Another Big Jump in Stocks to End the Week
We've had a another big jump in stocks to end the week. If it left an impression, don't be surprised. The impression derives from emotion. Emotions are an enemy when it comes to investing.
Is that why stocks jumped? To elicit emotions? More specifically, to elicit elation?
Elation? Sure. It feeds a desire to either buy or hold stocks. And that's what Wall Street wants - always and everywhere. It's how they make money.
Last week we posted our monthly review. The point was to offset emotion with some slug of facts. Facts can offset emotion. But you have to want to find facts, as well as understand them. Lots of folks find such an endeavor a real pain in the neck. So for such folks, emotions will always hold sway.
Indeed, lots of folks life their entire lives being ruled by emotion. Do you know any of these sorts? If so, are you repelled by the idea of being like that? If so, you're likely either a fact-seeker or are at the very least open minded when confronted with facts.
That's one reason post the notes we take from our various "Brain Trust" sources. We pay for and study their scribbles because we believe they seek facts and we have come to respect their interpretation of those facts - even if we don't always agree with them. At the very least, they stimulate our thinking. And at times we follow their recommendations.
Why are we going through all this? There are a number of reasons. For now, let's go with this: We've entered a crisis. We don't know the extent of it. We do know at least one component: credit. Banks aren't lending, so liquidity is drying up. That means credit crisis.
Oh, and since we're talking "crisis," let's not ignore the banking crisis.
You know the banks who've failed, right? We're told that's all under control. The banking system is sound.
Right.
Maybe you believe that. Good luck.
From our perspective, the assertion that we're entered a crisis, and that part of that is a banking crisis, are facts. If you're unclear of why facts are so important - critically important - re-read our remarks above.
Meanwhile, why not peruse these notes from one of our Brain Trust. There's facts embedded in there. Or course, they're just notes, to you've got to read and think. And like those who can't be bothered with facts, lots of folks can't be bothered with thinking. If you're one of those, don't bother reading the Notes.
Oh, and this particular set of notes includes remarks about gold confiscation. Could it happen again? Again? Well, if you know anything about Roosevelt and the 1930s, you know he "banned" bold ownership - or something like that. So this Brain Trust guy took the time to dig into the facts about what really. It taught us something we didn't know. Facts are funny that way.
- “Lost Decade” has begun: 2 years ago S&P was 4181 on 4/1, recently closed 4.146. Would have to go back to 2007-2009 to find worse.
- Avg person in no better financial shape over last 2 years; some communities worse
- 2022 “stomping” of bond market: We are just beginning to pay for this – For the 1st time in centuries government bonds of the most important nation were horrible investments.
- 1st 2 months 2023: CBs buying gold at fastest pace on record for 1st 2 months of a year (Compare 20 tonnes last year/125 tonnes this year) – this after record buying last year.
- Big CB buyers: Singapore, Russia, Turkey, China, India
- Beginning of the USD being replaced as main reserve currency (but only beginning) – If that happens, living standards will noticeably fall.
- Which other currency or currencies might replace it? China’s Yuan gets all the notice, but W thinks Gold would be the better choice. – In any case, no single currency has the standing to replace USD
- Few understand that we are seeing Gold start to play a bigger role in global payments system – a historic reversal.
- Gold “confiscation”: See CW analysis – first, notes that few actually turned in Gold in the 1930s as there were various exceptions; also, numismatics and jewelry were not included. So who was really affected re having to turn in Gold?
- Either the world will now begin to recognize “the eternal verities” or will slip into a Dark Ages. (?)
- If you are concerned about confiscation, then hide it and/or store it overseas.
- NB: Silver was not confiscated in 1930s
- NB: By the end of the 1960s, a powerful US thought it could do anything: Social Welfare, War, put man on the moon. But shortly after the first moon landing, 1971 default on USD/Gold exchange began a long deterioration of USD, putting US on road to “disaster.”
- Breaking through nominal high for gold (2.063) would confirm resumption of Gold Bull Market – In real terms, 2,425 would have to be surpassed to establish a new real high.
- NB re Silver: All-time real (vs. nominal) high price would $138/oz.
- If USD Index breaks below 100, would be in clear Bear. Once heads into low 90s, would reassess. For now, hold UDN.
- UDN and Gold are best holdings to counter USD decline, even better than holding other currencies.
- Robert Mish provides analysis of current PM coin prices/premiums.
Lost decade? Serious stuff. US dollar being replaced as the reserve currency? Serious too; but timing is everything.
Gold? Yeah, it's likely going to be more main stream than it's been in decades.
And let's not forget...
Interest Rates: Many believe rates will come down. Will be shocked when it becomes clear rates have a long rise ahead – a New World.
A lot going on here.
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