10/11 Update – Central bank worries and asset prices; Libertarian logic fallacies

To download the podcast – Right mouse click here (duration 31:13, 3:30pm)

1) Inflationary expectations in the marketplace are still running counter to central bank concerns. I side with the central banks on this one.

Decoding Gauges of Inflation Expectations Is Fed’s Next Big Task

ECB Must Keep Monetary Policy Loose, Visco Tells Corriere

Five years; The Dow Jones Commodity Index (line) has outperformed all the other major commodity indexes, including the CRB Index (shaded area). Though commodities have lifted off their lows, demand has not followed in line.

Commodity indexes with multiple expiration dates have not followed much higher, and the long-term prognosis for commodities is still not promising. As demand shifts lower, the economy stalls, which allows central banks to lower rates and bond yields. These lower rates lowers the costs of capital and allows producers to lower their costs of production, which leads to oversupplied markets.

The large speculators will have to eventually cover these large short positions, pressuring the 30-year bond yield to move lower.

The strucural deflationary forces could become large enough for the governments to begin seriously experimenting with universal basic income programs.

2) The logic fallacies of the Libertarian and alt-media crowd. They cannot comprehend why we have such a corrupt monetary and financial system. As a result, these analysts continue to underestimate this system’s power to exploit the masses.

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11 thoughts on “10/11 Update – Central bank worries and asset prices; Libertarian logic fallacies

  1. Hi Chris

    With the World Economic Forum coming out and saying they want to do away with personal property and private ownership, do you still think acquiring revenue property makes sense? Also with major governments wanting a digital currency to track people and transactions, do you think landlords would be able to accept rent/make mortgage payments if they aren’t compliant with the system?

    I appreciate your work – many thanks!

    Scott

  2. Chris:
    Great podcast as always – thanks. One thought provoking point was that a degenerate society deserves a degenerate system, and actually prefers it to the alternative. You have mentioned before that our society is less Godly than in the past, and I don’t disagree. I have young children and fear for their future (but I guess all parents do to some extent). The rhetoric in schools is beyond comprehension to me and I see private school as the only way to go. Of course we still have to deal with the normalization of drug use (cannabis legalization) and the prevelance of hip hop culture that is far more sexual than that of the past. The question I have for you is what are other ways that you see that one can distance the young and impressionable from these un-Godly “norms”? It is getting harder and harder, espcially with churches closed. Thanks for your work here.

    1. Hi Karl,
      You do see the noose slowly tightening. It is slow, but it only goes in one direction. As adults, our ultimate goal is to be able to control as much of our personal lives as possible. The learning process starts when we are children. Of course, I still believe that a high school and college education are important, but not at the prices many universities charge. I would prefer a public 4-year, in-state school and learn something pragmatic. For me, it was Economics and math. I am grateful I took this route as it provided me the framework to be self-sufficient from a financial standpoint. This is why I have my blog. I hope to perhaps show others in our same situation on how to think and become more self-reliant. The alt-financial media does not do this. The process to self sovereignty starts at a young age.

      There is nothing we can do to change the primary and secondary school curriculum as it has been largely federalized. Though individual states can adjust it loosely, when a local tax jurisdiction receives federal money for police or schools, etc., it has to conform to the fed’s rules, or it doesn’t get the money. So, the optimal scenario is for homeschooling, but that is almost impossible for households now as they need two incomes to barely keep up. The next best is private school, but that is very expensive. The easiest is for the parents to ship their children off to the public schools. So, by taking the last choice, there really is no control over what our children see and experience for much of their waking hours.

      The good news is that we still do have a lot of control over our children. We need to live a more honorable life than the rest of humanity. We can’t get drunk, smoke pot, curse or swear, be sexualized ourselves, etc. We cannot be hypocrites. We can’t spend money like it’s burning a hole in our pockets. We need to be different than the rest.

      I thought many of the churches have opened up. I don’t know where you live, but the churches around here are open with their distancing (that is not much of a problem anymore as the true churches are a lot less filled than when I was younger). I always refer to the Bible in everything I do. I find myself quoting scripture and referring to the bible in most of my everyday conversation. It’s my calling card and people around me do pick up on it. Believe me, it has a huge effect, though I didn’t know this until I got older. I don’t view the stuff that other people watch on TV. Yes, I do watch Netflix and Amazon Prime, but there is enough decent stuff. I just try to set the best Christian example as I can and I pray a lot.

      I would hope your children take an interest in self-sufficiency. Not in the prepper way, but in the everyday way. Independent thought is so rare with the advent of the internet and social media. Hopefully, they won’t have to work at jobs long-term when they get older, which will only force them to compromise their integrity and worldviews. Hopefully, they can avoid all the common traps that ensnare their peers.

      Some children have the gift of introspection, while others do not. You just need to be around them as much as possible to make sure they don’t wander too far away from what is Godly.

  3. Chris, you are literally the only commentator in the alt-media whose predictions are accurate, certainly in the broad strokes. Your call on rising house prices is right on the nose, certainly for Ontario, Canada.

    Moving forward, I think the best approach, to keep mind and heart intact, is to do what I’m calling ‘walking between the raindrops’. Just dodge the madness, ignore the government and their sick minions (like Antifa/BLM), laugh at it and them, and focus on the future. Rather like living in the old Soviet Union. The survivors played along but didn’t believe any of it.

    The whole situation certainly resembled the Matrix movies quite a bit. I think in the future the population will be divided into four categories: The Blue pillers will stay in the system, no matter what. They think they’re safe. The Red pillars will fight the system, the preppers, boomers, all those fools. I’m half in their camp and hope to extricate myself permanently from their mental prison. I backslide sometimes, it’s like being a drunk falling off the wagon. They are trapped inside the Matrix just as much as the Blue pillers. They live in Zion. The other two groups are what I call the Barbarians of the Wasteland, and the Farmers of the Wasteland. The barbarians are the invaders and/or aliens populations within the borders of the empire, like the Hispanics, Muslims, Blacks, etc. They live by their own internal rules, are proto-states and will survive the degradation of this system into a dark ago. The Farmers of the Wasteland are folks like you (and to a lesser extend me) who understand what is happening and strive as much as possible to maintain a separate life. The danger is that lone farmers will not survive, we need a clan, so we too must become Barbarians of the Wasteland in the future. That’s it, rant over.

    In the past you’ve mentioned you are a holder long term of precious metals and expect them to continue to rise. Is this still your prediction or best guess?

    Best,
    Kris

    1. Kris,
      The best way to keep our sanity and longevity is to tune out the stuff that doesn’t directly affect us. Most of the stuff in the news is there to confuse and engender fear. For you and me, we should never remain subjective, but fully detached and objective. This advice may sound trite, but most of us cannot get to that level. There is just too much stuff that has the potential to get us angry and scared, but the ultimate result is that it overloads our abilities to process this stuff effectively. We end up never making poor financial (and personal) choices.

      I don’t waste my time with these promoted protesting groups. For instance, the left realized the violent protests were not helping their cause, so they discontinued them. It just fizzled out, yet so much energy was exerted worrying about it. We just need to focus on how this stuff affects us, and that is mostly through finances. I am just a pilgrim and a stranger and have developed a life that minimizes my impact with all those who are unwashed. I pay my taxes, but do not rely on the govt for much of anything. The best scenario for us would be to be as independent as possible from the rest of the world when it comes to making money. Everything trickles down from that. Life can be much easier, so we need to not focus on the day to day, but keep the large picture in mind when we make our decisions.

      You are correct, loners do need an outlet and a connection with other like-minded people. As the years go by, there are less of us around. Those who die off and not being replaced in large enough numbers. The internet is a great tool to communicate with others. I eschew social media, which is why I use my website. Though I rarely meet any of the people I communicate with on the site, I am comforted knowing that there are others out there.

      As for precious metals, I have been predicting that gold would go up long-term for the same reasons why I predicted the other assets classes would rise. Gold tends to track monetary inflation over the long-term, not general price inflation. It will always be a monetary equivalent for the nation-states and elites. With QE money growth and lower rates, i would expect the long -term trend to be supportive.

      The practical arguments for gold ownership are straightforward. It truly is money outside the system – free of encumbrances and lawsuits. Silver has been doing well, but gold will always possess less volatility and takes up much less storage space, so gold is the better choice for physical ownership. If we want to stick it to the man so to speak, i always recommend taking some excess cash out of the bank over time and buying gold. But keep in mind that once you get gold in physical form, there is not much you can do with it. You really can’t use it as collateral and it doesn’t generate passive income. It will always be a parallel money.

  4. People are dying from Covid. How can you say it was “manufactured”? I think the governments are trying to do the best they can.

    1. Hi. This may very well be the case. Indeed, we have seen where the numbers have been influenced by direct payments to hospitals and such to list causes of death as Covid. Even if there are other direct causes, by listing covid on the death certificate, the hospitals receive money. There is a monetary incentive to test as many positive outcomes as possible and to list as many sick as they can.

      But we need to remain focused on the main point here. I suspect the virus was bioengineered and the fact that it seems clear that it was burped up in a Chinese bioweapons lab is being intentionally left out of the discussion. We are all part of a high tech delphi technique campaign, and such talk has been excoriated by all the global MSM. Thus, i have to conclude that the narrative (horrible illness, debilitating the economy, vaccines only answer) lends to one outcome. The desired result is a vaccinated population, which will be be more dependent on government. The PTB can only achieve this by capping economic growth and demand, so they can lower rates. This will empower the governments, while at the same time, consolidate the global wealth.

      Whether or not the virus and disease is genuine is less important than what we discuss. It has become a controlled crisis with a limited range of discussion that has been exploited to demoralized the people, while gaining control over their lives and wealth.

  5. Thanks for the analysis. Didn’t realize the differences in commodity indexes. Any thoughts on commods and the dollar? Commods have done well. Concerned about the dollar after the election.

    1. As someone who sees this system as being portrayed intentionally as unstable (though it isn’t really), the USD will remain in control for now and the USDX should not move lower than 90 or so. If we see more uncertainty, it should actually rise from current levels. With this said, the rest of the globe is looking at the US and its manufactured crises with great concern. But for now, there really is no alternative, and the fact the the UST yield curve has collapsed relative to the other major nations and the USDX is still at this level is testament to the power of the dollar.

      It’s difficult to lay out a secular bullish thesis for commodities in general, and though many of them have responded well to the central bank stimulus programs, the demand is still lacking. I also have to think that the supply chain is still being influenced by the Covid crisis, and market supply is still not up to 100% on many fungible commodities.

  6. Excellent and insightfull commentary! I agree with your analysis of the “degenerate ” society. Christ will judge the nations in a soon coming day.

    Two questions please:

    1)What are your thoughts Chris on the new digital currency coming out in Europe next year,and, also the Libre world digital currency slated for 2023?
    2) Davis, Armstrong and Rosenberg are calling for an equity market correction like this past April…..a 25% drop to start right after the election going into late January 2021 before stabalizing. Do you see this happening?

    God bless,
    Gary.
    Canada.

    1. Thanks. This is a spiritual battle and we can’t change the course of events, but we can change our individual lives to move forward successfully. Too many people prefer this new system, so I do not get upset anymore.

      1) Interesting you mention the cryptos. I came across this article that was published this morning,

      The ECB is looking ‘very seriously’ at the creation of a digital euro, president Christine Lagarde says,

      and it explains the push by the ECB to create a digital euro based on blockchain. The need for the ECB to create a digital euro is much more important than for the Fed to develop one as their rates are already sub-zero. Lagarde says that it will never be used to replace cash, but she knows that it will eventually have to, as cash cannot be allowed in a negative rate world. With cash, we can make money just holding it, and that will ultimately never be allowed.

      Notice how the ECB management and puppets are saying the COVID crisis has accelerated the need for the digital euro. Once again, we see how the central banks have exploited the Covid crisis as an excuse for control and development of goals that normally would not have been popular. Crisis begets reaction, which begets a solution.

      As for the Libra, I have to believe that a privatized and regulated blockchain coin will be the ultimate goal of many and that the decentralized ones will be deemphasized. We have not see much development in the btc-type blockchains as consensus is almost impossible to achieve. But the technology has been developed to the point that the large players can exploit it for their gain and control.

      2) Stock market corrections are always inevitable, and we may indeed get a “25% correction”, but it won’t be from current levels. As long as interest rates continue to remain suppressed and fade over time, the investing pool and traders will not allow prices to drop that much from this level. The only way we can get a 25% correction is for the indexes to move higher to all time highs and then some. Only then can we have that type of correction.

      The only way we could get a 25% correction from current levels is for some sort of major exogenous factor to come into play. The uncertainty with the election and Biden’s tax policies are already priced in to the market. It would have to be something catastrophic, and I think the PTB have already achieved enough of their agenda for now with the manufactured Covid crisis.

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