Betting on an Uncertain Market

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Originally published at: https://peakprosperity.com/betting-on-an-uncertain-market/

Executive Summary

Chris Martenson and Paul Kiker discuss the potential impacts of the upcoming election on financial markets, the BRICS movement, and the current state of gold and silver prices. They explore the complexities of the current economic environment, including rising US Treasury yields, the role of central banks, and the potential for a recession. The conversation also touches on the challenges of interpreting market signals amidst political and economic uncertainty.

Election Concerns

Paul shares that many clients have expressed concerns about the election’s outcome and its impact on their investments. He emphasizes the importance of staying informed and making decisions based on unfolding information.

Market Uncertainty

Chris and Paul discuss the difficulty of interpreting market signals due to factors like dark pools and central bank activities. They note the unusual behavior of markets, with rising yields and gold prices, and the potential implications of these trends.

Oil and Economic Signals

Paul highlights the decline in oil prices and diesel consumption as indicators of potential recessionary conditions, despite market optimism. He draws parallels to past economic downturns and questions the reliability of current data.

Key Data

  • Gold is currently at $2,800 an ounce.
  • US Treasury yields have risen despite a recent rate cut.
  • 95% of Russia’s external trade is now in national currencies.

Predictions

  • There is a potential for a recession, as indicated by declining oil prices and diesel consumption.
  • The US bond market may experience significant moves due to rising national debt.
  • Commodities may become a valuable asset in the future.

Implication

  • Investors may face increased risk due to market volatility and political uncertainty.
  • The de-dollarization efforts by BRICS countries could impact the global financial system.

Recommendations

  • Consider shortening the maturity of investments to mitigate risk.
  • Be cautious about tying money up in long-term treasuries due to inflation risks.
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A thought came to mind as I listened to you and Paul talking. What statistics would have warned the investors before October 1929? In 1127-28, a few people were foretelling an economic crash but from where came than opinion? Back in 1929, the data was hard to find and the government provided very little information, let alone current information. Today we are inundated with information. It is an information firehose. Since history rhymes, maybe it is time to look at history.
But somehow pattern of a poetic line made up of iambs may be different. Will it be in Iambic pentameter, trochaic pentameter or dactylic pentameter? And, where are we in that story. Unfortunately I recall little about the time of Coolidge and Hoover. In any event, a walk down history lane might be useful.

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In 1963, minimum wage was 5 quarters an hour. $1.25. Those quarters were 90% silver. Today, those 5 90% silver quarters are worth $32.50. Is minimum wage?

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What do all the movements in the market mean, and how can interest rates, markets, gold, and dollar all be going up at same time? How can Germany’s economy be retracting and yet the DAX is up and to the right? Methinks something is rotten in the state of Denmark - surely the irrational exuberance craps out and some sort of correction and rectification takes place. So glad Paul and his team are managing my money.

A few of my favorite moments in always enjoyable and educational Chris and Paul discussion:
~ 39:20 - loved Chris’ stubborn rage – if you want me sick, then I’m going to be healthy.
~ 52:20 - 1:00:30 Discussion on excessive rules and regulations, skewing game in favor of large corporations Vs. an economy with real opportunity and freeing up innovation and power of small businesses. Maybe Elon could help unburden the folks.
~1:05:00 Integrity definition - one must have a whole lot of humility to have the integrity Chris describes.
~1:11:00 Free Speech - agree the antidote to speech people don’t like or mis-dis-mal information is more speech and transparency. IMO Freedom of speech and preventing and undoing censorship is #1 concern should current crew retain power.
~1:22:00 - 1:24:00 BRICS rational reaction to dollar weaponization - a really bad idea, and saying goodbye to PayPal - good move Chris. I wish we the people woke up and used our power to be smarter voters with our $. The authoritarians are good at mobilizing their mobs against their boogie man du jour - we the people don’t organize and act together - we’re too busy with real life, not tuned in, etc.

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Diesel demand lower is just good thing. Id think supply is pretty rigid that it cant bend upwards and that is necessary fuel for economy. Gas cars can stay at home if needed, having relief effect on prices and demand.

AFAIK 2020 it was gas/petroleum that dipped a lot but diesel usage was pretty much as is. EV/fuel cell vans and trucks are not big enough deal to help. Diesel is also “midtier” oil product so it is hard to replace.

So my guess is western economies are kept low as to not hit this oil based fuel ceiling that would cause explosion in prices and bad guys collecting record revenue. Lower purchase power economies they use human power or some alternative with cash being limiting factor.

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Interesting discussion. I was looking forward to the commodities part and to learning more. Maybe next time. Thanks!

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I’ve been working on updating my recession models. Here’s the “general” one. It is more-than-hinting at a recession. It also thought we almost-had a recession back at the end of 2023.

USREC1.Forecast.month.3.2024-Sep
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How to read this chart? looks very sciency[program] ie hard to read.

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But Trump is not running against Harris. He is running against unbridled yet well documented (only on X) Election Fraud. That’s why I think Election Fraud will win because making us “aware” of it while it’s happening in broad daylight, documented on video, doesn’t change one stolen/fraudulent vote and Harris will be the next president. That’s what I’ve prepared for.

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Just yesterday my spidery sense started tingling and a few things clicked…

. over the last year every single one of our major employers locally and just last week our biggest one layed off double digit % employees … ok fine inflation etc… all my buddies that got hit last year are either unemployed still or the lucky ones found temporay contract jobs for 2/3rds their old jobs with zero benefits…

Ok they admit now all these jobs Biden made with his “great economy” are low paying ones… there were hiring signs everywhere right?.. well maybe not so much… in the last couple months I have seen a shift but didnt notice it until now…

  1. Everybody in the grocery line is paying with a food stamp card
  2. Our NW largest restaurant chain Shari’s been a staple since high school “our Denny’s” just closed all of its doors
  3. Ive noticed lately…long waits in line for fast food…sometimes 20 minutes in many cases when the place is almost empty of customers most notably

Subway at least 2 locations only have 1 person on staff… seems to be the manager
1 of them the toaster is broken and the manager is apologizing saying the owner isnt making enough to replace it and cutting her hours…

Burger King 2 locations at least…again 1 manager, 1 cook… only 2 the manager is jumping between drive thru and counter and back

The Five Guys location I go too used to always have lines… yesterday during lunch hour… completely empty…

In fact the only place that seems to be doing ok is Mcdonalds… and they replaced all the counter employees with self order Kioks…and brought back the $5 value meal

the low end fast food restaurants here are ghost towns running on skeleton crews… which tells me… no more surplus of minimum wage jobs… and no more small discretionary income to buy a cheap burger… something is rotten in denmark… I think they are hiding it…and the dam is springing leaks

Now I get inflation is up, prices have gone up, but these restaurants survived Covid and are being taken out or already on life support… So I’m asking where are all the minimum wage jobs that were created?

Now I wasn’t that old in the 70’s when the economy was bad but I do remember it… but this shift in the last 2 months feels off and bad…like really bad… like worse than anything I have ever seen… and that counts the 70’s economy…

and all the while Data Centers and high rise apartments keep going up overnight like a gold rush or las vegas boom town… it doesn’t mesh…if people cant afford a burger… how are they going to swing a $1600 a month studio apartment?

now I’m no economist, " I got C- in college economics " but if I had to throw on a dart board… at least here in Oregon… I’d aim for depression.

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So yiu talk of Denmark? My obesrvation is smaller countries get hit first when hurricane is coming, bigger ones like US may survive tad bit longer.

Like someone pointed in other threads, this time everything happens at same time everywhere on earth… 2008 wasnt that universal, spotty in some places outside US, some were totally unscathed(russian sphere, near china maybe).

Didnt it boom just before 1929 and 2008 crash too. Then bubble bursts and depressive post covid times hit.

5$ meal doesnt sound so much… people must be really struggling to not afford even a single pizza.

Your description sounds of Weimar republic… more money in bank account, yet either shortages or they cant afford daily basic things. Yet they could afford food more or less that period. “Economy looks good” sure when they print so you have cash in bank account but prices go up higher so money in bank account cant buy much… not worth to go to downtown.

Every job is same… doctor’s papers, engineer, software developer dont get solace when out of job no matter how great they were in previous jobs. Everyone on the job want to repeat how it was great to study and was worth the risk. Yet everyone know those with job have biggest illusions.
Just today I watched couiple ex-economy students, one professor, one in private business side and very succesful and professor caught him repeating things we everyone have: same stuff we wanna believe but repeat too many years and we loose it… essentially similar as woke things, we repeat coz it gave status and try to milk it too long even if it did was true in the beginning[that earned that bragging rights from others], everything has expiration date(this guy loves to repeat income tax gripe forgetting everything else when they were talking overall economy in europe).

They kept building these and since 2022 maybe lots and lots even regular grade apartments are unsold now… overpriced of course. Builders didnt listen city people, average folks when getting loans from bank was too easy and money printing was hot(basicly over 10 years).

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Can they hide her in basement for 4 years if she cant handle that demanding job especially when Xi and Putin start testing new president on the job throwing some curveballs.
I mean doctors can do medical miracles but incase mental stress breaks into psychosis and nervous breakdown, I dont think doctors can fix that.

Both side have big risks , a bit different ones in this respect. Vance could potentially carry torch, of Walz Im not sure, he seems tad bit younger Biden.

Mario Draghi in europe managed to calm markets by stating “everything it takes” so who is in charge really matters in turbulent times. FDR had fireside chats to calm similar economic era(at least it is attributed to him).

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Blue line = forecast recession.
Black line = actual (declared) recession.

So when blue line jumps higher - there are a bunch of “recessionary factors” causing it to do this.

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its an expression in the US… not country specific so nothing intended there… I don’t see shortages yet… but I don’t see the help wanted signs everywhere anymore… and I can see the impact now…

Crime is another one… Home depot has bars over copper wires and power tools…

Just yesterday i went to Coscto “Sams Club on the east coast”… they always checked for membership card and receipts when leaving… but NOW you scan your badge to get in and your face picture shows up on a big screen to confirm its you… just like getting thru passport control on TSA… “digital ID or crime prevention you decide”

another big local Chain “Fred Meyer” a higher end Walmart…over the last year. started with solar powered security camera trailers in the parking lot for car break ins , then a receipt checker when you leave, then they added gates bars to stop people from leaving until the receipt checker opened the gates, then they added bars that open when you enter and close behind you so you cant exit the IN doors… plus chains through the goods on shelves…

and the usual suspects are not longer here in force… We “exported” 80% of our homeless out to central oregon… “immigrants” were here in force for a while… but then 80% disappeared… I got a buddy who drives the state and has seen double decker buses loaded with em stop at gas stops on each state line… so I guess they are being moved THRU and not IN… maybe to Colorado or Ohio?

So that means its also the locals with homes and at least HAD former jobs are getting desperate…

Home Prices are also seeing a hit… been looking for a more rural place with acres past couple years … now during covid… tear downs with an acre or more in the state would run over a million… now i can find em for half that.,so 50% hit in the last year… we considered selling this summer and found out our home on the hill in prime suburbia with only 1/3 acre has probably lost 20% of its market value since its peak during covid.

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Guessed so much but couldnt confirm.

As @thecountmc described, it is about to blow soon like blue indicator keeps going up.

Im baffled how economists downplay record mass layoffs been happening since 2022 in US. That is main key in economy, to have salary income to be able to spend it.

I wonder how long immigrant checks keep valid… if they gotta cut spending, also those must go and bounce. Homeless are another group. Although at this point collusion with fentanyl distributors is another 9/11 conveniently wiping out homeless population away so they can wash hands of that problem.

As there seems to be no jobs for “immigrants”, can look covid times how long people are fine just sitting at home doing nothing giving updates to back home with smartphone until they “flip” and start doing crimes or something to avoid getting crazy. Around fall of 2020 started to get tense. Another 6months and most damage was done, lots of divorces and that stuff(stats and actual info to confirm gut feeling came much much later).

Another thread has Denny’s covered:

Thread:

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its not this… Ive seen the dot com silicon forest job boom when people moved from california and seen the build up, Ive been here when millennials thought Portland was the place to be in the US and seen the build up…

this is orders of magnitudes greater in growth and size…with no economy or popularity trend to support it, there are not enough people to live in em… empty parking lots, leasing signs everywhere…

and they keep smashing homes and building more and more these go up in months not years…and they are not stopping… its not a supply and demand over shoot because of easy money and optimism…

its an intentional supply over shoot because … somehow now money and demand and reason no longer matter… the governor tried to pass an executive order that gave illegal migrants 2 years free rent… now the people stopped it for THIS year… but maybe there is some hidden incentive there with gov $ and grift? and new planned neighbors? I don’t know…its just off… WAY OFF

Even more interesting some but not all of them are specifically exclusively “inclusive”… specifically you have to have a certain sexual orientation or come from a certain foreign country to live there…others have an vague “inclusive” theme you can’t figure out who the target is… or the requirements to live there are

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I dont get this part of economy. Apparently some part still functions with turbo when regular joes are out of job and cant even get loan from bank anymore. In China they said they let this construction continue overdue to postpone wellknown events that always happen. It is way of timing economic crash. It is also way to overdrive so your enemy company is guaranteed to crash. Essentially economic system has mechanisms like interest rates or even simply FED/central bank lendings, stop those faucets and wasting money stops quickly. I just cant but think how finite earthly resources are wasted in that kind of construction for shortterm gain. And other aspiring growing economies look and take notes and will copy that model. Resembles toilet paper hoarding, just in bigger scale.

Follow the money who collects that rent. They try to loot last bucks from sinking ship this way. To me this is cannibalism in economy, eat your future and also living infrastructure for some very shortterm (potential) gain. If renter never even sees receipts, they can write rent to be anything. Perfect crime. Just after 1-2 years those immigrants start trashing and smoking drugs and doing crimes in mass scale so this plan gets ruined and they cant even get many people to live there.

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As it goes, it’s from Hamlet by Shakespeare:
“Something is rotten in the state of Denmark”

C- in English Lit for you both! :wink:

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Don’t look now, but the Treasury market continues to signal that something is very off:

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image1066Ă—1078 155 KB

Even the pros are scratching their heads:

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(link for more head scratching: x.com)

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If Raoul Pal is flummoxed…

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