Boil, GTE and OGZPY... chugging along...
HMLP crossed the 50MA today... without incident... and the KST is set to go positive tomorrow... so the chart says its not the worst possible trade, now... more given the rising tide doing what rising tides do...
How sustainable is it ? The Fed's goal... is to keep the frogs from jumping out of the inflation pot as the temperature gets turned up... as the relative size and value of the debt is shrinking at the same pace that your groceries are getting more expensive. And, as prices rise... taxes go up in proportion while shoppers and investors both lose that value that is inflated away... and then its taxed, and they lose again as it is taxed more at higher prices...
Oil and gas... seem the only sector play available to beat the inflation that's occurring now...
Jeff Currie... who famously committed himself to Goldman Sach's silver manipulation scheme on live TV back in February/March... was out of hiding, today... championing the idea that "the commodities" are in a bull market that's sure to last for ten years... but, he failed to mention gold and silver ?
We're very near inflection points... so, perhaps, time again to check the portfolio for geopolitical risks...
Mexico now joining the crowd of those looking untrustworthy... while the greedy politicians in the U.s. impose their threat in the form of inflation and effort applied in growing taxes...
Inflation is high enough... and banking risks emerging... to make cash in an account a growing risk...
Congress talking today, hypocritically as always, about horrible Feb policy having inflated asset prices...
But the Fed is now positioning Congress to be the bad guys... if spending ramps fuel inflation even more... or if tax increases... over and above that inflation imposes by itself... finally pop the wheels off that thing...
SYSX dropped like a rock the last few... news recently.... on an NFT project... had it trading down below $0.60 today... history suggested that wouldn't last... and, sure enough, it was back to $0.90 by mid afternoon... $.0.85 into the close...
Yesterday... the Fed et al gave "transitory" another try... and pretty much no one still buying it at this point... So, today tried to get back out ahead of the parade... flat out admitting the structural argument is the correct one... if only by noting that their "transitory" expectations have failed to transit...
The boom in oil and gas... has rising prices matched, as always, with rising interest rates... the ten year was back up over 1.53% today... but closed at 1.49%... leaving plenty of head space to sustain the current trends for a while yet... The supposed danger zone at 1.65% to 1.75% back in April... supposed to predict the crash in October... perhaps was not properly inflation adjusted ? What is the real inflation rate ? Even using the Fed's numbers... rates are solidly negative...
The Fed INTENDS to preserve the inflation far above headline... for as long as possible... as that's safest path to deleveraging... and the one that they're stuck with... How long can they sustain it without... unwanted side effects ? At what point does the narrative failing... send gold and silver soaring ?
Oil and gas are showing what happens when the "transitory" narrative fails... in a commodity that is quite a bit more blue collar than are the gold and silver inflation hedge ideas... The ongoing suppression of the gold and silver price... and of gold and silver stocks far more than the metals... appears it is reaching limits...
Those predicting gold and silver will fall of the cliff, from here, to re-plumb the lows of the 2020 crash... aren't paying attention, as they're essentially already there. on an inflation adjusted basis.... ? But, their "theory" justifying that position... is that "We're not going to get inflation... we're going to get deflation". LOL! The obviously improper use of the future tense... one issue...
Doesn't mean gold and silver "can't" go back to the longer term lows... while everything else doubles in price.... but the 1100 to 1400 gold of 2014 to 2019... or silver at the $12.50 to $15.00 base its mostly held since 2007... clearly "shouldn't" happen... given that will require inadequate supply to meet industrial demand... and shut down future production for some years... by pricing the metals below the cost of production...
I think the manipulation... which is ignored by most pundits who still have a presence on Youtube, etc., is a bit too far over its skiis at this point... with the banks clearly failing to consider that they might be CREATING more and larger risks for banks by the effort made in mispricing the metals... than they are avoiding by making the effort...
The rest is their error in assumption that inflation is all and only a function of monetary impacts... and they know QE isn't inflationary but deflationary... and can't conceive that the Fed might lose that battle if they did engage it ? But, the monetary tools have ZERO impact on the structural drivers of inflation. So, sure, the Fed CAN use the manipulation of $ to force us into a market crash and a deflationary depression... but, that won't stop the inflation... rather than make it worse... because the impact that choice has in obstructing the correction of the structural issues... requires that be true ? If they sustain the inflation... they survive. if they induce the deflationary depression... the banks and the Fed are going to evaporate.
Still struggling, they are, with the idea that inflation and deflation are NOT opposites... you can have both at the same time... as prices can rise at the same time that economic activity contracts...
Inflation is best avoided. Deflation is best avoided. But, both at the same time ? That's bad... for everyone.
Stagflation... doesn't quite capture the element of how bad it might become... if the issue is not stagnation with rising prices... but contraction with rising prices... which appears it is what policy is going to deliver... given they've been "deflating" with QE as policy for a long time already... while contracting money flows...
The market still expects ending QE will cause contraction... when, in reality, what it will do instead is goose inflation in fact... while inducing contraction through the imposition of error in expectations... so, what you are likely to get is the inflation we have already with structural drivers, paired with more inflation delivered by ending QE... paired with more inflation... created by countering the "contraction" that ending QE is assumed to cause... with a stimulative fiscal policy...
At this pace... gold and silver should have no value at all by mid year 2022 ? /x
The same people have also been predicting bonds moving higher... rather than rates moving higher ? And, the differences in reality is... the inflation they want to pretend should still exempt silver and gold from any impact ? Not a sustainable story... with yields still deeply negative... no reason anyone would want to own them... unless someone gave them free money to subsidize bond purchases ?
Meanwhile... looks like cans that aren't glued to the ground, or filled with heavy metals, continue being kicked down the road... the October crash already being called the November crash, etc...
Saw talking heads today saying... there is no reason that Evergrande "should" go systemic... But, others pointing out that the companies in China that suspended paying on debt today... probably also have RE holdings outside of China... and it seems reasonable that you might expect China will direct them to sell all of that foreign real estate before selling any inside China... ? But, the news buried in there... is that companies OTHER than Evergrande also failed to make payments, today...
But, of course, as that happens... the Fed will say "See, "transitory"... as real estate values crumble... ?
However, cheaper RE won't fill your gas tank with cheaper gas ?
|
