In Case You Missed the Memo

The hints have been all over this site for a while: My Friday morning memo began “Ready for a Rally?” and yea, verily, this morning the Dow futures are up 200 and my position in SSO was up 2.39% in the extended hours session overnight.

Meantime, a skeptical (and I can’t blame him) reader sent in a comment about all these “experts” who are saying the end is nigh. I explained it’s not really fair to line up a list of experts, as it’s hardly a fair match-up, since they are going against a lone nutter in the woods…

But, you see, they are all missing the point (and missing Peoplenomics, I might add).

The game that is in place right now – this very instant – is to pump up the money supply so that the market will have to go up. I borrowed this little snip- from the Fed’s current H.6 money stocks report.

You do see what it says for M1 inflation for the most recent periods?


Meantime, the Velocity of Money at M2 has collapsed (see chart over here) which is why a gallon of milk isn’t $9 bucks….yet.

I am screaming at the top of my lungs that “This will leak into the stock market, dummy!

No two ways about it: You can’t stick your foot into the monetary carburetor and not have something happen in the market. This is precisely what we will have a marvelous run at new highs over the balance of the summer.

The way this should work out, we should begin to see the roll from long term bond positions into stocks. That’s because when you have oodles of money, it tends to bring with it, the scent of INFLATION. And nothing scares the bond weenies more than what? (Inflation!)

The reason for this is perfectly logical: The interest payment on a 2% bond is a hallelujah glorius thing when the prevailing bank interest rate is 0.025%. But what happens when the USA economy, already moving up 2.2% moves to 2.5% or even higher?

In that circumstance, the following events must occur because of how systemic linkages work.

Real things will go up in price. Examples this morning? Oil. Coming: Beans, Home prices will firm. Rents will rise shortly.

Bond prices will decline because interest rates are right now, this very instant, likely putting in a long-term double bottom. We are due for a small bounce because of the election…then we should get one more bite of the apple going into the greater depression of 2017-2018.

As the stock market begins to scream, shades of 1929, we will have a stock bubble develop.

I Love bubbles. Remember when I green-lighted Bitcoins down in the $300 area? Wave movements are predictable. Bitcoin is kissing $750 this morning. I think it could double from here…depending on your appetite for risk.

A while back, I built a simple tool for Peoplenomics readers….a simple spreadsheet into which you can put your first Elliott wave move, and it will then tell you where things should go next.

It is not perfect, but think about the lows in February and then think about the highs in May, wasn’t it?

That is your Elliott 1 up. Since then, we have been in an Elliott 2 down. I expect the bottom (for now) is in because in the larger context, we are in a IV. When you are in a large IV, you can go back to the large II and see how the wave action worked. Since Wave II was a five-waves advance, when II is a five, IV is usually a three wave deal…oh, and did I mention that’s done? We should be going much higher from here, I believe. This is NOT FINANCIAL ADVICE, I’m just telling you how I print up money on demand.

So yes, I’m “in the money” on my latest (modest) trade (SSO) as soon as the twanger goes off in New York. Made money in our Wave IV short using DOG, too. But from now through the rest of this week, I’m patiently on the long side, because when a bunch of “experts” start telling me the world is about to end, I fade the noise and look at the Fed data asking “How could they all be so dumb?

Inflation – the magic wand of liquidity -has been waved by Janet Yellen. I told you before it is effectively the Fed endorsing Hillary Clinton.

Yet most average people won’t or can’t see it…which is fine because if there are enough average people around, being only slightly better than average is one hell of a profitable place to be.

So stocks are going up: You will maybe make a little money, but the prices of goods will follow along, too so be sure to set some dough aside for Uncle. Our short-term trading techniques generally miss long-term gain requirements, but it’s not a bad thing to pay short-term gains. In fact, I wake up every morning praying that we’ll be able to pay even more income tax because for every dollar I pay, I get to keep two.

There. You have the memo.

“Shall Not be Infringed”

Dummycrats and old repugnants will be arguing this week about gun control. Nothing will happen, so drop by for the next mass gun attack in, oh, about October, or so…just in time to press guns into the ballot decision. We seem to get such violence about once every four months, or so.

The Weather Stories Do Matter

The weather is hotter than blazes, except where the blazes are hotter, which brings us to a discussion of California fires that are still growing.

Across the southwest, heat records are falling, one after another. More details over here.

Yes, it could be global warming, or it could be the weather war that’s ongoing. (scroll down to the weather war heaters map to see where they are)

The real deal point for humans is governments are going to shake-down humans in order to save the global economy and higher food prices means more control for those who claim to “own the land.”

Which is government. Try not paying property taxes for a few years, if you doubt me. Watch soybean prices. Research how soy products make populations easier to control, too.

Meantime, I keep thinking about an interesting weather trade: Buy a home in Phoenix when it’s 120…sell to a wannabe snow-birder in about November after the first snows up north.

Another Hillary Personality Expose’

Here we go again:

EXCLUSIVE: Hillary Clinton once called disabled children at an Easter egg hunt ‘f***ing ree-tards’ and referred to Jews as ‘stupid k***s’ while Bill called Jesse Jackson a ‘damned n****r,’ claims Bill’s former lover…”

More in the book Hillary the Other Woman.

Meantime, 25% of voters are reported undecided.  I’ll leave it to you to pencil out how many of our countrypersons are stupid.

Evidence Tampering?

Isn’t that what you call it when the US Attorney General decides not to include the words  Islamic terrorism removed?

Once again, the government has gone crazier on political correctness trumping factual accuracy.  Which is just another reason America is deeply deluded and troubled,…

Still More Distractions

The Brits are having a day of mourning for the recently killed MP.  This, ahead of the BREXIT vote Thursday.

Well, there you have it: The world is no more sane today than when we knocked off Friday


In Case You Missed the Memo — 13 Comments

  1. “How could they all be so dumb?”

    You’re probably prejudiced on account of the stock market, perhaps? I would have voted to have hanged ‘Greenspam’ a long time ago, to just set an example for the treatment of traitors. JMHO!!

  2. Maintain a C.Y.A while the joker in in play. Do not know how it will turn out but do know it will be messy.

  3. Lol , they don’t stand a chance ,against the lone nutter in the woods,and also our solar system wars ,plus u.s. prices have to rise in order to compete globally,I am betting that the tomatoes that I have will start turning red in 1 – 2 weeks at a rate of 2 a day, that I can eat or put in the ever running small crockpot, but what really like is how you print up money on demand ,lol, about the heat ,I thought of buying a bigger air conditioner,but instead I decided to raise the fan from level low to level medium,okay when iam stuck in the mud you can probably sell me a 4 wheel drive Jeep, with 2 mules pulling front the front , have s good day and enjoy. ,why not , iam going to have a wonderful day

    • Growing vegetables is the ages-old method of printing money. If you can eat from a garden for a few days, you save on a lot of groceries. Plus, you keep your money that you might spend.

      Had a bad spring here. Late frosts killed all Apple tree buds and I will have maybe 1 bushel max. The good standby still growing are Asian Pears. Those suckers are strong-willed. Regular garden is doing great and my goal is to whip up bottles of hot sauces this year. Friend of mine runs a hot sauce store and sells little bottles for $6-7 each. If I can figure out a recipe, the garden can actually pay off (since I normally spend $40+ visiting his store once or twice a year).

      Every home should have at least a 100 sq ft dedicated to a garden. We have a 2000 sq ft garden, four apple trees, three asian pears and a couple of dud plum trees. Time to put the ground to good use and I want to plow up another 2000-3000 sq ft and grow corn and actually would like to try my hand at wheat and flax. Amish neighbors get me excited in how wonderful their house gardens look. I just wish I had their piles of gold. Manure, that is. That is how they can grow so much so easily.

        This is a long video about 5 hours last night I watched about 2 and one half hrs of it , it has more answers than I have questions momentarily ,which rare,so there is a thing called GARDEN of Eden ,it’s just that most everything we have been taught is a lie, watch part of it an you will wish your parents knew it and past it down to you,,

  4. I love selling puts in this market…

    For those of you who don’t know what that is, I won’t elaborate (don’t have a Series 7). But it basically says that I would buy stock at prices below today’s or tomorrow’s level. And it collects money from someone else who is buying protective puts on their stocks, although it is usually an options algorithmic system at companies like Susquahanna and Citadel.

    What comes next, who knows. I also don’t trust the markets. And I know I am missing out in buying more stocks (about 35% cash right now). But all the while, selling puts is a nice alternative to just sitting and doing nothing. Pays for dog food and other essential purchases.

      • Been a reader/listener a long time. I’m trained well. Also, chatter about Brexit has me thinking of a weaker dollar, strength in oil to come (ie. 70-80) and wondering if I should put that cash to use. Oil should go up at a faster clip than gold/silver for a little while. So much for the market not being rigged. All started with John Kerry visiting SA back in fall of 2014. We all should have been watching that very carefully. Some who “sensed it” made a fortune, I’m sure. I have even heard rumors of a certain bank handling options put buying for the SA folks at that point.

        After staring at graphs and watching trends hit and stick to trend lines and channels for a couple years all I get out of it is “yep, market is rigged and algorithmic trading is about 90% of everything”. Now, how to really cash in? Must make trades at key inflection points and commit.

        You’re points about currency devaluation leads me to believe that strong markets only go up long-term and eat the lunch of smaller markets (Russia via oil pricing, S. America, Japan and others).

  5. George, It is an insane world

    Two longstanding questions:
    Why does everyone say Democratic Party? “Democrat”
    Why are most election results, people and parties, around 5% or 6% of the 50% mark?

    Any ideas, please??