Markets have priced in the vaccine news, so rates are rising, stocks are fully-priced (with hedge funds and retail investor piled-in) and with no stimulus, we are just not convinced that the markets understand that many states are about to hit the reset-button on lockdowns and business shutdowns.
Gold simply has no catalyst in the immediate-term, on top of the fact that investors generated large profits on it in 2020 and now want to cash in their chips.
What does this mean?
For one, it means that the initial reflation trade is over. Now, we will take a breather, before the delayed inflation begins to hit.
* Right now, both case counts (since the tests are truly sensitive) and fatalities, unfortunately, aren’t stopping and we’re entering winter.
* No one knows how large or comprehensive the stimulus package will be.
There are pretty good estimates that it will be between $1.4tn and $2.0tn.
As you can see, if we just wait, the market will give us confirmation of either a breakout or a correction.
What we respect and appreciate is peace of mind, when investing. There are so many unknowns right now, especially as we don’t even know who will be president, or how Americans will react once one is confirmed.
What conclusions can be drawn?
* Covid-19 has shown to everyone that central banks and governments have no idea what creating currency and debt can lead to. They’re not concerned with any of the impact that’s attributed to it.
* Society bails out the rich and the asset owners first.
* People who are working in lower-income jobs must immediately form a side-hustle. The economy has changed and there are innumerable opportunities if one is able to work hard and not wait for government.
* We have no control over the fate of the dollar, but we can prepare by owning alternative currencies. Portfolio Wealth Global has been writing about Bitcoin, for example, for years.
This is the inheritance of today’s generation to our children and grandchildren. They will have to deal with the debt ordeal – but that’s a myth, in our opinion.
We do not believe that deficits don’t matter; in fact, we believe that now, more than ever, the world sees that printing currency, without a plan on how to pay it back, is a recipe for disaster and a destabilizer for society.
Expect an important update on our favorite side hustles in the coming days!