Oh, not overtly; no, of course not. But if you read the Federal Reserve’s latest H.6 Money Stocks Report, down toward the bottom of the page is this marvelous disclosure.
What this is saying is that the Fed is sloshing out cash and equivalents (M1) at a rate approaching 12% per year.
Now, let’s put on our thinking caps for a second.
Suppose you were like me and wanted like hell to make a bunch of money in the stock market. You have a pretty good idea where the “equilibrium point” is in terms of money supplies. You would look at the growth rate of the population (let’s call it 1%, and if that’s low, just tee-up another memo to Border Patrol to ramp up catch and release. And, if you need more, simply bring in unvetted people from the Middle East and pack them into every small town in ‘Merican. Step one complete.
Step 2? Well, the money supply should go by the inflation rate. Let’s call that 2.2%.
Step 3 is to print enough money to counterbalance the rampant deflation and make it seem to have disappeared. So how about 3% for that?
Last Step: Add them all up. And we may come out around 6.2% (plus or minus a cheeseburger).
Now one of those filthy, dirty secrets that we normally share with Peoplenomics.com subscribers, but in a moment of delusional optimism that the sheep will wake up, I’ll tell you that when the cash is going up 11.6% annualized, and the equilibrium point is around 6 something…well, write this down where you won’t forget it:
“The Money has to go somewhere – and some will go into stocks.”
Since we already know that ‘Everything is a business model” we can assume (with some degree of comfort) that this is the Fed putting its thumb on the election scales.
This weekend, again, on the subscriber side, we were talking about “long time-domain conspiracies.”
The idea is simple: But just to make sure you’re on the same page, let’s go through it out here in public, shall we?
Let’s say you and I hold a meeting over a beer today and tomorrow you go out and wreck a car in front of a bank, causing a distraction. While everyone is trying to rescue you, I slip into the bank and pull off a clever heist.
Point: An investigator for such a crime (that we would never commit) would have a simple time tying you and me and the cold beer at the joint next to the bank the day before, with events on the following day.
But now, let’s fiddle and diddle with events on the time domain.
We have that beer a year ago. Then pull of the same bank job.
As you might expect, the bartender has moved on. In fact, the tavern is now a thriving LBGT club, thanks to the sexual-industrialization program. No one there would give a rip about a couple of straights from a year back, would they?
And so this is how things work in real-life: Conspiracies likely happen, but when the time domain is long enough, conspiracy gets tougher to prove in a legalistic way.
Which is why this weekend’s Peoplenomics report linked events over a 20+ year period with some of the nation’s top rock-stars and topics: HAARP, Owning the Weather 2025, a former vice president, a former Illinois lawmaker who now sets fedgov climate tone, the founding of a carbon exchange, and the drive to implement a global carbon tax, which will then set the stage for (wait for it…)
But, you see, it’s all about the time domain.
Same thing with the Fed.
Obama, Biden, Yellen, et alia meet recently and a brief flurry of speculation..which quickly blows over. The charlatans who have been forecasting financial collapse scream here it comes.
Then nothing happens.
Well, except it did…and since none of the corporate media talks about how the future works, the whole thing is missed.
Unless you read the Fed H.6 report for last week.
And even then, only if you understand the systemic delays in slamming the pedal to the metal when comes to blowing up the Money Supply.
Yes. Some of that money will find its way into stocks. And yes, we blew out of our unlevered short position Friday and we’re sniping for a good place to go long.
Sell in May and go away is an old adage because it happens to work that way.
Summer rallies don’t get their due, but I smell a big ‘un coming.
And that’s because when the Fed steps on the cash…er…gas…the tired old engine that is the economy suffers from a little bit more than turbo lag. It’ll take a month, or longer, to spool up.
If you want to know what Ure’s truly doesn’t worry about much of anything anymore, it’s because crap like this comes into view with almost crystal clarity. And when it does, it’s not hard to put a few shekels in play and scrape a little side money off the table.
Could we go down a bit more to finish the trend channel? Oh, sure…next Monday or Tuesday – once we get through options – might be interesting.
But this Monday? Sit back and relax.
Janet’s got the longer play covered.
Besides, it is good economic policy to jump on the gas a bit. It potentially help the un employment rates that will roll out in November.
Again, think in the time domain.
Money begins to slosh freely now.
Business confidence improves in a month or three.
By July-August a new all-time high is almost a slam-dunk.
Which means a glorious September jobs report. But that won’t be released under October…and that will be just in time for the incumbent party to claim “We saved the economy!”
And, they will be nominally right, of course. Things will be looking peachy by this summer.
But I thought “You know, George, you really ought to mention this stuff when it’s happening so when the numbers are great this fall, you can look back and point to Janet’s thumb on the scales.”
Naw…why bother? We need the kick and besides, we have bigger problems..but again, living in the time domain is indispensable for clear-headed thinking. So let’s move on to Example #3…
China Buys America
And the absolute beauty of this is we are at another one of those time domain deals.
Here, take a headline:
Oh, my, who would have thought (except us, of course?)
And, if you read further, you will see that Chinese investment is set to double in the next five years.
What the hell gives?
Well, it’s simple: The Chinese are toning down the role of the Standing Committee of the Politburo. This will de-emphasize civilian leadership in China, and the .mils of the PLA will rotate more into the fore.
China is pulling off one of the greatest switcheroos in history: Take money from all of those Geithner bond trips, bundle and repackage, then use the dough from that to buy America out from under her. Oh, and with a growing military to help “guard” their North American assets.
You gotta be loving this, because it fits in so closely with the recent SecState babble about living in a “borderless world.”
But around here, we know what that really means it that while Ted Turner and Jane Fonda continue to amass American property, so too China is beginning to buy us out from under US.
Is it time for the TPA and TPP types (thinking Paul Ryan et al) to do anything about it?
Why hell no. He’s still trying to figure out what a Republican is.
So yes, we are hopelessly screwed. Unless, that is, you take the time now to teach your kids Madarin and Spanish – because that’s the future. And we’re passing out money to everyone to take down the American Dream.
Just so’s you know.
Why a Security Council Veto Matters
Until the US denies foreigners the right to buy property in the US, it’s a kind of game, you see.
Here, Have a Data Point
NY Fed’s Empire State Manufacturing data is just out: Read ‘Em & Sleep…
“The May 2016 Empire State Manufacturing Survey indicates that business activity declined for New York manufacturers. The headline general business conditions index turned negative, falling nineteen points to -9.0. The new orders and shipments indexes also fell below zero, pointing to a decline in both orders and shipments. Survey results indicated that inventory levels were lower and delivery times shorter. The prices paid index edged down to 16.7—a sign that moderate input price increases were continuing—and the prices received index fell below zero, suggesting a small drop in selling prices.
The market – when I looked – was trading sideways ahead of the open. Not that we care too much, yet.
Tomorrow is a much more worthy morning to look forward to. That’s because we get some housing numbers and Consumer Prices. Then a market reaction, options close out, and we get to move along with our next trades if nothing changes.
No, there is nothing wrong with playing stocks if you’re “taking from the man” instead of “being the man…”
I absolutely loved this Google news snip this morning:
“From United Kingdom: Donald Trump might kill the ‘special relationship’. That’s no laughing matter for Britain,”
Well, actually, it IS a laughing matter.
That’s because us dumb colonials remember that Hill and Obama are screaming at every chance how bad a BREXIT (Brits sober up and leave EU before it implodes) would be.
So, while the democorp in chief goes over and munchies crumpets with the royals, the working man in ‘Merica can safely blow out any fears of our “special” relationship with the UK being in trouble.
We did, near as I can recall, save their sorry asses not once (WW I) but twice (WW II) and maybe a third time if we count the backroom financial stuff we’ve done. So yeah, more usless bs for the sheep, but for thinking people? Naw…we’s too smart for that, I’m afraid.
But then again, Obama got two terms…wait, maybe we aren’t so smart after all…