So a couple months back there were some great posters on here who gave a hypothetical blueprint for the direction the Fed was going to take going forward as it relates to interest rates, bond yield curve control, and how these would affect stocks and metals. There was one particular poster who wrote out a long comment about the rapidly rising 10y treasury note and how before long, the fed was going to be forced to institute yield curve control in order to prevent a stock market collapse. In doing so, the fed would print nearly infinite money and put us into greater inflation, spurring a run on metals.
Fast forward a couple months, and here we are with the 10y bond yield being slightly lower than it was in June, today's Fed minutes denouncing the possibility of yield curve control, and we see metals and metal stocks take a huge shit as a result. To those of you more familiar with what is happening, what exactly is impeding the collapse of the economy that would necessitate yield curve control? Is the dollar's status as the world reserve currency and its ties to oil and a strong US military making us invincible to econonic catastrophe?
I feel like we are in a state of limbo here and I can't figure out why 2+2 continues to equal 5 when it comes to fed policy and its effect on the country and the economy at large. Can anyone out there help provide some clarity and perhaps outline a path forward?
nothing will happen until november, probably even eoy. then stocks either crash hard or we will see rampant inflation of 10%
Adam Collins
Why tho? Why has this not already happened and what's to stop this fucking marry-go-round from continuing for another 10 years?
Brayden Foster
the US is entering Japanification territory. the FED can only do so much.
Grayson Brooks
Yeah I remember this was discussed a lot in the pmg threads
Fed didnt denounce YCC, yields have been falling since end of 2019 and are still falling after all this economic destruction, so its pointless for them to cap them if they are never going to rise.
No one can really figure out why yields are so low and keep going lower, worse economy with more uncertainty and higher inflation expectations should in theory force bond yields to rise as the big money market participants (ie. primary dealer banks) would stop lending at such low rates, why would they accept greater risk at the same price? thats what the fed was afraid of they, like everyone else, they thought yields were going to rise but they havent
I'm guessing there is something going on in the shadows of the banking system (the real banking system outside of the fed), only explanation I can think of is that the banks, having suffered a freeze in the repo market in 2019 due to all the junk assets that were being used as collateral, are now worried about repo failure again and are desperate to hold liquid collateral, the most liquid being treasuries, fearing downgrades on corporate bonds and risky equities, with their balance sheets accumulating massive amounts of bad debts and non perorming loans thanks to the shutdown, interbank lending could freeze again with banks only accepting the safest most liquid collateral, hence the reason yields arent rising, institutions are desperate for collateral to secure future financing and are willing to pay the risk premium knowing that things are probably going to get a lot worse
you're seeing metals take a huge shit because COMEX just dumped 10x annual supply of silver (in paper contracts) onto the market in an attempt to manipulate the price and get better deals on physical before the cat's out of the bag. In sep COMEX has to cover this and we'll see true colors coming out as PMs moon. Until then, expect significant volatility.
Debt to GDP ratio is at levels not seen since WW2, and the fed is printing untold amounts of money. The cynic's reasoning for this is because they're between a rock and a hard place: either they blow the 2% inflation mandate with YCC, or blow the "no depression plz" mandate, which because of politics and elections won't happen. A lot of higher ups are jumping ship right now because they see the shitshow going south by EOY. Either way, the Fed is stuck printing money until the cows come home and the normie american will see their purchasing power dwindle probably by 10% a year.
Personally I don't think the cold war ever ended, it just went into economic territory, and this could be a long-term play against the US's enemies. The US tax payer is paying the prices of a full-blown world war right now, but there's no real major conflict, so obviously something is going on.
The institution of the digital dollar is interesting. I don't think the Fed are a bunch of short-sighted idiots, although their decisions go against what seems to be good sense. But if you look at what's been going on with gold since WW2, with america seizing all the gold of europe and SE asia and hiding it away (not in fort knox), it's not a far stretch from there to think that through massive devaluation of the petrodollar, thereby making our debt completely worthless and collapsing the global economy, the US is committing massive economic warfare on a scale we've never seen before, and through institution of, say, a gold-backed digital fedcoin or something, complete with (surprise!) war gold, we could see a resurgent US in a generation
Landon Roberts
We're only just getting started. The Fed minutes were sympathetic to YCC, and nobody expected something as significant as YCC to be announced in the Fed minutes. FOMC in September is where YCC will be announced if that announcement is going to take place. And even if the Fed doesn't announce YCC in September, it will continue to print in order to keep the yield under control, whether openly or secretly. The yield cannot be allowed to go up. It's that simple. If it goes to 1%, everything crashes. It can only go lower from now on, never higher. As time passes, the bond market will crash, and the debt will increasingly monetized, until the whole system collapses.
Metals have responded extremely well since the June thread was created. Gold used to be $1670, it recently got as high as $2080. Silver was $18, it recently pushed against $30. GDXJ is up 25%. Metals are manipulated in the paper markets, but the paper markets are apt to default at any delivery month, for want of physical metal; possibly as early as September. When that happens, metals will soar to levels we can hardly imagine.
The real economy is never going to heal. That's obvious. Q. E., as we know, only makes the real economy worse, because it redirects wealth into asset-bubbles and the hands of the top 1%. It does not allow mal-investment to be reallocated, and bad businesses to go out of business. Real unemployment is at 40%, and helicopter money will be needed to keep people's heads above water. That helicopter money will cause massive inflation in the real economy, thus crashing bond yields even lower, and making gold go higher.
It was speculated in the June thread that Warren Buffett was hoarding silver; this would seem to be confirmed by his dumping of banking stocks and buying of Barrick Gold. A banking crisis would seem to be imminent, a fact which is reflected in their share prices. If we did get a banking crisis, which might happen any day now, the bailout would trash the dollar.
Mason White
Why are good threads like this so rare on this board. Its not fair
To add to this: we can chart this economic process happening whenever a society starts relying on debasing their currency to fuel economic spending. Fiat has been invented many times throughout history. The denarius was debased to fund roman nonsense and we can chart the economic impact of this through shipwrecks in the mediterranean. The athenians discovered electrum and started debased their currency to fund public works projects and suffered for it a couple generations later. Same with Spain, then Portugal. Every single reserve currency lasts about a hundred years and then flatlines, to be replaced by another one. These times of transition are where the next dynasties are born.
Every single time, throughout history, that the ruling class decides to start printing money willy nilly, it ends the same way. The same with pandemics and their influence on interest rates. After the spanish flu, there was a brief increase in interest rates, and then it went negative for like 10 years.
If anyone is looking to profit from this and thrive, or to keep their heads above water and survive, you need look no further than history as a guide.
Isaac Nelson
any thoughts on the capital gains tax holiday Trump is set to announce soon?
won't this incentive the 1% to cash out of everything causing a temporary bull market for the dollar.
Connor Allen
>Fed denounce That didn't happen at all. They in fact called it mildly beneficial but not needed at this time.
Shameless bump, some excellent explanations in the last two posts. September can’t come soon enough
Colton Scott
Where would you recommend to park your money?
Chase Kelly
Not op but the people memeing gold aren’t hoarding it like Smaug for no reason. We write them off as paranoid but if shit were to seriously hit the fan and the dollar collapsed, gold is what you would want.
Basic charting on the eurodollar (not EUR/USD) and the effective funds rate show wedges that put negative interest rates on the table for the dollar.
That would be cataclysmic. If oil can go deeply negative then so can interest on the dollar. This contractions will cause another dip in precious metals futures while the street and eBay price goes through the moon
Sebastian King
COMEX manipulation is the only important thing which wasn't touched on in the June thread. People have to understand that today's crash in gold and silver is just as artificial as the vaccine selloff a few days ago, the selloff after the last FOMC meeting, etc. It isn't real people doing it.
Hunter Nguyen
This
Jordan Green
You have to wait for fundamental events to happen then go through the shit.
I'm betting on inflation. Makes it a lot easier to hide what they're doing if they boil the frog slowly and evaporate all the normies wealth without them realizing it. Inflation fucks over the middle/lower class who don't have much/any money in assets and whose wages will effectively be lowered because inflation won't be accounted for to readjust their salaries. Meanwhile the jews and their elite shabbos goyim have most of their wealth in assets and don't care about wagecucking, so they only benefit from brrrr
Levi Mitchell
when I'm establishing a position that I believe will go up 10x, I don't bother about a few percent here or there, I just big dick buy. When a macro trend is leading a certain direction, it doesn't really matter what happens in the micro. When you're sailing, you sail with the tide, not with the waves.
Does this mean you ignore the little micro blips, the waves? No, but those are rather unpredictable. The USD is the safest port in the oncoming storm, there will probably be a flight to quality in the global marketplace before it all crashes down.
The capital gain tax holiday will probably spur more rampant speculation in the markets, further surging prices to untold levels, and further decoupling the markets from reality. I think it'll be like the hoover recovery, where just before the great depression, there was a period of like 6-12 months where things were looking pretty good in the markets, but the underlying issues hadn't actually gone anywhere.
Cameron Ross
That's might thought as well. I don't think he'd announce a capital gains holiday because there would be ZERO reason not to cash out (at least temporarily) so that you can reenter with a reset cost basis for the future. And of course everyone cashing out would trigger a colossal self-reinforcing dump
Christopher Foster
Debt. Debt to GDP is at a level we haven't seen since WWII and we can't service this debt. So either we default or we inflate it away. We've never been this far up shit creek.
Thomas Davis
I just want to add that a benefit of the inflationary strategy that you people didn't notice is that it inflates the value of the USD not only for US citizens, but states trying to hoard it as a reserve, like China. Also, there are literally 3 points of interest on the brink of war in which the USA is interested in deeply, the Middle-East, the Postsoviet Area and Venezuela. At this point it might be more telling to keep an eye on these areas rather than the FED because just like Op said, the military advantage for the US is currently too big to simply lose in an economic war and just accept it.
I have just reallocated my portfolio to decouple my finances from the fiat system as much as possible while keeping exposure to allow me to take advantage of the sweet paper gains we're going to see for the next year. Obviously DYOR, this is just what I believe in.
50/50 stocks/crypto with no more than $15k fiat for expenses. exited all stocks, bonds, t-bills, etc. positions except for INTC (massively undervalued in the 3-5 year timeframe), a biotech longshot, and some clean tech for shits. significant holdings in precious metals miners, particularly AUNFF, SILJ, GDXJ, PSLV, PHYS. MUX, GORO, AUNFF, AG will moon in the next year. Anything with physical, tangible tier 1 assets, or directly tied to the production of those assets. Also picked up some physical silver, because I like pretty shiny rocks. I believe silver will go from $30 now to $50-$100 in the next fiscal year. In case things don't go down the way I think with the markets, no problem, PM retains its value. These miners are a great buy, even right now; they're valued at silver $18 spot, and those that have survived the last 7 year PM bear market with no debt and about to open up new mines are going to make it. Foundational DeFi enablers like LINK, SWAP, RSR are attractive in held for 1, 2, and 3 year timeframes respectively. An elastic supply protocol coin will be a good way to dump profits from the coming bullrun. RLC and PNK have potential if you have iron hands.
long story short, away from fiat, away from pump and dump, and towards the pillars of the new world economy.
The republitards fucked us all....They could have contained the Trump virus in March but they chose to ignore it and pump the stock market again. Now we're fucked and I have to vote for an old man with dementia with fucking hollywood pedos backing him.
