Gold Stocks, Inflation, the End of America, and a Very Dark Future

 

 

 

Trader Scott’s Market Blog

October 18, 2016

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Stewart Thomson does a weekly post at 321gold. Today’s postis another good one from Stewart. We certainly employ charts in very different manners, but we agree on most everything else. Stewart believes inflation (more below) is in the process of putting in a massive, secular low and also thinks gold stocks will be a fabulous investment, especiallyin 2017 and for many, many years. He also thinks“Make America Great Again”(more below)is inane, as do I. We are long past the time of solving both our nation’s (the US) and all of the West’s horrific imbalances. It can not be done. We missed our numerous chances to ameliorate our vast problems. It’s why for whomever you’re rooting to win the US election, it is a be careful what you wish for scenario. If Hillary gets in there, she will get what’s due her in one way or another. The Bond market will make sure of that outcome. The global Government Bond market is going to destroy us all. At this level of both total net debt and total derivatives, nothing can be done anymore. And wars are going to become more frequent – as our compassionate, unselfish leaders use the wars as a reason/excuse/justification for the horrible economic conditions, which they and theirs caused to begin with. And far from being worried about “global warming”, I’m very concerned about global coolingand famine. So for all of this – it is a great overall environment for the four markets which I believe have incredible growth/profit opportunities – mining stocks, agriculture, and, down the road, the Chinese and Indian stock markets.

As to inflation, Stewart believes the rising interest rates will cause the inflation, not visa versa – I concur, from September 2015: “Also, to repeat for the umpteenth time, it’s the INCREASING rates which will finally bring on the inflation and that inflation starts next year.” The rising inflation we have in store for us will likely have a symbiotic relationship with the slowly, but persistently collapsing Government Bond markets (prices). And in regards to the Bond market,President Ronald Reagan first used the slogan “Make America Great Again”.Buthis slogan had a humongous amount of juice and power behind it because we were just coming off of a devastating 35 year Bond bear market. That bear market ended on Oct. 26, 1981, when long term interest rates peaked at 15.21%. So under Reagan, we were about to embark upon the biggest debt issuing orgy we’d ever seen and it is still ongoing. But back then we were still getting net new growth from each new dollar of debt. Now we are so inundated with debt that some countries are getting negative growth from the debt issuance. The world is saturated in debt. Now it is just piled on top of each other like a stinking, rotting massive garbage dump. But even the colossal Reagan/Greenspan Social Security tax increase couldn’t slow down the economy much, because of the power of that debt issuance orgy which was just in the early stages of this current post gold convertibility era. The Bond market had President Reagan’s back. Now we’ve been in a falling/low interest rate environment for 35 years. So either President Trump or President Clinton will have the exact reverse situation and there is nothing that they can do about it. The Bond market is going to win. And I keep asking this same question- are you prepared?

 

 

About

img_0074bwcrsmTrader Scott has been involved with markets for over twenty years. Initially he was an individual floor trader and member of the Midwest Stock Exchange, which then led to a much better opportunity at the Chicago Board Options Exchange. By his early 30’s, he had become very successful in markets, but a health situation caused him to back away from the grind of being a full time floor trader. During this time away from markets, Scott was completely focused on educating himself about true overall health and natural healing which remains a passion to this day.Scott returned to markets over fifteen years ago where he continues as an independent trader.

 



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'Trader Scott’s Market Blog – Gold Stocks, Inflation, the End of America, and a Very Dark Future – October 18, 2016' have 4 comments

  1. October 20, 2016 @ 3:47 am Aamer

    Hi Scott,

    Would love to have your thoughts on the India / China entry point. We all know the investment reasons to be involved….but India in particular seems to be the flavour of the past 2 years for everyone…it’s a very consensual long .Makes me weary….China , on the other hand is much hated esp. by the HF community and media puppets….which makes me interested in the mkt.

    The big daddy of course are the bond mkts….and when to short them. I would have thought that EU bond mkts and Japan might be a good place to start……any thoughts ?

    Thank you,

    Aamer

    Reply

    • October 20, 2016 @ 10:23 pm traderscott

      Yes I’m wildly bullish on both China and India LONG TERM, but I’m not remotely bullish on any stock market now. The earliest would be next spring, but the more “they” attempt to hold things up, the longer and bigger the selloff that will be needed to “reset” stock markets. Yes, currently a lot of folks love India, but give it some time. It’s amazing how quickly sentiment can change with falling prices. And yes China is putting in a huge area of accumulation, but I’m not remotely close to buying. And bonds, they’ll all generally be topping (maybe have topped already, but they still have some chances to rally next month). The difference will be the rate of descent, and Europe and Japan are in worse shape.

      Reply

  2. November 13, 2016 @ 7:41 am MQB

    Great Post Scott

    Reply


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