Replies to post #1287 on Awesome Stocks

[gfp927z]

Bigworld, Well, so much for a 'Santa Claus' rally. Your idea of going short might not be so bad after all, although I certainly wouldn't use leverage/3X. It's starting to look like 2023 could be a good year to just sit on the sidelines in cash/T-Bills, at least the first half of 2023.

For now it looks like the market is in limbo, a 'damned if you do, damned if you don't' situation. Good economic news that is normally good for stocks is bad in this environment, since it makes the Fed more hawkish. And while bad economic news is good for the Fed/inflation, it is bad for corporate earnings, retail sales, etc. So it seems like a no win situation for stocks. The only really bullish factor is when the inflation numbers actually drop.

For investors, it's starting to sink in that this could be a long bear market, with flashbacks to the 1970s. But as Nouriel Roubini points out, the debt/GDP was only 30-35% back then, and today it is a monstrous 120%, yikes. The question isn't whether there will be a financial wipeout, but the timeline.

Do we muddle through for a period of years or longer, or does a crisis come much sooner? Is the finance oligarchy ready to transition from the crisis to their Great Reset, or will they try to hold the dollar system together for as long as possible, perhaps for many more years of circling the drain? The China/Russia plans for their gold backed alternative to the US dollar might be the key factor determining the timeline. Do the US finance ghouls push the world deliberately into a preemptive crisis to force everyone into an IMF bailout (SDRs), figuring that at least then the Western oligarchy will retain significant control? Lots of questions.



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[gfp927z]

Bigworld, The gold/silver comeback continues, and it will be interesting to see how high they get in the period ahead. Momentum is building, and it feels like gold could work its way back to 2000/oz, and silver could test the Mar/Apr highs in the 25-26 area.

Looking at the charts, the recent bounce in metals since Oct corresponds closely with the reversal of the US dollar over that same period. The lower dollar should help relieve the severe exchange rate imbalances that other countries have been enduring, so that part is good. But the big dollar drop, and the way longer term Treasury yields have plummeted recently, indicate that the market is expecting a sizable recession. The geopolitical risks are another big worry that unfortunately won't be going away anytime soon.

Fwiw, I recently brought my stock allocation back down to 12% from the previous 22%, and will probably just keep the powder dry for a while. Some of the money markets are paying from 3.5-4.0 range right now, so I figure not a bad place to wait for more clarity later in the year. Too many landmines out there right now imo, and a nasty recession that is just beginning.

Rickards says that Powell is determined not to repeat the 'Volker mistake', where Volker prematurely reversed course on his tightening (dropping rates by 7%), and then inflation roared back and he had to flip back to mega tightening, all the way up to 20%. So Powell will likely hold rates at the upper plateau level for a long time. Rickards says too long, and he expects a severe recession. And a lot in the financial world can start breaking and then snowball.

The Ukraine war is also a ticking time bomb, with a major Russian offensive about to start. Kissinger seems to be the only one seriously worried about us bumbling into WW 3. Ending that damn war would also help fix the many global supply chain disruptions (oil/gas, food, fertilizer, strategic metals) and thus bring down inflation. Instead, between Zelensky and the morons running US foreign policy, we'll end up with WW 3 and a global collapse.



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