1st Quarter Closes With Smiley Faces
1st Quarter done. OK, maybe not everyone has smiley faces - like those who use their brains. But you know that Wall Street and their shills will make the most out of a positive quarter for stocks - at least the major indices.
Anything to keep people invested, better still, put more money into the stock market. That's their game.
So if you're under-allocated to stocks, you were a loser, right? Wrong. Gold - and the mining shares - did quite well. Of course, most folks don't have much of an allocation to it, so it may not have much positive impact. But if you did, you're, er, golden.
Bonds, on the other hand, have been a real ping-pong assets this year. The unwinding of the great bond bull market that began in the early '80s slowed down, even reversed for a bit. So bonds may not have stuck a shiv into your portfolio as they did last year. But you may want to be cautious with any allocations that aren't short-term bonds.
All of this quarter-end stuff will serve as a distraction if you let it. It's always that way. Shills and pundits feel compelled to comment endlessly about what happened, why, and what's going to happen going forward. Meanwhile, the relevant issues get pushed to the side. What's relevant: the Bear Markets in stocks and bonds, inflation, and the economic recession that's either already arrived or soon will.
You can even make a case for Gold and Precious Metals being big deal, if the Bull Market that launched in 2000 gets new legs and takes off over 2,000. While Gold did flirt with 2,000, it appropriately was slapped in the face and has settled below now. That's what happens when items hit their "resistance." And a Big Round Resistance Number like 2,000 typically takes a lot of attempts before it's definitively broken through - something like laying siege to a big bulky medieval castle. It takes time. But once breached, all hell breaks loose. And "hell" here would be when 2,000 switches from resistance to support and the PMs begin a skyward trajectory. Actually, it's more like heaven than hell if you own gold.
Oh, and let's not forget those the whole banks collapsing thing. You'd think everything had stabilized to the point where the danger has passed. Good luck with that.
So re those bigger issues, let's take a gander at one of our Brain Trust and their recent analysis of what's up and what to expect - and what to do about it. Here goes:
- Will be a lot of trouble stemming from terrific losses in the bond market – SVB (and others) bankruptcy just the tip of the iceberg.
- But too soon to tell whether symptomatic of other institutions
- 1967 – The first crack in the Bretton woods monetary system
- CBs now buying more gold than have since 1967 – Have CBs smelled something?
- USD will emerge with less buying power than it has now.
- Re laddering bonds: best to wait for higher yields
- FED – Watch to see if they pause or continue raising rates/if balance sheet reduction rate continues as is.
- Possible that Fed Funds rate will be double next year.
- Pretty sure we’re headed into a long-term bad time for stocks and for bonds
- 60/40 was good advice since 1981 – that’s not the case now.
- In for some rough times and people are not used to this.
- Cites movie “The Best Years of Our Lives” as showing a time when we were much tougher (70+ years ago)
- WDS: If breaks below 20.25 “may” sell – Yields now over 11%
- NB: Fed selling securities over last year but has sold proportionately fewer mortgage-backed securities. Now 31% of total assets. Fed never was supposed to be buying mortgages: Are they concerned about the mortgage market?
- M2 Money Supply has been plunging
- Gold: Have bullion as the lion’s share of PM holdings (LWM has this.)
- 2 best areas to invest: rising interest rates and Gold.
- Re National Debt now $31 Trillion: More than half coming due in next 3 years. Average yield now 2.4%. What will happen when the existing debt comes due? New rate will be hundreds of percent higher.
- Big Tech Companies (cites MS, Appl, Meta): holding $Billions of Treasuries with unrealized losses.
- See Buying Power charts from 1792 – Notes 1863 and forward USD buying power increased (doubled) until early 20th century.
- NVO: Discusses this company: medication can eliminate Type 2 diabetes and reduce weight. Weber taking it, swears by it. Adds to portfolio on 3/14.
- Gold: Keep short-term expectations low.
- Holding down of interest rates one of biggest financial blunders in post-1914 world – will now begin to feel the consequences.
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