Member Info for booboouberbear

The market is trying to figure out what comes next.

The US Jobs Data just released shows there will be an outright contraction in US GDP in December / January and this is now dawning on the FOREX markets what this means, hence why the US Greenback is being slammed. US Benchmark Treasury Yields are rising to 1% and the Fed will also have to step in at some point and crush the yield because if it goes too far the lights will go out on the US Economy.

It’s going to take trillions of printed FIAT and hyper-inflation to sort out this mess over time.

All hard assets will go interstellar once the shakedown comes.

https://markets.businessinsider.com/news/stocks/us-dollar-crash-high-chance-double-dip-recession-roach-2020-9-1029618113#:~:text=The%20US%20dollar%20could%20collapse,%2Dcycle%20recoveries%2C%20Roach%20said.

For my money this guy is calling it spot on.

US looks likely to suffer a drop in GDP in Q4 2020 or Q1 2021 and the Greenback is tanking. Joe Biden is going to run very large defects for the whole term of his 4 years in office and you have to think Roach is spot on here.

COVID passes this is still the reason for owning the shiny stuff…

https://fee.org/articles/why-2028-could-be-the-year-the-us-debt-crisis-finally-hits-the-fan/

Inflation will get carried away with itself long before interest rates rise. Any meaningful rise in US Interest rates will all but obliterate the US Banking System and throw tens of millions out of their houses.

Looks like another US Recession is on the cards in Q1. Not that you’d know it with the stock market indices or house sales / prices (the latter of which is approaching a hysterical bubble) but Unemployment Claims are on the rise again and if the CARES ACT expires at the end of December with no extension JP Morgan is anticipating a 1 to 2% contraction in GDP in Q1.

The detachment between Wall Street and US Main Street is so staggering it’s hard to make any sense of it.

It’s a very odd scenario at present, USD Index is still getting sold down but so are all the PM’S. Crypto Currencies flying to new highs. Odd. You can only imagine there is a huge outflow in the Gold / PM Funds that will soon become clear and getting put into other rotations, Dow may set another record today looking at the futures.

It appears the Vaccine Trade is the only game in town, even though JP Moragn is now predicting a recession in Q1 in the US, it will take a while for that to pass, but it will.

https://www.google.com/amp/s/www.bbc.co.uk/news/amp/business-55051511

Tells you what Biden is thinking in terms of using the federal reserve to deliver fiscal policy via monetary means. A way to use the power of the Fed to circumvent Congress?

https://tradingeconomics.com/united-states/existing-home-sales

Now approaching 2005 / 2006 levels of hysteria. Forget the bubble in the stock markets, it’s got nothing on what is happening in the US Housing Market currently.

This is of course the Federal Reserve that has pumped this bubble through their Mortgage Security purchases (they now own over a third of all US Mortgagees and it’s going north fast). There will of course be dire consequences when inflation starts to show in 2021 after the vaccine allows full production again in the workforce and the Fed has to raise interest rates to contain it (which they can’t do because they will destroy their banking system and default 10’s of millions of people on their zero percent mortgage interest rates).

A real toughie, let inflation rip or throw millions out of their houses, this is what awaits future policy makers.

Rough ride into 2021 (especially for the US). The vaccine will probably come to the rescue largely HS 2021, but before then you can see another recession in the US in Q4/Q1 unless congress act. The CARES Act withdraws all of its final protections at midnight on December 31 2020, that means eviction protection and gig economy / self-employed protection (there is still 8m sitting on that) will run out and then you will see the real car crash. They may be determined to draw this out and make harder for them but ultimately they’ll have to inflate to oblivion.

There is 100% more stimulus coming, we can debate what kind of form it takes, but it’s coming, if Congress don’t take action, the US Federal Reserve has said it will, god alone knows what that would entail other than creating a Housing Bubble beyond anything ever seen before (truth be told we they are already there).

Any reason why the US Dollar is down but AUX is also down? And why Bitcoin is up 6%?

Is this just a case of people pulling money out of AUX and into Bitcoin and chasing the investment?

The US Monthly Budget Statement is one of the true datasets left that is released by the US Treasury / US Government. Because of its raw dollar terms it can’t really be manipulated like other datasets are.

It an eye opener how much (and on what) the US is racking up in terms of budget deficits:

The US posted a budget deficit of USD 284 billion in October 2020, the fiscal year's final month, compared with an USD 134.4 billion gap in the same period last year and market expectations of a USD 274.5 billion gap. Outlays jumped 37 percent to USD 22 million, nudged by Medicare (96 billion), Social Security (93 billion), National Defense (80 billion), Income Security (73 billion), and Health (63 billion). Meanwhile receipts dropped 3 percent to USD 238 billion, as higher Federal Reserve earnings and excise tax collections offset lower personal and corporate income tax revenues. source: Financial Management Service, US Treasury.

Long term the mandatory spending portion (e.g. Medicare and Social Security) of the US Budget is a disaster waiting to happen as 73m baby boomers plough into retirement and old age.

You could very well be right. The issue with the short term is that Covid dominates all of the market sentiment and as such there will be no clear thinking in AUX prices probably until Spring 2021 and the fog starts to clear somewhat to what the medium to long term price action will be for AUX.

Until then the AUX and PM Markets be probably be quite wild. As ever COMEX has used this opportunity to short Gold and the PM Complex to oblivion.

And at current rates they will have to do another re-floatation package in about March of 2021. And the US will be no different of course. But as I have said that in itself shouldn’t be your long term investment strategy in AUX. For that refer to US Budget Deficit projections in the next 10+ years (and that is even using the sunny side up data from the CBO).

If you are invested in Gold for the long term, then Covid-19 and it’s fallout is just a tiny blip in the road. The issue you really need to think about is the United States unfunded liabilities going forward on the people who are alive today and the 73m baby boomers who are about to require some of the most expensive healthcare in the world that is all borrowed on ‘the Slate’ so to speak.

If you add in Social Security and Medicare unfunded liabilities, you get to a figure of $120 trillion. Not a typo, $120 trillion!

If you are asking how does a country and currency who’s annual GDP is some $20 trillion afford to pay future unfunded liabilities 6 times there economy? The answer is they don’t.

It’s why the idea of Trump v Biden is lamentable, it doesn’t matter, the eventual end route for America is the same. This is a slow moving disaster decades in the making since LBJ brought in a system and a serious of promises that simply couldn’t be met. 60 years of can kicking later the size of the problem will only come to a head in the next 5 to 10 years when the Social Security and Medicare commitments required by the baby boomer generation dwarf all before it. You haven’t seen budget deficits yet!

My own guess is after inflation and debasement the American public will be lucky to see half of these promises and with it Gold and PMs go to the moon as Greenback goes the way of the Venezuelan Dollar!

There will be no difference between a Biden or Trump Administration. It will be 10%+ budget deficits for the next 4 years backed up by the US Fed monetising that debt and gobbling up trillions in the debt and securities markets. If you have your favourite pensioner out of these two fair enough, but there long term commitments are north of USD$100 trillion and sooner or later economic gravity with brake the greenback.

P.s always own some physical gold because if / when the dollar / every other western currency plummets you want to be holding physical gold, every other economic crash / inflationary super cycle has shown us that.

Looking at America’s long term spending commitments such as social security and Medicare for the baby boomer generation it really doesn’t matter if it’s Trump, Biden or the Ghost of Teddy Roosevelt, America will be running trillion plus deficits (and the rest) for the foreseeable future.

Markets are foaming at the mouth at the prospect of a big Biden win and wheelbarrows of cash being printed.

All possible. The money going out the door in western countries is phenomenal and it’s ramping up this weekend.

All of the new shares / Barrick shares are due for admission / found new hands in to the market at 8am this morning, which is why we will have this flurry of notification RNSs.

We should find out today / tomorrow who were the well-endowed souls who took up all of these shares.