Where we are... what to expect... what's different this time...
We're "just" coming off the top of a massive stock market bubble... perhaps the biggest in history relative to the basis.
Oil is rocketing higher... with obvious good reason...
It's not yet clear how the market events will unfold...
But, I've pointed out recently... the "usual cycle and its sequential ending" unfolds as... stocks move higher... then oil rockets higher... then volatility spikes... then stocks fall... then KOLD soars... as the economy flattens, and the market bottoms, and another cycle begins gathering...
That might unfold in "a market crash"... as in 2020, begun and done in a month... or, it might unfold in an initial accelerated decline... expanding into a years long persistent decline... as in 2008... or, "both"... as from 1929 and into the 1930's... The timing and pace of the entry... matters... and the pace of the evolution in expression matters... as "how you trade it"... will determine success or failure... differently in different and varying circumstances...
That you know the usual sequence in events... doesn't mean you know where the limits are in one phase, or the timing of the events in sequencing one into another... and, there is variation between cycles in the extremes and in timing.
So, always tea leaves that need to be read and interpreted... never an ability to rest easy expecting you know whats coming and are properly prepared...
What's different this time... also matters tremendously... as price declines (in stocks, oil or other things) are often or "usually" imposed by demand destruction... poised against an expectation of a more or less stable supply.
This time, the extreme nature of the events, and actions being undertaken now have a disproportionately large potential not only to initiate the cycle of demand destruction fostering a deep recession... but to match it, or more than match it, with destruction of supply... so, prices may not decline with an economic contraction, as they normally might... We've seen that occurring already, with Covid driven disruptions of supply chains... not in oil... but, in silver, in February of 2021...
This time, the extreme nature of the events, and actions being undertaken now have a disproportionately large potential not only to initiate the cycle of demand destruction enabling a deep recession... tanking the economy as oil prices move higher and remain high... But, this time, as all commodities are being forced higher as a function of the breaking of global supply chains... you should expect to see a pairing of a declining economy with soaring inflation... I have called it "hyper-stagflation"... and, it looks like we're on track to see that, soon... as price impacts of higher oil ripple through the economy are are sustained, and begin to accelerate...
This time, the extreme nature of the events, and actions being undertaken now have a disproportionately large potential not only to initiate the cycle of demand destruction driving us into a deep recession... but to initiate World War III... which you can see them succeeding at in inching us toward that, day by day... but, also, tipping the world into an even more massive global depression... as what was already going to be a massive impact from a huge market bubble popping... will be made vastly worse by the pairing of the unraveling of the global order in trade... with an actual hot war between former trading partners...
And, as nothing exceeds like excess... we are already embroiled in a full fledged financial system war that is conducted at an unprecedented scope and scale... which many of the most avid war mongers today prefer to think of as "not war"... while virtue signalling about their participation in that war... expecting it is somehow likely to "punish" and prevent war... rather than force the cause in its expansion into open hostilities.
Along with that excess... the financial warriors have now fully committed to destroying the ability of global counter-parties and trading partners to rely on the dollar as "being there" as a safe holding of accumulated reserves...
There are multiple and complex consequences likely to proceed from that "unforced error" in not only what was done, but in how it was done...
I think it may, ultimately, result in the death of the dollar... but not only the dollar... but all current (and future) forms of fiat... given dollar based counter-party risk is now made very real... and still none other offers any comparable advantages or any less of that risk. And, I don't for a second believe it was "an accident" or anything other than intentional... that that risk is now made real... and that the potential consequences of that risk being made real are now being made real.
Two hugely important "new" risks result... One, in the additional massive negative impact on the global and U.S. economy from the end of dollar hegemony... if and when that occurs... which is now made not inevitable, but vastly more likely... And, two, in the parallel in the immediately altered nature of the relationship of gold and silver (and oil prices) to fiat... because of that dollar counter-party risk being greatly amplified... making it untrustworthy as a store of value.
In result... expect a deep recession... growing into a depression... that then potentially doubles in impact as a function of currency issues... but likely growing into the worst global depression in modern history...
Global food shortages are almost "baked in" already... but, food inflation an inevitability...
But, with all that... "the flow of events" also altering expectations re prior relationships apparent in timing, sequences, and changes in values over time...
Gold and silver and mining shares... often decline with markets in routine pullbacks... as a function of simple reductions in economic potential... where there is not an overt amplification of systemic risks driving demand from risk in fiat into safe have trades in real things...
That is not what we face, this time... as both very large systemic risks... and an unprecedented level of risk in the potential failure of global monetary systems, including the dollar, is in play... so, the flow out of global fiat with drive gold and silver higher... even with a greatly increasing risk over time of confiscation...
At the same time... the rapidly expanding risks of war... again with existential scale risks in play... is, already, suddenly, altering the dynamics in the economy... as defense spending rises... it will drive certain demand for particular commodities... sustaining their prices... driving inflation... at a time when those things are becoming far harder to obtain...
|
