December 12th Markets Update – The Fed to buy “Coupons”; Those who say the markets are rigged, fixed, or cyclical cannot be trusted

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-These markets are not rigged nor fixed. The price performances of the major asset classes are a direct manifestation and result of the significant changes to the monetary and fiscal policies over the past decade.
-Those who correctly interpreted these dynamics have profited with confidence. Those who couldn’t comprehend the economics behind these changes made the worst investment decisions and dispensed the poorest advice.
-Jerome Powell’s press conference yesterday offered a very revealing clue as to the future direction of the asset markets. One comment overshadowed all others. I took note.
-Powell stated that the Fed will probably begin purchasing coupon-bearing Treasuries soon; these are longer-dated notes, over a year in duration at issuance. We have been discussing for a while that this needs to be as QE can never end and that the assets on the Fed’s balance sheet must climb, so that rates can move lower and that the Federal government can stay in business.
-Those who keep saying the markets are fixed or rigged do not understand intermediate economic theory and should not be dispensing their garbage advice.
-Gold couldn’t stay higher today and fell sharply. The COT is still extremely overbought; more than last week’s COT.
-Real estate in the U.S. is still attractive. The areas that I have been recommending to my readers (former industrial and Rust Belt cities are on tap for the best returns in 2020.)
-One reader asked me about Spokane, WA real estate last month, which I recommended, and it was listed as a hot spot for 2020. The hottest housing markets of 2020 are far from the coasts
-The Dow and S&P 500 put in new all-time highs. Most of the bullishness came from Powell’s comment yesterday that the Fed will start buying coupon securities again.
-Building the first million is the toughest. After that, it gets easier; as long you do not listen to the people pushing the ideas of fixed and rigged markets, or peddling the cycle trash.

Response to a subscriber: KGB-trained Putin equates Communism with Christianity

A message to Vladimir Putin; There is nothing Christian regarding Communism nor the present Russian regime
Soviet Communism; Any form of government that kills 60 million of its citizens to consolidate its power cannot be trusted and certainly is not Christian

Note: These types of comments from Russia’s Putin should serve as a warning to those who still see him as some sort of champion who wishes to overturn the new world order. I strongly suggest to avoid any outlet that refers to the pro-Russia narrative. Shill outlets like Russia Insider, RT, and ZeroHedge have another agenda and that is not to spread the truth. They were established to mislead the West and spread its pro-Soviet propaganda. Moreover, their advice will impoverish their readers. My suggestion; do the opposite of what these propaganda charlatans advise.

This email is in response to a subscriber who forwarded me a link to an RT article from last year. I found it quite sobering and wanted to share the story with my readers.

Putin: The leopard doesn’t change its spots

Russian President Vladimir Putin has likened communism to Christianity and Vladimir Lenin’s mausoleum in Moscow’s Red Square to the veneration of the relics of saints.

“Maybe I’ll say something that someone might dislike, but that’s the way I see it,” Putin said in an interview for the documentary Valaam, an excerpt of which was broadcast on Russia 1. “First of all, faith has always accompanied us, becoming stronger every time our country, our people, have been through hard times.

“There were those years of militant atheism when priests were eradicated, churches destroyed, but at the same time a new religion was being created. Communist ideology is very similar to Christianity, in fact: freedom, equality, brotherhood, justice – everything is laid out in the Holy Scripture, it’s all there. And the code of the builder of communism? This is sublimation, it’s just such a primitive excerpt from the Bible, nothing new was invented.”

Putin went further by comparing the Communists’ attitude to the Bolshevik leader Lenin to the veneration of saints in Christianity. “Look, Lenin was put in a mausoleum. How is this different from the relics of saints for Orthodox Christians and just for Christians? When they say that there’s no such tradition in Christianity, well, how come, go to Athos and take a look, there are relics of the saints there, and we have holy relics here,” Putin concluded.

After Lenin died in 1924, his body was embalmed and put on display in a mausoleum in Red Square, Moscow. The cult of Lenin was part of Soviet ideology. The public debate about the possibility of giving Lenin’s remains a proper burial began during the early days of Perestroika in the 1980s.

Putin’s words were music to the ears of Communist Party members. “I think these words of the president very effectively and reasonably smooth out the acute angles around the theme of the mausoleum,” Deputy Chairman of the State Duma Ivan Melnikov said on Sunday, as cited by Interfax.

Putin: Communist ideology similar to Christianity, Lenin’s body like saintly relics, RT.com

Vladimir Putin can claim that Communism is Christian, because his government no longer eradicates its priests and destroys its churches, but after killing 60 million of its own citizens, it no longer has to kill and destroy. Three generations of those raised under Soviet Communist rule were brainwashed and punished into submission. That residue exists today; very few dare to speak out against the current Russian dictator, Vladimir Putin.

There is nothing Christian about Socialism and Communism

Christians were instructed to give freely to other fellow Christians and to help those who spread the Gospel to the unwashed and unsaved. Jesus and the apostles told us to withdraw from those who refused to listen to this message and not to give to those who clearly refused to act in a Christian manner. Jesus didn’t instruct his apostles to open charities and give to everyone. He didn’t recommend that governments force taxes on the citizenry to fund benefits for everyone. Jesus told us that if a man refused to work, he shouldn’t eat.

Never forget this one important point; there is nothing Christian regarding Socialism and Communism.

With socialism, your punishing tax burden funds social largesse and most of these programs have nothing to do with promoting Christian ideals. I think of welfare programs that encourage birth out of wedlock, fornication, laziness, and its recipients to remain unmarried. I think of the promotion of abortion as well as the antichrist programming in the public schools. I think of the promotion of new world order ideals, such as homosexuality. I don’t think Jesus wished to advance the concept of an overbearing police state that tracked the actions of its citizenry.

Now, imagine you decided you didn’t wish to give to the government programs that promoted the NWO agenda. Imagine if you withheld paying a portion of your taxes, because you contested war based on your Christian principals. In most nations, including the U.S., you would lose your assets and would be jailed. In many nations you would be killed. There is nothing voluntary about socialism and with communism, avoiding its power would definitely result in death.

Is Communism remotely close to Christianity? Absolutely not, but in Russia’s case, maybe Communism resembles the ideals of the compromised state-sponsored side of the Russian Orthodox Church.

Despite what the pro-Soviet propaganda says, the United States is the only country left that has a modicum of freedom of speech. We may be banished on social media and treated like a pariah by our friends and family by saying things that are not P.C., but the last time I checked, I can still say whatever I want, as long as I do not threaten harm or libel others. Try to do this in Russia and see what happens.

December 4th Update – Markets in focus; Realtor.com surveys; Who profits the most day trading stocks; What if student loans are forgiven?

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-Stock move back up. Who makes the most from stock and index day trading? It’s not the guy looking at the charts. My thoughts based on my experience at Nasdaq.
-I can easily see a scenario where some close to Trump know beforehand about what he will say and can trade on that.
-Gold looking better as the COT has unwound some of its open interest. The Commercial shorts are still above 300k net short.
Realtor.com 2020 Housing Survey came out this morning. What I think in light of Realtor.com’s 2019 Survey.
-The ones who really benefit from student loan debt forgiveness and how can we benefit, even if we don’t have student loans. Discussion of a Forbes article titled, If $1.6 Trillion Of Student Loan Debt Is Forgiven, This Is What Happens, and what it omits.
-If social spending increases and debt forgiveness becomes a reality, look for the U.S. numbers in this survey to move higher and approach those of the developed socialist nations.

As we predicted; Australia’s real estate markets shoot higher

Could it be? Australia’s real estate markets are now booming

Since January, we expected the unexpected and told our readers to prepare for a market rebound

  • The Australian Government and RBA would not tolerate a protracted housing downturn.
  • The world is awash in trillions of new U.S. dollars, sovereign debt securities and, Treasuries. Australia is an attractive dumping ground for these dollars. High-end global real estate is effectively priced in U.S. dollars.
  • The Australian dollar is near its cycle low against the USD.
  • The global central banking cartel is in complete control and is not ready to give up on its system. Low rates would prevail.
Local residents may think Sydney housing is expensive, but the people with the trillions of USD around the world do not think so

National property values jumped 1.7 per cent last month, the largest gain since 2003, according to data from CoreLogic Inc released Monday. Sydney and Melbourne continued to lead the rebound, with prices up 2.7 per cent and 2.2 per cent respectively.

Annualised gains over the past three months in both cities are tracking in the mid-20 per cent range, CoreLogic said. At that rate, home values will recoup all their losses from the recent downturn and be back at record highs early next year.

Adelaide suburbs top the booming markets

“The Australian housing market is now five months into an unexpected period of rapid recovery,” CoreLogic research director Tim Lawless said in a statement. “The question is, how long can such a high pace of capital gains be sustained?”

The housing rebound is a complete about-face from just six months ago when economists were debating how much further prices could fall.

In addition to record-low interest rates and a loosening of lending curbs, prices are being driven higher by a shortage of properties on the market. That’s led to a renewed fear among buyers that if they don’t jump in now, they could miss the chance to buy.

Australia home frenzy back as prices surge most in 16 years, Bloomberg, December 1st

Source: Adelaide suburbs dominate top 10 booming suburbs, news.com.au

Recall the propaganda articles from ZeroHedge like this one titled, Australia’s Imploding Housing Market Now Threatens To Unleash Nasty Recession. The alt-financial media were pumping out this garbage as recently as this Summer. This particular article was dated May 15th.

Recall this July 19th article from ZeroHedge, titled These Two Charts Reveal The Extraordinary Collapse In Australian Homeownership.

All year long, I had been advising Australians to take advantage of that slowdown and bid at the subdued auctions and to start deploying cash, because the malaise would not last. Even Australian TV was pumping out this gloom of contraction and misery. However, my conclusions differed from this simple “analysis” for four reasons:

  • The Australian Government and the Reserve Bank would not stand for a protracted housing downturn; they would begin to soften monetary policy to achieve this objective and had plenty of room to make it so.
  • The world is increasingly awash in trillions of new sovereign debt securities every year, mostly in U.S. dollars, and these dollars need to find a home. I suggested that Australia would prove to be an attractive dumping ground for these dollars. Global real estate, especially in the cities of influence, is effectively priced in dollars.
  • The Australian dollar is near its cycle low against the USD and those with the U.S. dollars view Australian house prices as attractive.
  • The global central banking cartel is in complete control and is not ready to give up on its system.

Why fight the trend? As an American, I view much of Australia’s housing stock as being relatively attractive when priced in U.S. dollars. How long will this comparative attractiveness last? It’s all up to the U.S. Fed’s dovishness and I am banking on more of the same.

 

Mainstream business covering for the central banks only ensures higher asset prices

Double-mindedness in the business press guarantees more of the same
As long as the central banks keep the growing debt pile in service, economic growth and inflation will sink, which will require more fiscal deficit spending, which will require more debt, which will require more QE
  • As long as the central banks buy up all the debt required to keep rates moving lower, the markets and asset prices will move higher
  • My personal observations; small and less knowledgeable investors are becoming increasingly comfortable with risky speculation
  • Since 2008, the world’s net savings has no longer been able to fund sovereign borrowing needs without the additional “demand” from the central banks
  • Despite stories to the contrary, global investors seems willing to allow the  central banks to continue their sovereign debt buying campaigns
  • Though most economists claim that negative yielding debt poses a systemic problem, I claim that this is actually the only viable solution given the direction the central banks chose. The amount of it will grow over time as the global economy sinks in a sea of deflationary and over-supplied red ink.

I received an email from a reader:

You’re kinda hinting at a gut feeling that a significant crash is incoming … well, that crash is well underway across the globe … so commodities will weaken.

The rich world is still hanging in there as the periphery is crushed and burnt, but probably not for much longer, 2020 will probably be a painful year.

C.H.

For those without the assets, their worlds have already crashed
Crisis, reaction, solution. Be patient as this can last for years

I understand this reader’s concern at what is transpiring, and while I do agree that a major crash is coming, I submit that the central banks have their agenda under control. With QE and falling rates, this banking cartel has placed the entire global economy on an indefinite IV-drip, and it now controls the world’s destiny. I submit that the globalists have a course of events planned in the future, when at that time, the central banks will prove powerless to overturn the laws of gravity. Of course, historically speaking, that has always been war, but for now these QE programs have proven effective.

There are many out there (former readers and subscribers) who do not agree with this assessment, but we are now entering 2020 and are still here discussing potential catastrophes. Most in the alt-financial media have stood by in disbelief all decade as the financial system levitates higher.

The mainstream press runs cover for the central banks
The current world economic situation could be the exception

I get it; regardless of what Solomon wrote in Ecclesiastes, we are indeed experiencing unprecedented circumstances, but that does not mean things will cave soon, and arguing from incredulity has never proven profitable.

Okay, let’s turn back to the point of this article; consider the mainstream business press, which runs cover for the central banks.  I came across a Bloomberg article published earlier today that illustrates my point about a complicit business media. After reading this article, I do not know where the author (or Bloomberg) stands on the matter of the central bank government debt-buying or the massive fiscal stimulus programs being contemplated. This tells me that more of the same is coming.

Now, as policy makers grapple with the slowest growth since that era, a suite of options on how to revive their economies share a common denominator: yet more debt. From Green New Deals to Modern Monetary Theory, proponents of deficit spending argue central banks are exhausted and that massive fiscal spending is needed to yank companies and households out of their funk.

Fiscal hawks argue such proposals will merely sow the seeds for more trouble. But the needle seems to be shifting on how much debt an economy can safely carry.

Central bankers and policy makers from European Central Bank President Christine Lagarde to the International Monetary Fund have been urging governments to do more, arguing it’s a good time to borrow for projects that will reap economic dividends.

“Previous conventional wisdom about advanced economy speed limits regarding debt to GDP ratios may be changing,” said Mark Sobel, a former U.S. Treasury and International Monetary Fund official. “Given lower interest bills and markets’ pent-up demand for safe assets, major advanced economies may well be able to sustain higher debt loads.”

The Way Out for a World Economy Hooked On Debt? Yet More Debt, Bloomberg, December 1st

All I know is that people continue to spend with reckless abandon. The streets around my community are clogged and get more crowded all the time. These sheep cannot stop pissing away their money and will spend themselves into oblivion. They are the great unwashed that keep the economy and asset markets moving higher. Thank them for their spendthrift ways and do the opposite. What is bad for us (personal spending and debt) is good for the economy. As long as we prepare for the inevitable, we will manage, regardless of society’s circumstances.

We should be less concerned about things we cannot control and more careful about our own affairs. Move forward in this reprobate world and trim our wicks. As long as the establishment outlets run cover for the status quo, we have more to come.