Weakening Earnings, Slowing Manufacturing, No Trade Deal = Record Equities

[biglentil]

You would think that Errol would be a gold bug based on his predictions for the market.

[Oliver88]

Techanalyst, Errol, Biglentil

What stocks are you guys currently investing in or shorting? Land, real estate? Gold?

[TechAnalyst]

Techanalyst, Errol, Biglentil

What stocks are you guys currently investing in or shorting? Land, real estate? Gold?

That's probably more information than what I feel comfortable discussing on a public forum but to reassure everyone that I have no motivations here other than to try to be helpful - I am short nothing, I own farmland and I have no position in gold (so far).

[errolanderson]

I keep hearing various versions of this, that central banks are helpless against deflation.
Can someone explain the logic behind that?

As far as I can tell, they have very few tools to stop runaway inflation, once confidence in the government and currency has been lost, as evidenced by the myriad examples of collapse due to hyperinflation throughout recorded history.

But flooding the market with stimulus of various sorts or devaluing currency to combat deflation has been the go to tool for as long as there have been currencies. The long term results are never good, but the dreaded debt deflation spiral just doesn't seem to materialize.

Keynesian economics has always been the the foundation of central bank policy. Let inflation hide the impact of debt and wreck less debt and spending. But that all fell through-the-cracks. Inflation pressures evaporated as debt became unserviceable. But central bankers had faith. Start the printing presses, but with little or no response. Well, let’s cut interest rates, that will do ‘er. That didn’t really work either. Deflation, a word that wasn’t heard of in financial circles was taking hold, with no solution.

This is why I’m negative gold market as gold feeds off inflation. Central bankers are very lost puppies right now. To have the market enter negative rates just shows how Keynesian economics is failing now miserably . . .yet that was all I was taught in economics school is print your money to continue party time. Inflation will fix everything.

Now the value of U.S. equities value is now more than 150% of U.S. annual GDP. Money is simply being parked in stock markets at incredible valuations, at incredible risk and at incredible blind investor faith.

[SASKFARMER]

I do agree with the fact a lot of money is parked in the stock market. It has made wealthy people billionaires and average joe investor have a million.

Now property was an interesting thing the last crash of 08, but that market and those homes were filled and picked up by Canadians and American investors and individuals. Maricopa is a prime example. The ones who borrowed and have VRBO to pay for these could be in for a double-take if the Housing market crashes.

Similar large debt still on Farmland won't work either. IMHO.

Similar most homes in Cities are so highly leveraged not even funny. Toronto would be a wipeout similar to Vancouver.

I gave an example a few days ago about buying an apartment block. The banks want clear property equal to the amount you are borrowing and you cant sell any of it.

But the question is will we have a world reset and that's what the UN is doing to try to create one world Gov. Trudeau has helped by making Canada vulnerable.

The USA is not going to give up its place for the UN until the last American is dead.

Canada will fold like a cheap hooker.

[TechAnalyst]

The reason I feel it’s so important to consider a chart is there is no way possible for any individual or entity to know every fundamental factor impacting a given market let alone how or if it would move prices. On the other hand, a price chart shows the net effect of all the influences and opinions combined.

This is the monthly continuation gold chart (each bar is the high/low/close for the month). You can clearly see the impact of the Quantitative Easing programs designed to inject liquidity (money) following the financial crisis of ’08.

Following a correction that was long overdue, a large saucer has been developing as buyers become increasingly aggressive while sellers do the opposite. The net result is higher highs and higher lows again. A typical saucer formation begins to accelerate to the upside as the price action begins to attract more aggressive behaviour.

I expect that will be the case here as well given the strong gold buying by central banks over the last few years and the declining confidence in world currencies. Should the stock market end up in trouble over another debt crisis, increased liquidity would add to the acceleration as it did a decade ago (IMO).

[errolanderson]

The market doesn’t seem to believe in agreement purchase totals . . . . China (Xi translated speech) stated they will purchase U.S. agricultural products based on market conditions.

Soybeans tanked after Phase one deal signing . . . . Traders now appear selling-the-fact.

Algorithms continue to power stock markets to historic highs . . . .