This post is in no way to be taken as investment advice. It’s merely my observations on the dire conditions now in play.
It’s not Covid-19 that’s the challenge to a highly levered and central bank-infected market. It’s the trigger lock down and bail out (looting) policy response.
As of today, there are officially 7,174 deaths worldwide. Given the hysteria and response, one would think there were a million dead.
China, which just a few weeks ago apparently (?) was hell on earth, “mysteriously” seems to be stabilizing in the real world — exactly as predicted in the Rockefeller coronavirus simulation back in 2010.
I have been tracking indicators such as Shanghai freeway traffic as a tell. Here we see that starting last Friday road conditions were back to normal. Strange indeed.
So I increasingly believe this is all about instilling panic, looting and imposing draconian restrictions on people.
The U.K. is asking those over the age of 70 to “self-isolate” for four months.
California is asking this for those over age 65. Seven San Francisco Bay Area counties have been given orders to “shelter in place” for two weeks, including the Financial District and Silicon Valley.
Are such orders enforceable? What’s the physical or mental effect add-on effect of sitting isolated at home glued to the news? The “okay, Boomer” crowd can now clip their zero-interest Treasury coupons and bank deposits?
The immune systems of Boomers runs the gamut, with many being quite healthy. At 69, I’m in good health. Two of my parents lived to age 96, and one is still alive. There’s no way I will stay locked in my flat with spring finally arriving. My biggest risk is the belly, so I will mega dose on vitamin C and head out to join the pigeons on the empty streets and at the river and park for exercise. Is the well being of older people really being considered here?
Elsewhere, an entire population is being put at additional risk as Denmark is the first country to mandate forced untested Covid-19 vaccination.
And taking the cake is an Orwellian cartoon world plan in Israel for surveillance of their citizens’ phones “to track” coronavirus victims like “terrorists.”
Let the Next Loot Phase Begin
The current policy response will allow irresponsible companies to loot an empty U.S. Treasury. The apparatchiks are proposing a vague “stimulus” with few real details. The number and term referred to by the neuro-linguistic shadow language ops is a “bazooka” of $850 billion. In general, these are tax cuts that will be added to the already ballooning trillion-dollar deficit.
Companies like Boeing used their financial reserves in the last several years to give options to their executives and then pissed away $100 billion in inflated stock buy backs in the $300 to $400 range. This gives you a clue about why a giant stock market bubble materialized. Many companies borrowed money to do this.
This is lowest-common-denominator, kakistocratic, slash-and-burn behavior — and will be rewarded by the sistema in place. Boeing after, pissing their capital away, is right there with hand extended asking for a $60 billion bailout. Of course, the employees of Boeing will be thrown under the bus as hostages.
It’s not just Boeing. Replay this travesty across the broad spectrum.
What will now transpire is the final series of downgrades and the defacto bankruptcy of the U.S. Treasury, while the sleazy corruptos pick the winners and losers among the zombies.
Many lizard lip-licking types are scouring for the stocks with the most political gangster clout to trade during this looting process. But that’s not my style — nor do I get the insider memos.
One industry Winter Watch has discussed that the Crime Syndicate may waste funds on is the failing fracking or shale oil industry. We have addressed that before. If you invest in oil, go with the diversified, larger, well-financed, major oil companies, not super capital-intensive, high negative externality, zombie, shale oil and gas that Trump wants to “save.”
There’s also supposedly a dollar funding shortage. Don’t be confused about what this means. There’s enormous dollar-based debt globally, and the debtors are broke. They have few dollars to service the debt. Dollar funding will evaporate once the zombie debtors default and are liquidated. Thus, this short-run squeeze sending the dollar higher will end. Dollars awash in the world will flood into the U.S. domestic economy, which is already suffering from JIT (just in time) inventory difficulties. This is a classic hyper-inflationary environment when combined with Q.E. money printing.
Meanwhile, real assets and hard money are sold off to raise U.S. dollars. Additionally, assets like gold, silver, platinum and oil were — until now — too crowded with futures speculators. Until the last few days, I held none of these and was in cash — and in fact held QID, a double short of the QQQ; and SH, a short of the S&P 500. I’ve scaled out during these swoons.
But as of today, the speculators have cleared out of Dodge with these long real-asset bets. In fact, I would surmise they are net short. And at this point, my personal financial goal is to convert clown bucks into real assets that the specs have shorted. This, to my eyes, looks like a similar set up to late 2008 and late 2015, which were launch pads.
If you check the Commitment of Traders (CoT) Report, near the market close next Friday you will see this liquidation. The CoT reports Tuesday’s positioning. Scroll down the page to the March 17 report and hit “Long Format.” I mostly key on the Managed Money (MM) section. These are large speculators and hedge funds.
If we look at the silver CoT, we see that on March 10, with the price of silver (PoS) at $16.88, the MM boyz were net long about 26,700 contracts. That’s fairly average in the greater scheme of things. Silver is well under $13.00 as of now, so those net long postions are gone and may in fact be net short, possibly much so in the plumbs toward $12.00.
Silver’s problem for the bulls (in normal markets) is that the producers and merchants get aggressive with locking in price in the stronger rally phase and cap the rallies. One can only monitor this in the next phase.
I’m a radical doubter, so I do not feel comfortable recommending any vehicle. The financial sector is rife with criminals. So please don’t ask me for precise entry points or vehicles. But I’m not a stacker, and I’m not interested in keeping and dealing with wide bid-ask spread coins and bars. I use vehicles that can be traded with very narrow bid-ask spreads.
I’ve always used the Sprott physical bullion instruments for gold (PHYS) and silver (PSLV). Note that their platinum group vehicle (PSSS) is about half palladium, and I only think platinum is ready at the moment. Platinum is much more rare than gold. At $650, it’s trading at a monster $830 discount to gold. PPLT is a vehicle for this precious metal. It has a wider spread, but fills well inside.
I have some mining company speculations I use for such occasions. The miners and juniors have had severe sell offs. This is artificiality mentioned in the following Fred Hickey tweet that describes the likely cause — at least in part.
But in the real world, a $1,400 handle for gold combined with low fuel costs is a very favorable environment for the lower-cost producers in this sector. They should be reporting spectacular earnings as other sectors do quite the opposite.
Peoples’ ire shouldn’t be directed at VanEck funds(GDX, GDXJ). They’re unlevered ETFs. It’s these Direxion 2x, 3x levered ETFs(JNUG, NUGT) causing the wild distortions. They’ve caused similar collapses in miners’ stocks before. They undermine investor confidence in the group. https://t.co/vGT9ERArJd
— fred hickey (@htsfhickey) March 13, 2020