As always, we don’t offer financial advice, although if you’re a bull (one who expects stocks to go up) this might be an interesting week. Part of a financial “education.”
I referred to this (possible) timing of markets back in December when I suggested barf bags and seat-backs locked around January 10. As should be clear, that was off by several days.
Why? Likely because in my work (new, odd, and crazy ways of looking at things) there are no book references to things like vacations, holiday closures, partial-day trading session impacts on experimental oscillators, and oh, yeah – A FEDERAL GOVERNMENT SHUTDOWN.
Still, at least for a few minutes this morning things could be rocky for the bulls. We’ll discuss Bullwinkle’s whereabouts tomorrow.
Global economics is in a terrible pickle: China has just posted some biggest-ever trade numbers with the USA which is presently running of fumes due to the shutdown. A whole host of economic data sets, including things like the trade balance and what-not, have been stalled from release.
This will “double-up” in importance later this week when retail sales figures were supposed to be reported. Now? It’s anyone’s guess. IAFG.
Whether I’d even get out of bed to kick this around with you today was a matter of some debate. On one shoulder was a financial angle kept whispering in my ear “People need to know and you have a fine sense of humor in the face of the looming long-term disaster…”
While that angel was referring to our miserable economy ahead in 2020 which the democrats and socialists will use to sweep a fresh FDR Spend-o-crat into office, the devil on my other shoulder was screaming “It don’t matter. Hell, be more like the democrats who are so concerned about the shutdown that they hit the beaches in Puerto Rico this weekend…” Yeah, there is that…
Like most bought-and-paid for politicians – a disease that strikes both sides of the aisle – the partycrats brought along 109 lobbyists to foot the bill which is how “soft payoffs” work to our way of thinking.
My “shoulder discourse” was going on at 2:30 AM, but it was loud enough that I got up, put on a pot of coffee and started research for Wednesday’s Peoplenomics report. Did you know there are 71 references in the Bible to “crowns?” Can’t even begin to get into what we wandered through between 3 AM to now (a few minutes before 5 AM) as I started writing this.
With no breaking news due and the government sort of shut down, life is a lot more predictable. Save Acts of God and Crazies, of course, I can go back to bed.
A few thoughts on gold before I go back to non-destructive pillow-testing:
You (should) already know that the US government may not call gold when Depression II becomes obvious (who owns gold, right?). We do read some mystical profit-sees in the headline that “Newmont to buy Goldcorp in $10 billion all-stock deal.”
The way we figure it, an acquisition like this in the gold sector tends to slap down the argument that Gold is a yeller dog. Someone;s buying.
Since I have lots of time to write, I worked on prices paid for things in 2001. Say you found bread on sale 3 loaves for $5 back then. Today, three loaves would run you a few pennies less than $8 bucks. The 2001 to 2018 multiplier for general goods is about 1.594,
I know for a fact that gold was selling for $273.50 in September of 2001 because we bought some. For gold to “break even” it needs to sell, for $435.96. 2001 price times the multiplier.
If you find it priced that low, send me a note and keep your mouth shut because its retailing in the $1,295 region this morning which is 859.04 of profit.
Now, it just so happens that in 2001 we were living on our sailboat at South San Francisco (Oyster Point Yacht Club members, too, lol) I was already jotting down market numbers. Columnists keep notes and because in long economic waves, what comes around has usually been around.
Since 2001, how much has the price of gold gone up? About 4.73491773308958 times.,
I wrote down the September 7, 2001 closing numbers, so let’s talk about here’s where the major indices SHOULD BE TRADING TODAY in order to have kept up with gold:
The Dow had closed at 9,605.85. To have kept up with gold, the Dow would need to open this morning where? (More than four times higher!) 45,482.90. Based on the futures, the Dow is likely to open around 23,746. Looks to stupid old me like Gold outperformed the Dow by a factor of almost 2!
If this is still too painful to bear, consider the S&P 500. September 2001 it was running 1,085.78. Which means to have kept up with Gold it needs to trade where today? Try 5,141.98. Reality is that we will be lucky to float over 2,570 today. Again, factor near 2.
And the NASDAQ Compost? Back on our September 2001 date it was running 1,687.70. Which means to have kept up with gold, the NASDAQ Composite ought to be where? 7,991.12. Instead we will be lucky not to drop to 6,926 today.
Is there a lesson from Ure in all of this? I mean besides some very happy long-term Peoplenomics readers who (here and there) also bought one lone gold coin just so they could they could say they got things right?
Well, let’s see:
The first generalization is that we won (percentage wise) based on the fact that government has to water down the purchasing power of the “dollar.”
By making up a bit more money – year after year than is justified by economic growth – to paper over the soaring federal debt, the money’s purchasing power is watered-down and no one can figure out how “If times are so good, why ain’t my family getting ahead?”
This is what the financial industry doesn’t talk much about. While we only present a small sample here, it’s one of those consciously made asset allocations. We trust things ahead of paper (made-up) money.
That’s why we tell anyone who will listen: Rural and sustainable is where the future’s going. And hot on its heels are disappearing goods. Oil,. solar, wind, and staying clear to most people. Thoughtless sheep willing to whine about work but not do much of it.
Independence is not just in thought. It’s enshrined in our Constitution. And the people who don’t read that (Because they are too busy in Puerto Rico?) have no business pretending to “lead.” Likely shouldn’t vote, either.
Second key lesson: Tech despite the washout has been the hot long-term ticket. Which is why – when we bemoan the lack of innovation – it isn’t just because we like new bling. It’s because innovative products power the future of the whole world.
Third lesson? Tech did pretty well – better than the more staid indexes.
Fourth: This is a report not a recommendation. Lightning tends to hit just one place and move on, lol.
Might sound like I got up on the wrong side of bed and have morphed into a GoM (grumpy old man) but as you can infer, it’s supported by lots of data,
And, my-oh-my…ain’t that a bitch?
Since we are wildly egalitarian by nature, seeing that California prohibits gender-based auto insurance: report makes sense. I mean much as anything does out there.
Say, here’s a headline we might have written: Alexandria Ocasio-Cortez, the voice of an ignorant generation.
And here’s one lucky federal worker: Wife of federal worker wins the lottery amid shutdown crisis.
The European socialists just can give the Brits their freedom as Theresa May says no Brexit more likely than no deal. “Deal?” Like when the people spoke on this years ago…I mean WTF?
And just when we thought there was hope for the world, An Egg Has Beaten Kylie Jenner’s Record for the Most Liked Photo on Instagram.
Yeah…back to bed. I’ll get up if sanity breaks out.
Moron the ‘morrow…