MAGAizing The Markets. Gold and Especially Silver Remain THE BEST LONG-TERM TRADES ON EARTH. By Gregory Mannarino
MAGAizing The Markets.
Gold and Especially Silver Remain THE BEST LONG-TERM TRADES ON EARTH.
By Gregory Mannarino Traderschoice.net
Now that the Presidential Selection has been made, Wall Street, (especially MEGA Banks), corporate insiders, investors, traders, and the global cryptocurrency markets are simply WAY BEYOND ECSTATIC! (Perhaps MEGA banks should now be called MAGA banks?)
What happened last week was THE ABSOLUTE BEST POSSIBLE OUTCOME for the 1 and 2 percenters, the Elite, the “money changers” (MAGA BANKS), and of course- the Federal Reserve. (Is it really just an accident or by chance that it turned out that way?) Of course it is, right?
Stock market history was made.
Never before in the entire history of the financial marketplace, has the US stock market reacted more positively to an “election.” Every major stock market index, from the Dow Jones Industrial Average to the S&P 500, the NASDAQ, with each hyper-vaulting higher.
Moreover, the MEGA/MAGA rally in stocks continued throughout the rest of the week propelling the broader market to its 50th record high of the year.
In the following 3 days after Trump’s selection, the US stock market realized RECORD HIGH CASH INFLOWS. Which is an indication that the stock market has the potential to run even higher, (potentially much higher).
Cryptocurrency markets TOOK OFF! With Bitcoin hitting NEW record highs.
Following the selection, Trump DOUBLED DOWN on his promise to crypto investors by stating that he intends to make “The US The Crypto Capital of The World.” (Trump is planning to make cryptocurrencies (plural), a part of the US strategic stockpile).
***Question: why not add more gold to the US strategic stockpile? (The current value of the US gold stockpile is A PATHETIC 628 billion dollars, which is about the same value/market cap as Walmart) … how is that even possible? Go ahead, make it up.
***Answer: by adding more gold to the US strategic stockpile, this would run counter to the Fed’s plan to continue to bankrupt America, so to fulfill their goal to be both the lender and buyer of last resort. Prior to the selection I said specifically AND REPEATEDLY, that the Fed. would get an ally to sit behind The Resolute Desk, a person who would assist the Fed. in fulfilling its century old plan to OWN IT ALL. (Well… read on).
Why did the stock market want Trump?
Trump is a proponent of ZERO and even negative rates. During his last tenure, Trump called the Fed. “Boneheads” for not implementing zero or even negative rates. Currently the Federal Reserve, along with other central banks who are working in concert, are now in the process of cutting rates, (a process which is responsible for destroying the purchasing power of their currencies). A zero/negative rate environment (although massively destructive to the economy), would VAULT the stock market even higher.
Trump wants deregulation/less restraint on the banks.
In April of this year Republicans united to strike down ANY new regulations on banks. Also, regarding regulation, Trump promised the crypto markets that he would also deregulate/prevent regulation. This past week, MEGA/MAGA? bank stocks SKYROCKETED across the board in a record rally across the entire sector. (Along with cryptocurrencies).
Interesting factoid. (Not 48 hours after the selection, the SEC is already looking to roll back regulations on banks and crypto). Not even 48 hours later? I don’t know about you, but something with that just feels “off.” It is almost as if they already knew what the outcome of the selection would be... Is that possible? Or no, there is just no way that the SEC could have possibly known who would be selected. Right?
So, what’s next?
Trump’s selection has put several new dynamics into play.
Expect the current stock market multiples expansion cycle to accelerate and continue. This mechanism/euphoria will be responsible for inflating a much bigger/fatter stock market hyper-bubble.
Bank deregulation. After We the People were forced to BAIL OUT the banks during the “Financial Crisis,” regulations were put in place to prevent that from happening again. These regulations WILL BE ROLLED BACK. Expect investment banks to again engage in WILD speculative trades, especially in the derivatives markets. Potentially rolling back regulations can be VERY profitable for banks- but it also opens the door for more public bailouts IF these banks make bad/questionable bets. (Which they certainly will).
Potential for negative rates. There are ONLY TWO fundamental truths in economics and finance. One- to have a strong economy you need a strong currency. And two, to have a strong currency you need a corresponding rate of interest high enough to support the purchasing power of the currency. Today, these two fundamental truths have been turned UPSIDE DOWN, and in doing so they become an economic WRECKING BALL… However, by flipping these two fundamental truths, they then become MASSIVELY stock market positive. What we can all be certain of is again, for as far as the eye can see and beyond, artificially suppressed rates and obviously therefore a weaker currency/loss of purchasing power.
A lower standard of living for the middle class. All MAGA will turn out to be is a continued mechanism as to push wealth UP the food chain, faster. Here, the people of the US and the world continue to be sold an EPIC LIE, and that is BY MAKING THE RICH RICHER WE ALL DO BETTER. Really? How is that working out for you? Because it is this very mechanism which had led to the current economic disaster area-WORLDWIDE! As every single so-called developed nation on Earth are each DEEPLY entrenched in what is known as “trickle down” economics.
GLOBAL DEBT/US DEBT WILL CONTINUE TO SKYROCKET. Today the US debt to GDP ratio stands at 122%. Moreover, the global debt to GDP ratio stands at 333%. These numbers are staggering and irrecoverable. Here, we can make an easy connection. As global debt SURGES ever higher, so do world stock markets. MASSIVE DEBT CREATION, and artificially suppressed rates, continue to drive cash into risk assets. This mechanism will continue, faster, right up to the bursting of the debt market HYPER-bubble.
CASH SEEKS YIELD. What this means is by “MAGAizing” the stock market, banks, and the crypto markets will outperform, while commodities will underperform. However, it also means that commodities across the board will be even MORE ONSALE. By cash seeking yield and MAGAizing the markets, the game will remain Risk-On, meaning that cash will flow disproportionately into risk assets/stocks, and cryptocurrencies. Moreover, global debt will also HYPER-BALLOON. The hyper-ballooning of world debt will accelerate, further and faster. (And this situation would have occurred regardless of who was selected as Puppet, I mean President).
Understanding that gold and silver ARE anti-debt units and will be ON-SALE for the foreseeable future, right up until the bursting of the world debt bubble, HERE, with gold and silver being more on-sale than ever before relative to virtually every other asset class due to the current dynamics in play, we have been given a gift.