The Fed doesn’t have a pile of cash sitting in the vault. It just creates money out of thin air.
‘Nobody knows anything,’ may be Gospel Truth. But it doesn’t tell you what movie to watch or what stock to buy.
When the economy is healthy and growing, people buy stocks and the index generally goes up. When it is fearful and correcting its mistakes, they buy gold and the index goes down.
Markets, economies, and even empires move in great, long-term swings. Sometimes they are forward-looking and expansive. Sometimes they retreat…
You could buy the Dow with 40 ounces of gold in January 2000. By January 2011, the Dow 30 stocks would cost you only 8 ounces.
Stocks couldn’t decide where to go yesterday. Up? Down? So, they went nowhere. Nowhere is about as good as it gets in this market.
Trump, many believe, is the Messiah. He will wipe away every tear. Mourning, crying, and pain will be no more. He will deliver us from evil, they think.
I’m in New Plymouth, on the west coast of the North Island of New Zealand (NZ). The bolthole search continues. You’ll find more on that below.
Untying the US economy from China is not possible. The relationship is sick…but symbiotic. The US provides the fake money. China provides the cheap stuff.
The combined value of the FAANG stocks — Facebook, Apple, Amazon, Netflix, and Google — is down by about $1 trillion from its peak. Why?
Central bankers usually add gold to their reserves to diversify, and to provide a hedge against inflation. According to Bloomberg, central banks now hold about a fifth of the gold ever mined.