UNDERSTAND MACRO-FINANCE!WHILE ALL PRICES HAVE RISEN SINCE 1913 (THE CREATION OF THE FEDERAL RESERVE), SOME HAVE DONE SO MORE THAN OTHERS!
THE FINANCIAL SYSTEM HAS BECOME SO LARGE AND COMPLEX THAT IT IS IMPOSSIBLE TO TRACE THE ACTUAL SIZE OF THE ENTIRE MONEY SUPPLY ( M3 )!
WHEN IT COMES TO ESTIMATION, YOUR GUESS IS AS GOOD AS ANY EXPERT'S!
THE ONLY WAY TO DETERMINE IF M3 IS RISING OR FALLING IS BY LOOKING AT THE PRICE OF OIL , THE PRICE OF THE 1-MONTH TREASURY BILL AND THE YIELD CURVE, ALL OF WHICH INDICATE THERE WAS A DEFLATIONARY PERIOD AT THE BEGINNING OF 2020!
STOCKS, WHICH ARE THE MOST FINANCIALIZED ASSET CLASS, HAVE SEEN THE GREATEST INCREASE IN PRICE, BECAUSE MUCH OF THE CREDIT THAT THE FINANCIAL SYSTEM CREATES BIDS UP THEIR PRICE BEFORE ANYTHING ELSE!
COPPER AND OIL , THE PRICES OF WHICH ARE MUCH MORE IMPACTED BY SUPPLY AND DEMAND CONDITIONS WITHIN THE REAL ECONOMY, HAVE BARELY MOVED IN COMPARISON AND REFLECT THE LACK OF REAL ECONOMIC GROWTH FOR THE PAST HALF CENTURY!
GOLD , FOR ANYONE WHO CONSIDERS ITS PRICE EVEN REMOTELY ELEVATED, HAS BARELY EVEN KEPT UP WITH THE INCREASE IN M2 (WHICH INCLUDES PHYSICAL CURRENCY, CHEQUING ACCOUNTS AND SOME SAVINGS ACCOUNTS).
THROUGHOUT HISTORY, THE MARKET CAPITALIZATION OF GOLD HAS ALWAYS EVENTUALLY MATCHED THE TOTAL MONEY SUPPLY, AND THEREFORE THE PRICE OF GOLD MUST INCREASE BY SEVERAL TIMES EVEN FROM HERE TO BE VALUED CORRECTLY!
Socialism
INFLATION VS DEFLATION!THE PRICE OF OIL IS THE MOST DIFFICULT PRICE TO MANIPULATE FOR CENTRAL BANKS!
HOWEVER, THROUGH VAST AMOUNTS OF FIAT CURRENCY CREATION, THE PRICE OF OIL INCREASINGLY REFLECTS THE DEBASEMENT OF THE U.S. DOLLAR, NOT REAL DEMAND!
TO OBSERVE THE DIVERGENCE BETWEEN THE INFLATED U$D PRICE OF OIL AND REAL DEMAND FOR OIL, COMPARE THE PRICE OF OIL TO THE PRICE OF GOLD!
"Free stuff" part 2: Just print money!Reminder of my idea about taxing the rich as a solution:
And so (high) inflation....
Here is an economist article on it, they have a chart with the budget balance.
www.economist.com
I'll make some bullet points here too about inflation:
- The government robs wealth from the whole population to fund programs. Printed money isn't real money, you can't just print money out of thin air, they dilute the money supply making every one poorer except those that get the money first (banks and big stock holders in the USA, France and the UK in Germany)
- It snowballs and ends up making the whole country poorer
- Politicians and even emperors have been doing it so many times over the last thousands of years. IT. HAS. NEVER. WORKED.
- The people hurt first are savers, people with fixed income (anyone that works), taxpayers (every one) since you will move to a high tax bracket while not really making more
- People that don't work and get free stuff are happy at first (remember, koko the gorilla...), and then once the government can't support them no more they starve to death (well done), a "condescending tone" is the least of their concerns
- The wealthy, the entrepreneurs are not going to bother building anything, they'd rather speculate, look for valuable assets that won't depreciate (as much). Can be real estate (hey even the Venezuela government did that, in particular with exiles homes), foreign stocks, gold (hey even the Venezuela government did that), cryptocurrencies like bitcoin in zimbabwe (hey even the Venezuela government did that)
- If no one makes stuff then there is no stuff. You cannot legislate it into existence. This is painfully obvious what isn't is the process in which it destroys a country, what I attempted to list here. Crazy money printing to offer "free stuff" always ends badly. Every single time.
Here is a nice little essay on Bernie Sanders senator page, it's from 2011:
www.sanders.senate.gov
Ahem, ahem, *clears throat*, I quote:
"These days, the American dream is more apt to be realized in South America, in places such as Ecuador, Venezuela and Argentina, where incomes are actually more equal today than they are in the land of Horatio Alger. Who's the banana republic now?"
As you know, Bernie is pro "free stuff", and never had a real job. Therefore it is no surprise that he still has not delete that page, gee, that's alot of hard work! 😉
Bernie Sanders, praising Venezuela & Argentina in 2011. Nice. And then during his campaign for 2020 he was saying "I'm not thinking of Venezuela and Argentina those are bad places". Maybe Bernie has lost his memory like sleepy Joe? He praised the Soviet Union, then he pretended he never did, then he praised Venezuela and Argentina, then he pretended he never did, then he praised Europe ... Eu... OH MY GOD WE ARE NEXT WE ARE DONE FOR!
Oh this Bernie. I will make an idea with his finest quotes, I promise.
Here is a fine picture of Chavez holding hands with Michael Moore the american feminist andit white man pro free stuff filmmaker. Maduro is walking next to them.
Moore can't pretend he wasn't there😉
adribosch.wordpress.com
Short sell any country that promises free stuff.
Part 3 could be debt spending (stealing money from future generations) and part 4 government spending in general, regroups all 3 parts.
PETER SCHIFF VS JEFF SNIDER!THIS POST WILL HELP YOU UNDERSTAND THE COMPETING VIEW POINTS ON THE FUTURE PERFORMANCE OF THE U.S. DOLLAR RELATIVE TO OTHER CURRENCIES!
JEFF SNIDER'S POSITION ON THE DOLLAR:
THE U.S. DOLLAR IS STRONG BECAUSE OF A SHORTAGE OF DOLLARS WORLDWIDE TO CONDUCT GLOBAL TRADE IN, DUE TO THE FED'S INABILITY TO TRULY SATISFY DEMAND FOR U$Ds, AND WILL CONTINUE TO STRENGTHEN AS LONG AS FOREIGN CURRENCIES ARE SOLD TO BUY U$Ds.
PETER SCHIFF'S POSITION ON THE DOLLAR:
THE U.S. DOLLAR IS STRONG BECAUSE OF AN IRRATIONAL FAITH IN THE U.S. ECONOMY BY FOREIGNERS AND THE WILLINGNESS OF PRODUCTIVE ECONOMIES WORLDWIDE TO USE AND ACCEPT PRINTED U.S. DOLLARS IN GLOBAL TRADE, SUBSIDIZING THE CONSUMPTION AND TRADE DEFICIT OF THE U.S.
JEFF SNIDER'S POSITION ON U.S. TREASURIES:
THE U.S. GOVERNMENT BOND MARKET HAS BEEN BID HIGHER FOR DECADES AS U.S. TREASURIES PROVIDE THE SAFEST SOURCE OF U$Ds AND ARE THE MOST ACCEPTED FORM OF COLLATERAL FOR U$D LEVERAGE. IF U$D LIQUIDITY BECOMES CONSTRAINED ENOUGH WORLDWIDE, A SELL-OFF IN THE GLOBAL U.S. TREASURY MARKET CAN OCCUR AS THEY ARE SOLD FOR THE IMMEDIATELY NEEDED U$Ds, RAISING INTEREST RATES THROUGHOUT THE FINANCIAL SYSTEM AND THE ECONOMY.
PETER SCHFF'S POSITION ON U.S. TREASURIES:
THE FEDERAL RESERVE'S ARTIFICIAL SUPPRESSION OF INTEREST RATES SINCE THE 1990's THROUGH QE , COUPLED WITH THE USE OF U$Ds IN GLOBAL TRADE AND THE IRRATIONAL FAITH BY FOREIGNERS THAT THE FEDERAL RESERVE COULD SHRINK ITS BALANCE SHEET AND NORMALIZE INTEREST RATES HAS LED TO FOREIGN CAPITAL BIDDING UP THE PRICE OF U.S. GOVERNMENT BONDS. ONCE THAT FAITH IN THE DOLLAR'S SCARCITY IS DIMINISHED AND PRODUCTIVE ECONOMIES WORLDWIDE REFUSE TO HOLD/ACCEPT U$Ds AND SUBSIDIZE AMERICAN CONSUMPTION, U.S. TREASURIES WILL BE SOLD-OFF, RAISING INTEREST RATES THROUGHOUT THE FINANCIAL SYSTEM AND THE ECONOMY.
JEFF SNIDER'S VIEW ON THE FUTURE OF THE DOLLAR:
AS LONG AS THE FEDERAL RESERVE FAILS TO ADDRESS THE COMPLEX NEED FOR U$Ds AND AS LONG AS THE U$D REMAINS THE WORLD RESERVE CURRENCY, DEMAND WILL OUTPACE SUPPLY, AND THE U$D WILL CONTINUE TO STRENGTHEN AGAINST OTHER CURRENCIES UNTIL A CULMINATION OF DEFAULTS AND RESTRUCTURING RAVAGES THE COUNTRIES WITH THE MOST SEVERE LACK OF U$Ds, SENDING THE U$D SKY HIGH, LEADING TO AN ABANDONMENT OF THE U$D AS WORLD RESERVE CURRENCY.
PETER SCHIFF'S VIEW ON THE FUTURE OF THE DOLLAR:
ONCE PRODUCTIVE COUNTRIES WORLDWIDE BECOME DISILLUSIONED WITH THE AMOUNT OF EASILY CREATED U$Ds CHASING PRICES, THE APPETITE TO ACCEPT THOSE U$Ds IN EXCHANGE FOR GOODS/SERVICES AT CURRENT PRICES WILL DIMINISH, ALONG WITH THE DESIRE TO HOLD U$Ds, U.S. ASSETS AND U.S. TREASURIES. ONCE U$Ds AND U$Ds OBTAINED THROUGH THE SALE OF U.S. ASSETS AND U.S. TREASURIES ARE SOLD FOR OTHER CURRENCIES, THE U$D WILL WEAKEN SIGNIFICANTLY, FURTHER INCREASING THE PRICES OF IMPORTED GOODS/SERVICES, SENDING THE U$D INTO AN INFLATIONARY SPIRAL, MARKING ITS END AS THE WORLD RESERVE CURRENCY. IN THIS CASE, IF THE FEDERAL RESERVE MONETIZED THE SOLD U.S. TREASURIES TO PREVENT INTEREST RATES FROM RISING, THIS COULD EASILY LEAD TO HYPERINFLATION.
-THE NOTES ON THE CHART REFLECT KEY EVENTS THAT MARKED THE PEAK IN THE U$D's EXCHANGE RATE VS OTHER CURRENCIES
An extremely easy but super efficient investing ruleIt's actually disgusting that it would be so easy...
Countries approaching socialism: Sell & Let them starve.
Countries abandonning socialism: Buy & Hold.
It's barely more complicated than this.
Most African countries have been living in absolute misery probably because after the soviet union stopped sending them free stuff, the european union and americans have been taking pity on them and throwing free stuff at them. To feel good about themselves. All this has accomplished is enabling awful (even much worse than the soviet union's) anti business anti ownership regulations, the people need to be pushed to the limit and have nothing to lose and nothing to hope for to make a change, all these "helpful" organisations sending food clothes medicines, all these altruist doctors, they are responsible for misery in Africa.
If they think they are going to heaven for their "good actions" boy do I have bad news for them (:
With the US stock market in a bubble and nearing explosion I'd say it's not the time to invest right now.
The whole world will feel the shockwave.
Some GDP growths:
I've been looking a bit at Rwanda but just to get a better idea, to be able to more easilly recognize when this happens ELSEWHERE, I will not invest in a country of murderers.
While the herd is getting all excited by big US names and new techs (dot coms, crypto...) AFTER the gains have been made, anyone will a brain bigger than a walnut should look for everything that is undervalued, it should be a habit. I am a speculator not an investor but I figured this is how you do it. I am not saying there is no speculating, actually investing in some 3rd world unstable countries you better be prepared to lose then totality of your investment, but it can also go way up.
Imagine this: some complete ruin of a country, worth zero, simply mentionning its name and investment in the same sentence makes your average person laugh.
The harder they laugh the bigger the potential. "The people" are ALWAYS wrong just do the exact opposite.
Also, if the population of the USA gets butthurt and jealous enough they WILL vote socialist I can guarentee 100% it will happen if they get salty enough.
Just like Donald Trump could win the election in 2016.
And when that happens, all the world economies relying on free innovations coming from "evil capitalist" US will crash. Forget GDP growth. Plus there's the climate religious freaks that want to conquer the world.
Also europe free ride on the back of the US military will probably be over. They're going to have to spend their own money.
Having ideals is cute when you have a large nation doing all the work for you, or when you have huge Oil exports and literal unironic millions of slaves.
But when reality knocks at the door, it wields a baseball bat.
Always remember: During the white revolution Iran experienced double digit growth.