Keep Your Eye On This Ball!

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Originally published at: Keep Your Eye On This Ball! – Peak Prosperity

In this week’s Finance U with Paul Kiker we discuss the yen’s downward spiral and how this could disrupt a multi-decade investment strategy (called the carry trade) and lead to Japan’s forced selling of US Treasury bonds which could spike interest rates.

Of course, it’s equally possible that the Fed opens up a secret ‘swap line’ and just prints up and hands over as many dollars as necessary to Japan’s BoJ. Anything to keep the game moving along, right?

Yes, our markets have become ““markets”” and the necessary interventions by the central banks to keep the whole mess somewhat operational are growing in both frequency and scale.

As we all know, those practices have an expiration date. Getting yourself positioned for that eventual financial crisis has to happen before the fact to be effective.

As we can all feel, “something” is up. I believe we can track the progress of the story by paying attention to the big pieces, namely the yen, the US Treasury 10-yr rate, and gold.

Enjoy the show!

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Instead of using technical analysis to try and figure out why silver is down, maybe we should enlist a psychoanalyst to try and figure out why the “Forces” are holding it down?

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Somebody told me once that technical analysis is like trying to read the pattern in tea leaves at the bottom of the cup.

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Always enjoy your weekly talks with Paul. I was wondering if you have talked to Grant Williams lately? I used to get his weekly TTMYGH back when it was free. He was all over the Yen carry trade for years, and calling for a big Yen devaluation. Maybe he was 15 years early but I think he had it right, even then. He would be a good source of info on the subject…

Cheers!

Edit: On wage inflation… aren’t those 3 million on disability more than offset by the 3 million (or 10?) new migrants? Without those migrants there would be much more wage inflation imho.

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I’m going to do a big dive on Silver for this Friday’s report. It’s astonishing!

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Cool thing about those 3 million on Disability. The #1 industry for jobs growth for the past 3 years has been the health care and social services industry. I gotta imagine that many in this health care and social services have been hired to take care of those disabled by the holy shot.

The next largest source of job growth in the US economy has been an expansion in direct government jobs.

Industry, agriculture, services - almost no job growth, perhaps in some sectors an implosion.

Health care, social services and government expansion are all ‘government jobs’ and are not productive for the economy as a whole. It’s a giant sucking sound.

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Going off in the Middle East.
Futures getting clubbed and gold within $20 of its all time high.

https://www.zerohedge.com/markets/futures-tumble-oil-and-gold-soar-reports-huge-explosions-central-iran-israeli-airstrikes

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Hey Chris,
Do you still have access to that video clip of Putin and Xi shaking hands and making that cryptic comment to the assembled reporters outside a building in Moscow (I believe).
Might be good to review what they said given what has been going on recently.
Cheers,
Steve.

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Even “cooler” when you think of the Holy Shots as purposeful weapons in a war.

I hear tell that its better to wound the enemy on the battlefield than kill them outright as one wounded man might require the aid of three others who are then too tied up to fight.

The shots killing us slowly is arguably better for TPTB than all these clean “sudden deaths” we see in the papers.

Imagine trying to tally up all the resources being drained from The West by just this one part of the Covid Adventure.

I think we will actually be told someday. If it did turn out to be Bill and Klaus, they wouldn’t be able to resist telling us how cleverly they planned the whole thing. It’s how they roll.

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Lamentations for good old days, or at least more sane old days…

Today markets are whack. I studied finance 40 years ago but none of it makes sense anymore – the value of a company used to be based on discounted cash flows, earnings, risk, etc. Today I suppose some part of an individual security’s value relative to another security may be correlated fundamentals but no idea how much. Overall markets move in unison, but how much variability is there at individual security level? The magnificent 7 now 6 earnings are up while the vast majority of companies earnings went down. When the fed creates money and it inflates financial markets, how is that money distributed across individual securities?

How can it be that commodity prices are flat in nominal dollars year after year - with input costs going up, demand going up? What’s up with silver where supply is short of demand and yet prices don’t go up? Not rational at all.

In the 80s we learned about the put call parity theorem I think it was called, and Black Scholes. Seemed like a whole lot of math. Perhaps that was early days or precursor to the whiz kids Financialization of things. I never really didn’t understand it then and still don’t get it. Now there are derivatives on top of derivatives - forget it. It really is legalized gambling with others money - I think that’s one of fundamental messages from the The Great Taking when it all tumbles down. I don’t want to be a chump any more, nor missing out in musical chairs when the music stops.

Glass-Stegall was still in effect in the 80s and things overall had some semblance of sanity and integrity. Bretton Woods monetary agreements seemed to help grow international trade, and the US still valued a manufacturing base – but I suspect the ground work for off-shoring was being laid. Still, the world in the 80s was more tangible. Now nothing seems real any more.

Back to the present and pragmatically what’s an investor to do? If Paul is correct about Buy and Hold not working in future and/or other major shifts, I’m increasingly willing to pay for advice and management by professionals - and they must be trustworthy. I especially appreciated the last several minutes of Chris and Paul’s conversation emphasizing that morality and character still count. Amen!

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I thought the same thing…why this is a breath of fresh air.

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I’ll agree that the level of complexity has increased, IMHO mostly from computers being able to calculate and trade at a level far beyond us mere mortals. But the corruption has always been there. It changes in how it expresses itself throughout history but stealing OPM has always been a thing. Re the 1980s:

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That giant sucking sound is not without utility. It prepares you for the quality of healthcare you will receive.

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“The glory which is built upon a lie soon becomes a most unpleasant encumbrance. […] How easy it is to make people believe a lie, and how hard it is to undo that work again!” – Samuel Clemons

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I started buying “junk silver” at Pawn shops in 2016 and have a small collection of US silver coins. I have been frustrated that the spot price of silver does not match the actual price that you must pay to get physical silver.

JPM is rumored to have a large short position in AG and this is causing a huge market distortion. The markets are rigged and the big players are allowed to manipulate the price in their favor against the retail investor.

Even if the big players are forced to stop, they likely will not suffer any consequences. They will simply receive a bailout for their loses and force their counter parties to accept freshly printed dollars for their paper silver claims.

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I asked a question a few years ago on this site (maybe no one read it). What is the least manipulated investment category?.. no responses then, but would love a reply. Personally, I am left with managed investment strategy with old style basics as the base philosophy, with seemingly good character and morality (so far anyway). Precious metals have allure (if physically in possession), but living between 2 places makes security from theft a significant risk, and government is tracking purchases and holdings.

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I do…it’s stored on my local disk, as are all my important files. :slight_smile:

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Hi Chris,
Thanks for getting back to me.

If you had time could you let me know what they said.
It was something like this is the future or such like I believe.
Thanks to you and your team for all the great work you do.
Looking forward to your scouting report about silver.
Cheers.
Steve.

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Oh, I wouldn’t say TA is that accurate!

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You might be onto something there.