Attention the TNX is running the show.... A close above 2.40% ....is fine...no big deal but the global macro
money managers will be watching to see how quickly or how slowly.... we get to 2.62, the Dec 15th high of
2016. If we meander around for 3 months below that level ....... put the accelerator on US equity prices and
global equity prices as we could rip ... really rip higher... like the good old days of 1998, 1999,
these are the best of times. A valid case can be made that the FED does not need to contract their balance
sheet at all. 4.6 Trillion.... give or take a few billion as to where it's at .... what is the problem with the FED
having a 4.6 Trillion dollar balance sheet. At the end of WWII , President Harry S Truman, was deeply concerned about how huge the US budget and the US budget deficit was compared to 1940, prior to the
USA involvement in WWII. But it did not represent a problem for the US Government, the FED or anyone
else. It was just a reset.
The balance sheets of the Major central banks can stay where they are ... why reduce them? the
Normalization of Interest rates and reduction of Central Bank balance sheets are 2 completely different
topics of discussion. We have had an expansion of Infrastructure spending, and other benefits of the
enhanced ability of the Government to provide services efficiently. That is as much technology upgrades and
new technology, which is more powerful and cheaper at the same time.
The Era of Exponentiality..... So many people are suspicious of Bitcoin and the crytptocurrencies that Bitcoin could be at $20,000 or the $35,000 target ... that was presented here 4 weeks ago by a WS strategist.
Ethereum, I do believe is going to out perform Bitcoin on a % basis.
Darell Cronk of WFC is saying we are not at the Euphoria stage yet... but he feels we are closer than another
18 months of pure run and gun...... and GO, GO ,GO equity inflation.
stay tuned....... tax reform .. which should come will push US and global equity earnings higher...... People are not totally in the market ... and so their is plenty of dry powder yet to get deployed in the stock
market.
John |
