It’s Not the Election Sideshow, the Real Disaster is the Banking System
Trader Scott’s Market Blog
November 2, 2016
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Of course it’s understandable why the election is such a big focus. But the election will come and go – and the massive problems which the world is facing aren’t going to improve, no matter whom we elect in America. All of our problems on this planet are tied to debt, intertwined with derivatives. The world is now literally incapable of generating net growth, it’s just too late. We’ve had many chances to turn things around over the past few decades, but the globalists wanted nothing to do with the tough policies/ideas/efforts which could have improved conditions for the masses. Policies like massive across the board tax cuts (simpler, flatter tax rates), massive across the board cuts in government (outright closing/eliminating government departments), and downsizing of the “Department of War”, would have helped right the ship. Other policies should have included allowing true capitalism to work as intended – meaning allowing failure and its’ cleansing power to occur. And in that vein, we come to the point of this post – the crooked/dishonest/disgusting relationship between hedge funds, oops I mean, Central Banks, and also Governments and the International behemoth Banks, which has been a major reason for the destruction of (and the inability to repair) the world economy.
So now whoever is the next President can only make things less worse (at best). And yes, of course, the election’s aftermath is going to be a total mess. But that is small in relation to the disaster sitting on the International Bank’s “balance sheets”, in the form of their derivatives books. The amount at this point is basically unfathomable and it keeps growing larger. And it’s the European bank’s problems which are sitting right in front of us. I do believe there has been a concerted effort to continue the propping up process until after the US election. And that time is almost here, and I am beginning to focus much more on the banking situation. As I’ve been continually stating, in November of 2016, gold is very likely to have its’ best buying opportunity since the $1043 low last December – when I recommended purchase, especially the miners. And this upcoming low should be a retest of last December’s low, but at a much higher level. It would be no coincidence if the strong hands/”manipulators” wanted gold lower later in November to be able to accumulate gold right before some banking blowups. Very possible. No matter the reason, gold is in a major bull market and bigger selloffs are “gifts”. We need to take advantage of them.
The point of this blog is to give a “heads up”, so that we can anticipate market opportunities well in advance. And it’s time to refocus on the banks. Most in the financial media are focused on Deutsche Bank, as Angela Merkel claims they won’t get “bailed out”. The markets will force her to change her mind. DB will get “bailed out”. It’s some of the lesser well known banks which are the scariest. Switzerland’s Credit Suisse is one of them. The constituency to get them “bailed out” is not nearly as powerful. They are going to be a big problem. Or it could be Italy’s UniCredit, whose demise could infect the bigger banks who hold the humongous derivatives exposure. The election and other matters have put the massive problems at the banks on the back burner. And it has certainly helped to have the rally in the banking shares since the September lows. But forgetting about them would be a mistake. They are about to become headline news again, regardless of the election outcome.
Trader 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.
November 3, 2016 @ 1:03 pm Aamer
How can one play a short trade around this problem you have identified ? Not much left to do on DB and it’s too risky…..but maybe Swiss bank shorts ? UBS! CS?……maybe the US banks ?
Would be great to look into a trading strategy that can capture this opportunity.
November 3, 2016 @ 10:38 pm traderscott
Aamer it just goes back in and is intertwined with being extremely bullish on gold and the US$. I will continue to use weakness to buy both, especially miners. So this strategy is way “easier” for me to understand. Shorting is never for sitting for me. Often, it’s better to take an alternative view.
November 13, 2016 @ 4:56 am MQB
Great Post Scott. The Donald was clearly the less worse option. And out of the ashes something beautiful may arise. Or as they say say ordo ab chao ;-) All relative as we know. As u say gonna be painful though in the short to medium term we thinks. Also am sure the slight perversity of the $ being somewhat of a safe haven. Until it isn’t that is ;-) If only we could get out hands on some of those Special Drawing Rights ;-)
November 13, 2016 @ 11:58 am traderscott
For years people have questioned my bullishness on the US$ (warts and all), but it just keeps going up. And exactly, everything in markets is until it isn’t.