the show archives page to listen and look at the relevant links or you can listen on the link below. You can also right mouse click here to download the podcast.

-Answering email questions and comments
-I mentioned on October 23rd that the frackers profits were largely an illusion and that they were not as efficient as the sell-side was claiming. When the stories began to emerge that the shale plays were large consumers of debt the XOP began to sell off. I mentioned then that the drop in the XOP could be an indicator in the oil price direction. Oil then dropped almost $5 since then. I am concerned WTI may touch the 100-week mva at $58.50 or even the 200-week at 52.20. Keep in mind that the price of gas usually comes down here in the US around important election cycles, so this may just be noise, but the shale players look sick. Stay away from the shale drillers.
-I am neutral on US equities. Too many people are bearish and shorting seems too much of a sure thing.
-I am slightly short-term bullish on gold as the dollar is still somewhat short-term overbought on the USDX and in JPY. The COT is still compressed and it has room to further unwind. The commercials covered shorts on just a fall to 1,225. They probably covered many more on the further drop. I look for a test of 1,250.
-Spec shorts continue to cover in the 10-year UST futures. Five weeks in a row, but still overly shorted. Despite all the sound and fury, UST yields are still low. Never underestimate the NWO to keep the system propped-up.
-The problems with predicting commodity, bond, and stock prices in the future. Nonetheless, investors and traders rely on these predictions.
-It is easier predicting the secular trends than it is determining short-term price movements. Concentrating on the big picture can make us a lot more money and save us our sanity.
-Watch out for those begging the US Fed to ease up on monetary policy. They love the easy money and have built a lot of wealth with the loose Fed policy. They are shilling their selfish interests.
-I analyze the monetary and economic systems described in the book of Revelation and they appear to be very similar to those we are currently enslaved under. Let’s not get caught up with thinking that this system must collapse before the tribulation period.
-A few subscribers have commented on the wage economy analysis. I answer some of the questions.
-A subscriber in Australia, a real estate attorney, is observing similar trends in his country’s property titling to that of the US. I predict that we will eventually get a de facto national titling system. It will transcend the current system. There is now ample court precedent supporting it. Property confiscation will be a much more straightforward process. Seditious citizens will be able to have their assets stripped more easily.

November 1st Market Update -Social proof and working for a living; Never underestimate the NWO financial system

I have uploaded a podcast for November 1,2018. Click here to go to the show archives page to listen and look at the relevant links or you can listen on the link below. You can also right mouse click here to download the podcast.

-Dollar was clearly short-term overbought and gold/silver receive a nice bid
-Oil is not responding to weaker dollar. Hmmm…
-US stocks get through the month of October in one piece
-Social proof and the illusion of working for a living and depending on a wage
-We need to take advantage of the “flaws” of the monetary system, so we don’t fall further behind
-Never underestimate the TPTB to keep things going; The 20-year Japanese bond bubble.