π¨ MARKET UPDATE π¨ From your neighborhood ππ»
Since mid March, equity markets have rallied hard with drastic action taken by the FED. While stocks are wildly disconnected from reality in terms of valuations, they represent the market looking for yield with negative yielding bonds and higher inflation expectations. Inflation (especially high inflation) itself however is not good for stocks as it is destroying the value of the earnings of many companies, while reducing revenue from consumers who can no longer afford the products. To sustain current market levels, additional FED action will be required including things like direct buying of stocks. This will make gold & silver go balastic ππ. Alternatively the FED can stop additional QE and liquidity injections, however this will cause a market crash, potentially leading to a full economic collapse as the faith in the FED is the only supports below this market. The FED knows this, and will likely keep making the money printer go Brrrrr, until we start seeing high inflation (and we will see it, unlike after 08). At that point the FED will either have to let interest rates run sky high to reel in the inflation, or they can let inflation run out of control (potentially turning into hyperinflation). Neither are good options, but the FED is in a tight corner. High interest rates will kill many overleveraged business and individuals that depend on cheap money. It'll also kill real estate prices (in real money terms) as the average American needs to borrow most of the money to buy a house. High inflation is particularly bad for those on a fixed income (elderly) who have mostly dollars and won't have income that can be adjusted by inflation.
TL;DR: Buy Gold (and silver). Sell Stocks. Gold/silver/miners are still on the launching pad.
Timeline of (bearish) posts since Jan. 29:
I've been invested for the Market Crash since Jan 29, AMA (Investments & Money)
https://us.teamblind.com/s/E2j8RmHh
I've been invested for the Market Crash since Jan 29, AMA
comments
It is "TC or GTFO"
The real loser in inflation is bonds. You got negative real yield.
I think Fed will just let inflation runs to inflate away all the debts. That is their plan all along.
As long as we don't have hyper inflation, 5-10% inflation with zero percent interest rate is the Fed's secret agenda to solve the debt problem.