Do you know what a POLICY RESPONSE is? It is free money given to banks and used to buy (inflate) assets to combat deflation.
Just take a minute to think about this clearly. What Central Banks want are higher prices in order to prevent lower prices.
Imagine if you went to the supermarket and milk, which is usually $3 and is now $5. And the sign says “On Special for this Week Only”. Would you be in a hurry to buy the milk?
That is what you are doing if you chase a market bolstered, levitated, inflated by the Central Bank POLICY RESPONSE of free money. Only a stupid asshole would clamor to buy. Right?
If you are an individual investor, should you “Just Trade Price” and chase the artificially induced rally because it is going up? How high will inflated prices go? How long will they be inflated? No amount of analysis will suffice. Few have that kind of information, unless you get a call from Washington a day before POLICY RESPONSE is announced.
Sure, going into this week, markets were very oversold and we were due for a sharp bounce. Markets made back all that was lost since early in May in just two days. Historically, that kind of action is clearly one of a Bear Market. But with free money, who knows.
My advice in buying the great European companies with big yields still holds true. And owning cheap and unique franchises does too. But don’t be a sheep for they will be slaughtered.
12 Responses to Gee, We Better Get Asset Prices Up!
What would turn you into a buyer in this market?
there wont be any qe.people are fooling themselves to think that will continue on a regular basis. the ball needs to be thrown back in the congress’ court. the fed cant do anything without harming something else.like serious devaluing. jobs,jobs, jobs, or it’s nothing,nothing,nothing.
now thats a serious sandwich!
I’m going for a corned beef now. Thanks for flaring up my addiction!
This has been going on for years, now. The end goal is to destroy American middle class wealth, in accordance with United Nations Agenda 21 (backed by central bankers).
This will give them a big foot in the door toward a passive and powerless US middle class, which would no longer prevent sweeping moves toward global communism. Communism is the goal of central bankers because it ensures they can never be taken down from their thrown. They have been very public about their desire to use the Chinese communist model, globally.
The way they destroy middle class wealth (this is important since the US middle class represents the wealthiest and most powerful political force in the world) is by slowly diluting our currency (the US petrodollar, which lends itself to stability worldwide at all central banks no matter what the dilution is).
They dilute and give most of that money to banks which then use it to buy infrastructure and commodities overseas. This causes prices to rise worldwide, eventually reaching the US. In reaction, banks stop lending and tighten credit, to cause deflation at the same time. This controls and slows the price increases. This method also allows them to dilute the US dollar infinitely until they are ready to kick the legs out from under it, entirely.
This results in hard assets being purchased with US dollars by banks, and the destruction of middle class wealth.
You won’t see this on the front page of any central banker-controlled newspaper, unfortunately.
Since this is a slow burn of the US dollar, I recommend playing it out and trading stocks. Be hedged with precious metals and land ownership in the US and other countries. This way you can take advantage of the situation in the best way possible.
BTW, closed end funds such as CLM, IGD, and ADP are paying out nice distributions on a monthly basis. You should check these out.
kllm does ok. but some of these will cease to pay out if the interest rates go up. but yea 5-7% per month,where ya gonna get that from.
Me too … In my LT portfolio.
“Few have that kind of information, unless you get a call from Washington a day before POLICY RESPONSE is announced.”
Those who do get such phone calls will act on them. (It’s why they get the phone calls in the first place.)
Once upon a time (decades ago), the hypothesis was that such actions (whether nefarious or simply the decision of a portfolio manager to take a large position) showed up in the charts in the form of price and volume signals, from which we developed entire field of technical analysis.
I’ve always thought that one of the more interesting avenues of research would be to test the reliability of volume signals in the pre-HFT era and the present (HFT-dominated) era. (Similar research could conceivably be done to determine whether trading signals changed as a result of Reg FD.)
Care to give any suggestions of good european companies? I would appreciate some ideas, thanks.
Btw, tef has gotten hammered this year – is that a good company? Cheap enough yet? How do we figure this out?
From a Twitter post, June 8:
-Super Job eyeing that $GS buyer in the pit yesterday 13k contracts for $ES_F .Big Al was on him again into the close today! $$