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Strategies & Market Trends : US Inflation and What To Do About It -- Ignore unavailable to you. Want to Upgrade?

To: Rarebird who wrote (1073)	8/12/2019 8:52:14 AM
From: RetiredNow	Respond to of 1504

Check this out. Interesting take on the long term in Africa. Gold, gold, gold. ----- The Biggest Migration Since The Barbarian Invasions Of Rome (Is Not Where You Think) Via InternationalMan.com, International Man: Former Libyan leader Muammar Ghaddafi once warned that“Europe runs the risk of turning black from illegal immigration… it could turn into Africa.” Since the United States and NATO helped overthrow Ghaddafi in 2011, millions of migrants from Africa and the Middle East have poured into Europe. Many transited from Libya. This is all well known, and all signs point to this trend accelerating. What’s your take on where this is going? Doug Casey: First, it’s a pity Ghaddafi was taken out. Another disastrous US policy decision. Not that he was a nice guy—no one running an artificially constructed nation-state can be. But it was at least a stable situation. Now it’s been replaced by a bloody and costly war. And it’s complete chaos. Nice work Hillary and Obama. But let’s talk about Africa at large. Africa, or at least migration in and out of Africa, is going to be the epicenter of what’s happening in the world for the rest of this century. Africa has gone from being just an empty space on the map in the 19thcentury, to a bunch of backwater colonies in the 20th century, to a bunch of chaotic failed states that most people are only vaguely aware of today. Soon, however, it will be continuing front-page news. This is because Chinese are moving to Africa in record numbers while Africans are leaving as fast as they can. What we’re looking at is actually the biggest migration since the barbarian invasions of the Roman Empire. There will be tens of millions—scores of millions—of Africans trying to get into Europe. I don’t know how the Europeans will keep them out. I used to say Europe was going to be a petting zoo for the Chinese, but it may be more of a squatter’s camp for the Africans. Africa is the only part of the world where the population is still growing and growing rapidly. Africa south of the Sahara was about 6% of the world’s population in the ’50s, now it’s about 16%. But by the turn of the century, it’s going to be 45%. Assuming there isn’t some kind of catastrophe. It’s not clear that the Africans can grow enough food for billions more people. In fact, if the West stops supporting the continent with capital and technology, it could be in for very tough times. Wakanda, the country in “Black Panther”, doesn’t exist. On the contrary, the continent is full of Gondwana lookalikes. Gondwana is where most of the action takes place in Speculator, the novel John Hunt and I wrote. It’s the first of seven in the High Ground series. Few people realize how fast the population is growing, and things are changing in Africa. I ask knowledgeable people what they think the biggest cities in the world will be at the turn of the next century. They all guess cities in China or India. But that’s not true. Eighty years from now, Lagos, Nigeria, will be the largest city in the world. It’s on track to have a population of more than 90 million. The world’s second biggest city will be Kinshasa in the Congo with about 80 million people. Dar es Salaam, Tanzania, will be the world’s third biggest city with a population of roughly 75 million people. It’s quite amazing. When I first visited Dar in the early ’80s, it was a quiet, exotic seaport with old tramp steamers in the harbor. Now all those people have cell phones, and they’re well aware of the fact that the standard of living is vastly higher in Europe and every other part of the world than in Africa. And they’re well aware of the fact that there are welfare benefits of all types if they can get to Europe. There are hundreds of NGOs encouraging Africans to come across the Mediterranean to Europe. Or for that matter, flying them to the US. Exactly who paid the airfare and legal and living expenses of the 200,000 penniless Somalis who were transplanted to Minnesota? It’s a growing tidal wave. With the European population diminishing and the African population growing, you’re going to see Europe basically taken over by Africa in the next several generations. International Man: What we don’t hear as much about is the massive migration of the Chinese to Africa that’s taking place. Doug, you’ve spent a lot of time in Africa. What’s going on with all this? Doug Casey: We’re seeing a veritable recolonization of Africa. Each time I visit Africa, there are more Chinese. It doesn’t matter which country; they’re everywhere. Rich Chinese are smart to diversify to developed Western countries. Poor Chinese go to backward countries to try to become wealthy. Africa is the prime recipient. It’s supposed to be official Chinese policy to migrate about 300 million Chinese to Africa in the years to come. They’re employed in building roads, railroads, ports, mines, and other infrastructure. It’s partially driven by their Belt and Road Initiative. The Chinese are lending billions to African governments. African governments are, by an order of magnitude, the most corrupt in the world. And the people who run these African governments are being well compensated for making deals with the Chinese. And in effect, selling out their countrymen. All these governments are full of people trying to be “Mister 10%.” The worst case for them is to retire as centimillionaires, to live high off the hog in France or Switzerland. So, they’ve got nothing to lose. It’s a fairly unstoppable trend at this point. Regardless of how much is stolen, however, I expect the Chinese are going to want the money they loaned to the Africans back, with interest. If bribing or intimidating political leaders proves ineffective in getting it back, it’s possible that they’ll put soldiers’ boots on the ground. They could send in the People’s Liberation Army (PLA) to defend their assets. Or send in assassins to take out recalcitrant African politicians. I wouldn’t be surprised to find the PLA in Africa in the years to come, physically collecting on those debts. And to make it easier for them, they’re going to be greeted by lots of Chinese already there. It will be interesting to see what happens when a couple hundred million Chinese are living with a radically expanding native African population. If the Africans were unhappy with European colonization, I think they’re going to be very, very unhappy with the Chinese colonization. The Chinese will not be “inclusive” and PC like today’s Westerners. It has the makings of a race war a generation or so in the future. International Man: What about Africa piques the interests of the Chinese? Doug Casey: It’s important to remember that Africa doesn’t produce anything besides raw materials—and people. There’s close to zero manufacturing—like 1% of the world’s total—in sub-Saharan Africa. And almost all of that is in South Africa. The Chinese see Africans as no more than a cheap and dispensable labor source. That’s at best. Other than that, they’re viewed as a complete nuisance. Basically an obstacle—a cost—standing in the way of efficient use of the resources of the continent itself. What do the Chinese people think of Africans? They don’t hold them in high regard. Of course, you’ve got to remember that China has viewed itself as the center of the world since Day One. They see all non-Han people as barbarians, as inferiors. That was absolutely true when the British sent an ambassador, Macartney, to open relations at the very end of the 18th century. He was treated with borderline contempt—pretty much the way Europeans and Americans have treated primitive peoples since the days of Columbus. It’s actually the normal human attitude when an advanced culture encounters a backward culture. The Chinese see their culture as superior to even that of the West and believe—probably correctly—that they’ll soon be economically and technologically superior as well. International Man: If China comes to dominate Africa and its resources, what does that mean for its rivalry with the US? Doug Casey: Well, the US government is basically bankrupt at this point. The only thing that the US exports in quantity is US dollars. And sometime soon, the Chinese, the Russians, the Malaysians, the Iranians, and the Indians, among others, won’t need or want US dollars. They don’t want to accept them now, because it’s an asset of their adversary or even their enemy. They’re unhappy about having to settle accounts in dollars that all have to clear through New York. So, they’re going to come up with their own alternative. And I suspect they’re going to use gold. Why? Because they don’t trust each other’s paper currencies. And why should they? How’s the United States going to react to that? It’s going to be left out in the cold. No one needs or wants their dollars—they want and need real goods, not the paper obligations of a hostile, unpredictable, bankrupt government. Also, the US isn’t in a position to export people, except for some unwelcome soldiers. The Chinese are in an excellent position to export a couple hundred million spare people. The bottom line is that the Chinese are going to take over Africa financially, and they’re going to take it over demographically as well. International Man: What kind of speculative opportunities do you think this trend will create? Doug Casey: Well, I’ve often said that if I were 30 years old today and wanted to make my fortune, I would definitely go to Africa. The reason for that is that you don’t want to be on a level playing field. You want to be on a field tilted in your direction as much as possible. If a young Westerner goes to Africa and travels around, he’ll find it quite easy to move with the top levels of society. Because he’s unusual. And people are interested in things that are unusual. The fact that you’re a Westerner means that you’ve probably associated with people who have much more money, much more sophistication, much more knowledge than any of the locals do. You have unique advantages in Africa. If a young Westerner stays at home, however, he has no marginal advantages. It’s very hard to vault yourself to the top in a Western society, because there are tens of millions of people just like you with the same education, background, and abilities. But in Africa, you’re automatically on the top of the heap. And you’re noticeable. So, it’s a great place to go for entrepreneurial reasons. At the same time, I don’t think Africa is a place to invest unless you’ve got the PLA standing behind you. It’s a place for a hit-and-run type of entrepreneurialism. Or perhaps political entrepreneurialism. As corrupt as Africa is, the way almost everybody makes money is by getting hooked up with the government. And that’s possible to do. You could go to any number of African countries, hang out there for a month, and be sitting down with the president. That’s not going to happen if you try to do the same thing in North America or Europe or for that matter even South America or Asia. International Man: If you were 30 years old and looking for opportunity in Africa, what countries in particular would you be most interested in? Doug Casey: Well, I wouldn’t jump off the deep end at first. Don’t go to a place like Nigeria to start. Nor is South Africa ideal for this purpose. It’s too developed, and there are too many people of European descent—although that’s changing. White people are making what the Rhodesians called “the chicken run” and for the same reasons. There’s too much anti-white racism in South Africa, and besides, the economy is going into reverse. I would go to a country like Namibia, which is large, empty, and pretty mellow. I would definitely look at Mozambique. Or Mauritania—a huge country, where nobody goes. São Tomé and Príncipe, an obscure island country off the west coast. If you’re adventurous, the Central African Republic, which is probably the most backward country in Africa. * * * International Man is all about helping you make the most of your personal freedom and financial opportunities around the world. We just released a new report, called “Getting Out of Dodge,” written by contrarian investing legend Doug Casey. Inside is his action-packed survival guide. Click here to download the PDF now.

To: Rarebird who wrote (1073)	8/12/2019 12:19:20 PM
From: RetiredNow	Read Replies (1) \| Respond to of 1504

When A Bond Bull Becomes A Raving Stock Bull Authored by Lance Roberts via RealInvestmentAdvice.com, Over the last few years, I have continually battled the “bond bears” about calls for higher rates simply because rates were low. Here is a short list of some of the more prominent calls for higher rates: 1/9/18 – Bill Gross Says Bond Bear Market Confirmed 1/10/18 – Have We Entered The Bond Bear Market 1/11/18 – Has The Bond Bear Market Finally Started 1/11/18 – The Bond Bear Is Here 1/10/18 – The 3-Decade Bond Bull Market Is In Danger 4/17/18 – Bond Bears Bet Rates Will Blast Above 3% Those are just a few, and certainly, there were many other calls for higher rates from every corner of Wall Street. One of the biggest issues with the predictions of rising 10-year bond yields, which started in earnest in 2013, is they have been consistently wrong. For a bit of history, you can read some of the more recent posts on why I have stated rates can’t rise in the current environment. (The first post on this topic was June 2013) Bond Bears & Why Rates Won’t Rise – 2017 Why Bonds Aren’t Overvalued – 2017 People Buy Payments – 2017 Upcoming Bond Bull Market – 2018 Why Gundlach Is Still Wrong About Higher Rates – 2018 The Bond Bull Market – 2019 The Fed, QE, & Why Rates Are Going To Zero – 2019 (Of course, we have been avid buyers of bonds on “rate pops” in our portfolios during that time frame as well.) It is this bit of history that I share with you, which brings me to my thoughts today. Each quarter, I take a look at the “Commitment Of Traders” report to see where professional traders are positioning themselves in the market. Here is an excerpt from the June analysis explaining a bit more about this data. “The COT (Commitment Of Traders) data, which is exceptionally important, is the sole source of the actual holdings of the three key commodity-trading groups, namely: Commercial Traders, Non-Commercial Traders, Small Traders The data we are interested in is the second group of Non-Commercial Traders which speculates on where they believe the market is headed.” In the June report, I discussed the issue with the extremely bullish positioning in interest rates specifically. “The reversal of the net-long positioning in Treasury bonds will likely push bond yields lower over the next few months. This will accelerate if there is a ‘risk-off’ rotation in the financial markets in the weeks ahead. However, as shown in the updated chart below, despite the sharp drop in rates, traders are still betting on a surge in rates and the net-short positioning on the 10-Year Treasury is at the second-highest level on record. Combined with the recent spike in Eurodollar positioning, as noted above, it suggests that there is a high probability that rates will fall further in the months ahead; most likely in concert with the risks of a recession.” “The chart below looks at net-short positioning ONLY when net-short contracts exceed 100,000. Since peaks in net-short contracts generally coincide with peaks in interest rates, it suggests there is more room for rates to fall currently.” I have updated the last chart to show you where traders are positioned currently. Despite rates falling to 3-year lows, traders are still at some of the most extreme net-short positionings on rates in history. This net short positioning provides “fuel” for further price increases in bonds, and declines in rates, as traders are ultimately forced to cover their positioning. As noted above, the extremely long Eurodollar positioning also suggests a further flight into the safety of Treasuries is likely as a larger mean-reversion in equity prices takes hold. The Lonely BullAs noted, I have been a “lonely bond bull” for a long time now. While I have repeatedly called for lower rates, due to the actual “economic” backdrop, it was a very out of favor view. All of a sudden, I am no longer lonely. The hardest part about being a contrarian investor, is holding firm to your beliefs even when the data turns against you in the short-term. Such seemed to be the case in early 2018, as a slate of stimulus from tax cuts to natural disasters temporarily boosted economic growth higher. As we warned several times, that bump in economic growth was going to be ephemeral since it was temporary in nature, and funded by deficit spending, rather than an organic shift in economic strength. From a technical perspective, it was also reasonably easy to make a contrarian call when the 24-month rate of change in interest rates hit the highest level in history going back to 1957. (Importantly, note that every previous spike in history coincided with either a crisis, recession, or both.) Currently, rates are extremely extended as investors have decided to seek “safety” over “growth” as uncertainties over the economy, and the ongoing “trade war,” continues to make headlines. The chart below expands on the analysis above. Bonds, and by extension interest rates, are extremely overbought in the short term. It is quite likely that in coming months we will see a bounce in rates to some degree. However, ultimately, the current cycle will not be completed until rates most likely reach ZERO. Heading To ZeroAs shown above, rates have remained confined to a near 40-year downtrend, and given the Fed is being pushed to lower rates to ZERO, it is quite likely the 10-year will ultimately approach that level as well. The reason is simply due to the ongoing weakness which continues to plague global economies. As I just wrote recently: “The issue of rising borrowing costs spreads through the entire financial ecosystem like a virus. The rise and fall of stock prices have very little to do with the average American the vast majority of whom have no stake in the markets. Interest rates, however, are an entirely different matter and has the most significant effect on the bottom 80% of the economy. Think student loans, auto loans, credit card debt, and mortgages. The chart below shows the composite economic indicator of inflation, wages, GDP, and savings as compared to interest rates and the S&P 500. Sharp upticks in rates have historically led to financial events, recessions, market corrections, or a combination of all three.” Rates are ultimately directly impacted by the strength of economic growth and the demand for credit. While short-term dynamics may move rates, ultimately the fundamentals, combined with the demand for safety and liquidity, will be the ultimate arbiter. When you have $13 Trillion in negatively yielding sovereign debt, money will flow to the bonds with the highest, and safest, yield. Today, the sovereign debt with the highest yield, and most safety, is the U.S. Treasury. As money flows into the U.S. Treasuries for safety, security, and return, from both domestic and foreign purchasers, yields are driven lower. (This will be exacerbated by the short-squeeze in bonds as noted above.) Take Japan, for example. Rates can’t rise in one country while a majority of global economies are pushing low to negative rates. As has been the case over the last 30-years, so goes Japan, so goes the U.S. Like Japan, every time rates begin to rise, the economy rolls into a recession. The U.S. is already facing many of the same demographic and economic challenges. Unfortunately, for the current Administration, the reality is that cutting taxes, tariffs, and sharp increases in debt, is unlikely to change the outcome in the U.S. The reason is simply that monetary interventions, and government spending, don’t create organic, sustainable, economic growth. Simply pulling forward future consumption through monetary policy continues to leave an ever-growing void in the future that must be filled. Eventually, the void will be too great to fill. While the Fed was hiking rates on expectations of stronger economic growth and inflation, we stated several times that doing so would have negative consequences over a very short period. It didn’t take long for the Fed to realize the same. At the end of July, the Fed cut rates for the first time in a decade. They are also stopping their “Q.T.” program to prepare for the restart of “Q.E.” It is all precisely as we said they would on December 24th of 2018: “At some point, the Federal Reserve is going to step back in and reverse their policy back to ‘Quantitative Easing’ and lowering Fed Funds back to the zero bound. When that occurs, rates will not only go to 1.5%, but closer to Zero, and maybe even negative.” Becoming A Raving Stock BullIn the next few quarters, we are likely going to deal with an economic recession combined with a mean-reverting event in the market. Another 50% correction, as we have seen previously, is very possible due to the underlying debt and pension risk. While timing is always difficult, the probabilities are very high. “What causes the next correction is always unknown until after the fact. However, there are ample warnings that suggest the current cycle may be closer to its inevitable conclusion than many currently believe. There are many factors that can, and will, contribute to the eventual correction which will ‘feed’ on the unwinding of excessive exuberance, valuations, leverage, and deviations from long-term averages. The biggest risk to investors currently is the magnitude of the next retracement. As shown below the range of potential reversions runs from 36% to more than 54%.” For investors, this is where the real opportunity exists to buy equities. Valuations will be cheap, dividends will be elevated, and the risk/reward dynamics will clearly be in favor of equity ownership. On the other hand, bonds will be at their maximum value (rates at zero leave little upside for capital appreciation reducing total return from the investment.) At such a crossroad, allocation models need to be shifted, just as they were in 2003 and 2009, to be primarily invested in equities. On the bond side of the allocation will be opportunities in busted convertibles, bonds of companies forced into reorganization, and the debt of companies deeply depressed in price due to forced liquidations by investors and pension funds but which have fundamentally strong balance sheets. The return to value will be a great opportunity for investors to capitalize providing they weren’t wiped out in the previous decline. Unfortunately, this won’t be the case for most. This is why risk management, particularly at this juncture of the investment cycle, is so important. If you don’t “survive” the coming “bear market,’ you can’t take advantage of the next “great stock bull market.” Want to be a stock bull? Your chance is coming.

To: Rarebird who wrote (1073)	8/23/2019 6:43:10 PM
From: John Vosilla	Read Replies (1) \| Respond to of 1504

I thought Clinton and Reagan were our best presidents in my lifetime by far until Trump (I don't include Eisenhower because I was born 1960...JFK unfortunately an incomplete).. I'm more pragmatic independent thinking always have been always will be but identity with most in GOP these days.. I actually probably hate the never Trumper neocons most of all as they've been wrong across the board for a generation.... No love for the progressive movement either these days. Trump picks unneeded fights and says some things in a way that I certainly wished he wouldn't (like his tweet storm today) but on overall policy I like most of it. The democratic party has gone totally crazy in recent years IMHO.. Clinton 1992 and 1996 would be to the right of how Trump is governing today as would Biden from that time period.. For the good of our country the dems deserve a shellacking in 2020 so they can totally rebuild the party from disasters of socialism, identity politics, cultural marxism and green new deal..