DJIA. Just look at it, is it not funny how correlated everything looks on a 100+ year chart? We are the the top. Can we this time get through the historically impossible resistance?
Knowing JPow, when market drops 10-15% he will spin up the BRRRRRRR into panic overdrive and we'll blast right through the final resistance line into pure hyper-inflationary environment where %age growth does not matter anymore, up_only.
Given that USA debt will shortly be $30 Trillion, if .gov bond rates would be at ~5% then that would be $1.5 trillion in interest payments on debt alone, or about 40% of the 3.71T tax revenue in 2020. Everyone knows that anyone who pays 40% of income just on interest, is bankrupt beyond all hope. This is why USA will keep the interest rates low, there is no other way, regardless of what inflation does, and in order to so, the Fed gotta do BRRRRRRRRRRR, the markets will pump in nominal terms while inflation eats the actual profits. Deflation is the enemy of the state, because with deflation, large debts become non-serviceable, and as you know (if you been paying attention) that all money is debt that is loaned into existence. If the human civilization was to pay back all of its debts, there would be no money left, and we would still owe the interest. We are forced to perpetually borrow ever more to pay existing debts and interest. Inflation is designed into the current system. Hyperinflation is the inevitable end game. All (fiat) money is debt-- Sounds like double-speak, but such is life in the current financial system.
After a little dip to scare JPow to print MOAR, we should eventually break the top ultimate resistance line on DJIA, and move into a new paradigm of perpetual up & only up, which will be exponential and approach the current economic systems end-game at light speed.
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For over 100 years, the most capitalistic things of them all: the mediums of exchange- money and the value of money (the interest charged on $$$$), has been "carefully" centrally managed, controlled by The Powers That Be (and competition has been forbidden).
We are entering a new era, where medium of exchange systems compete with each other in capitalistic fashion, where people are free to choose in what medium they want to transact in, maximizing their own benefit. This does not sit well with the current TPTB, because they have seemingly effortlessly been able to reap incredibly disproportionate rewards by controlling the medium of exchange in communist fashion (centrally controlled by decree). TPTB do not even care about the money itself, since TPTB can create unlimited amounts, enough to buy the whole world, at any price and any time; they care only for control. Losing control creates panic, losing comfort creates panic, losing relevance creates panic. The Powers That Be are in full panic mode to maintain the status quo and their communistic cartel monopoly. With the current TPTB financial system collapsing, watch TPTB try to appear as the grand saviors with new "better" economic system, veiled in virtue and "good" intentions, but the systems will be even more communistic and centrally controlled, the intention has always been to maximize control.
Cryptocurrencies will help to change the world by offering alternative medium of exchanges that TPTB will not be able to easily control, but Bitcoin will not be part of it. Bitcoin can not be part of the revolution in its current state of measly 7 transactions per second, $50 txn fees during high network congestion and high energy cost. Somewhere, someone will figure out a solution to an energy efficient, decentralized, scalable, anonymous, non-inflationary, instantaneous medium of exchange for the entire planet, the greatest competitor the FIAT currencies will ever see. With the greatest competitor appearing, people will start abandoning the USD and Fiat currencies. While Fiat will not be abandoned entirely, it will finally have competition, and people will have a choice to opt out of debt slavery that's been forced upon them for 100+ years of central banking & inflation. We, the people, will have a choice we have never had.
Inflation of the money supply is a hidden tax on responsible savers where capital creation is forbidden in practice (but allowed in name) for common folk, because capital is eroded through inflation, forcing people to go to the big banks (instead of lending/borrowing person to person at their own interest rates (value of money)) in order to beg the banks for a loan, keeping the big banks and the parasitical TPTB forever relevant. The new era of competition in mediums of exchange will open the door for democracy and capitalism in the ultimate sense, where behind the scenes dictators who install puppets every 4 years will no longer be able to finance wars and their covert schemes through centrally controlled money printing at the expense of the human civilization. Competing, instantaneous, world-wide, independent mediums of exchange will be the Greatest Liberation in the History of Human Civilization.
Enjoy the Dow Jones Industrial Average blow out of the final resistance zone after a small reversal. Enjoy the Dow Jones Industrial Average eventually become increasingly meaningless as it fails its purpose to serve as a useful indicator in a hyper-inflationary world. Enjoy the future where you no longer are a debt slave. Enjoy the Freedom that is coming soon. We are close to the end game.
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Here comes the duuump!
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Good thing DJIA has read my chart and obeys it, or the chart would be invalidated and I would lose TV cred points.
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Everything going according to plan showcased here.
I also contend that we live in a global neoliberal theocracy.
Funnily enough the euro sold off heavily against the dollar yesterday... because the ECB said they would continue 'measures'. Watch people in finance diligently try to explain how 30 trillion in debt is no issue, because reserve currency, and because Modern Monetary Theory... And also MMT is apparently not money printing, it's special. They also had to rebrand pyramid selling...
The weasels are closing in. Any chance of a 'beautiful deleveraging'?
Luckily it's a really easy time for average people to move their net wealth into decent assets that hold their value (sic)
Debt free is not so much fun if you are also roof free :p
In any case it might slow down the 'growth at all costs' / 'empty world' siloed economic thinking that seems to have taken control of all politics.
It won't be boring at least.
UnknownUnicorn493766
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Great work and effort put in to your ideas
cashonly
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@gremic, thank you I appreciate it.
m0nza0ne
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Can I be your friend?
metaloph1l
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I agree with you. Deflation would be the natural course, but the governments cannot let that happen. They're just waiting for the next black swan event to start their money printers into hyperdrive. What are your thoughts about gold? In my country we don't pay any capital gains on precious metals. If/When this scenario plays out, wouldn't it be better to buy those since capital gains would apply to stocks?
cashonly
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@metaloph1l, my reply is late, indeed the end game of a fiat currencies where all money is debt, has a 100% mathematical outcome of an hyperinflation end-game. That said I expect this chart to dump a little, and just like you said, next "black swan" they'll pump the DJIA candles out of the frame of this image, vertically up, not because national productivity increases but because the USD in circulation increases.
Thing with gold is we live in an instant world, where instantaneous limitless size transfers cross the globe are paramount. Gold fails this, as you simply can not get it from A->B quickly enough in any significant quantity, while the verification of authenticity is another massive detriment for gold as the leading medium of exchange in the future. Currently BTC solves the instantaneous demand and verification issues in ways gold can not. That said, given the artificial price suppression for precious metals by TBTF banks, given the detriments of physical weight, logistics and authentication of gold, it can not compete with BTC or any other instantaneous payment system. Gold will rise, but likely modestly. It remains to be seen how exponential the inflation chart has to become before gold breaks out and keeps pace with inflation. Meanwhile, also the values of the human civilization changes, if we lived in a physical world previously, now we are transitioning to a virtual world- ask most people if they want $1000 on BTC/PayPal or an ounce of gold they'll take $1000 on PayPal.
Scheiropractic
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Yes all fiat currencies are faith based, price inflation is more rapidly creeping up—>increased velocity as it becomes better to buy something that holds its value rather than hold the cash—>increased rate of inflation. As price inflation picks up interest rates will have to increase, but it is impossible to raise them to the point where they equal price inflation because that would lead to immediate financial and government collapse, and money pump has to increase just to be able to maintain interest payments. Right now real price inflation may be around 15% and interest rates are around 1-2%, which means in real terms a holder of a gov bond lose 13-14% in purchasing power in a year, this pushes out any real saver which has to be replaced by money creation. In 6 months real inflation may habe increased to 25-30%—>increase velocity of money 3-4x—> accelaration of price inflation due to shortages. At this point the interest rate may have gone up to 3-5% which means no sane investor will buy government bonds losing 20-25% a year —>full on monetization of government deficit and debt. A few months later 50% real price inflation (reported as 10-15%), interest rates at 10%. Strikes break out due to people not being able to feed their families on salaries after paying mortgage —> greater shortages—> higher prices
This is the mechanism of Hyperinflation. Probably by 2023 we’ll see inflation surpassing 100%/month, mirroring Weimar Germany 1923 but on a global scale.
JohnWukong
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Not yeeeeeeeeeeeet!
Interesting to see how everyone is still nervously eying the door, but this Evergrande thing won't kill the beast just yet. China will let it die, and then sort out the mess afterwards. Retail investors will probably get screwed, but they will just renationalise the property market which is a top-down goal anyway.
As for the Crypto-bill, after Arghanistan/Money Printer/Debt they can't really kill the newest thing universally denominated in USD. Especially know that petrodollar lives on borrowed time. They might hobble it a bit, but they daren't kill it.
Debt-ceiling is my main concern... but then the US is exceptionally gifted at kicking cans down the road and ignoring the ticking noise.
I don't disagree it's coming, sooner or later, but right now its a dip worth buying.
(Famous last words... )
cashonly
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@JohnWukong, the Debt Ceiling.. a quick search back on history of Debt Ceiling, shows that it's just a number they argue about and raise the ceiling every time as if nothing happened and then it's quiet for couple years.
Funnily enough the euro sold off heavily against the dollar yesterday... because the ECB said they would continue 'measures'. Watch people in finance diligently try to explain how 30 trillion in debt is no issue, because reserve currency, and because Modern Monetary Theory... And also MMT is apparently not money printing, it's special. They also had to rebrand pyramid selling...
The weasels are closing in. Any chance of a 'beautiful deleveraging'?
Luckily it's a really easy time for average people to move their net wealth into decent assets that hold their value (sic)
Debt free is not so much fun if you are also roof free :p
In any case it might slow down the 'growth at all costs' / 'empty world' siloed economic thinking that seems to have taken control of all politics.
It won't be boring at least.