RE:RE:WafflesHey Fordster. I guess based on your contribution I owe you a few words before I try and grab a few hours sleep :)
First thing.
In mid 2019 I was convinced we would see some type of event that might trigger a larger market decline.
At the time my thinking was either defaults on student loans or car loans. Doesn't sound major but the web of debt is far reaching.
Sept 17th I thought I had been vindicated. The REPO market was not so much in the news, which made me crazy but I thought there was much more to the story then was being told.
If a central bank says, there's nothing to see here and not to worry, I get thinking.
Almost 1T missing dollars later I started to hear about this random virus. hum....
By the end of Jan I had a freezer full of food, cash out of the bank and tried to warn many of my loved ones. They told me to relax.
Now.
So 2 main things. Stock market is at all time highs and gold is close to nominal highs. So you have to think this one threw.
Stock market all time high = Optimism
Gold close to all time highs = well, us gold bugs are a paranoid bunch so you have to keep that in the back of your mind. so pessimistic.
So in my mind 1 of the 2 is wrong. I just don't see how that's possible. So the questions which one is wrong?
Without going on a rant my conviction is that the stock market is wrong, and not only wrong SUPER wrong.
So I've been feeling like a guy walking through a dark room just waiting to get smacked in the face by a baseball bat.
So I dig, trying to see if I could spot where it could come from. Remember, if a correction happens it's a reaction from an action therefore the action if you look hard enough will be present for anyone to see, but only if you look.
Bond guys are by far the smartest guys in the room. We have a world wide debt problem. I tried to explain it to people close to me that know very little and used this to help illustrate the point.
Jimmy walks into the doctor's office and says, How's my checkup doc?
Well Jimmy, looks like your 2 packs of day worth of smoking caused you lung cancer.
Jimmy says, that $ucks doc, what can I do to rid myself of it.
Doc says start smoking 10 packs a day instead of 2.
Haha, funny stupid story but if you have any ability to critically think threw this problem we face can you honestly tell me the solution to the biggest debt problem the world has ever see is NORE debt?
Bull$hit.
Assets are valuables not FIAT currency but the problem is that debt has made its way into almost every single asset class and has completely destroyed all it's value.
Personally anything that has its value ties to debt, I'm out of. EVERYTHING. Take some time to think about this point because it might make the difference between paying for your own groceries or receiving food stamps in the future.
Now, are we seeing early signs of hyperinflation? I say yes
BUT
Could this rise in rates destroying the value of bonds be a set up? I also say yes.
Why are bonds getting hammered in the middle of the night when the Central Banks are sleeping? lol Only to start the morning off buying them back up. Seems very odd to me. Makes me think if I was a central bank... would I welcome someone driving the price down so I can monetize the debt at lower levels? Seems extremely convenient especially when you factor in that hardly enyone is dumb enough to buy their new bonds so they can pay off their current maturing bonds.
So I see 2 potential plays here. And yes if I'm right gold gets hammered, add if silver can't move up when you can't even find any physical silver around, then it has to go down. How off am I?
First is BUY PUTS. if nothing else bet against yourself, buy puts on miners why not? The leverage is huge, not hard to find 50-100X bets, if the worst happens you don't need to bet the farm on it. Heck just .25% at 100X can hedge 25% of your holdings. Sounds impossible, well sure worked well for Akman last year didn't it.
I've been buying puts not so much relating to gold but the overall US market.
But what if I'm wrong and the Fed starts printing a ton of money lol what is a ton nowadays anyways. And starts to aggressively buy bonds and drive down yields? Buy out of the money calls on longer US government bonds would do it.
I'm torn here, Am I seeing something emerging or am I seeing what I want to see? Constant struggle.
I can see this bond raid as a setup to help the narrative that the world is just going to get back at it, and soon. I just can't see it.
People are buying stock in bankrupt companies yet no one is actually buying these businesses. How many people do you think are currently lining up to buy a Subway franchise right now? Name em, people aren't buying them.
alright enough ranting, hope this helps, bed time and happy thoughts.