In a Bloomberg TV interview, Milton Berg, founder and CEO of MB advisors says “We’re at the cusp of a 30-year bear market in stocks and bonds.”
Click on link to play.
Berg’s view is on a 30-year bear market is on a “real inflation-adjusted basis, not a nominal basis”.
This is the “most over-valued equity market in history, worldwide” …. not even a Mario Draghi “whatever it takes” action will help.
“It’s all one big worldwide bubble.”
I especially like Berg’s admission that he does not know how this ends.
“Either deflation is going to accelerate, which is most likely, or they [central banks] will turn to real inflation, real printing, rather than just credit inflation. Either way it’s disastrous.”
That has been precisely my view for some time.
I too, expect another round of credit-based deflation but I am willing to change my mind if something different happens.
Berg finishes with a bang: “The whole idea you buy stocks and hold them for 30 years was never correct. … The typical investor should be out of stocks and out of bonds and wait for a crisis, and buy during a crisis.”
Not sure when the bond bubble bursts. Stocks are on the cusp now.
But as I have stated, there may not be a crash that many bears now expect.
My favored scenario is a series of five to fifteen percent declines over a number of years, with smaller and less frequent rallies, where every rally is a trap.
Such a slow bleed would be far more painful to pension plans counting on eight percent annualized returns.
This is one of the best Bloomberg interviews I have seen in a long time, but I am a bit biased. I would have said nearly the same thing.
Mike “Mish” Shedlock
Buying during a crisis may be good advice for the pros with all the technology available, but the individual investor doesn’t have a chance against them. And many like me have sworn never to return to Wall Street Casino.
The retail folks (the ones still in) will ride it all the way down as always.
Even during a crisis there will be many up days … every upturn CNBC will be screaming “the bottom is in”. Folks will be paralyzed.
Few remember October 2008 saw a 900+ point up day for The Dow.
I need a new car… by this time next year the dealers should be ready to choke on inventory.
Retail investors have the best chance. They are not accountable to any quarterly reports and are not pressured to trade in and out. Too bad they don’t have any money left.
It is time to Sell , Sell n Sell to every rally .
Let the stubborn bull exhausted and fainted .
Let there be multiple crashes now :
China stocks ,
Japan stocks ,
U.K. stocks ,
U.S. stocks , etc
Let $ SPX Fall to 1,700 – 1,600 – 1,500 …
And
Let Dow Jones Fall to 14,000 – 12,000 – 10,000 ….etc
Let them Fall freely,
deep and fast ,
the sooner the better.
Don’t withhold .
Let them fall deep now ,
So we can buy the dip cheap .
“Not sure when the bond bubble bursts. Stocks are on the cusp now.”
I’m probably the biggest US Treasury bond bull you’ll ever meet. For many years I’ve been calling for the 10yr note to hit 1%. But the time will come to skedaddle out of bonds.
USTs will be Last Domino Standing
Tony Bennett, I agree with your scenario If yields decline to 1%, sell, but you might have to sell sooner.
You might have to sell sooner and sooner than you think— like overnight. One of these Central Banks may reverse course on the negative interest rate policy since it’s destroying the banking system(s) (thinking Japan). Anyway, you’ll see a big yield spike —like a huge flash crash that will spread to the US markets too (spreads would remain). The carnage will be enormous. Of course, you could reposition back in bonds if that happens. A dollar collapse would bring back a growth/inflation scare as well which could really hurt bonds for awhile. Trump might bring a “growth scare” with his infrastructure/defense spending plans.
Real money dispersed to people could create a temporary burst of inflation. But that would likely be temporary and deflation would re-assert itself when printing stops.
But until one of those scenarios, I’m holding on to 36% Muni Bond CEFs and 26% Treasuries with 25% in dividend-paying equity. If stocks drop 40 to 50% and bond yields drop to 1% as you suggest, I would sell bonds and would reposition to dividend champion stocks which would then yield 4 or 5% or more. At that point, I would be way overweight dividend stocks instead of bonds.
I believe that Gold will be the last domino standing, not Treasuries. A yield of 1% on Treasuries is dangerous. Sell if it gets that low.
In reality, none of us know how all of this is going to play out. I don’t know, but I’m watching things closely.
Until we go Mad Max it will be a fiat world … and gold just another asset that goes up and down in value.
The coming crisis (deflationary bust) will see the US government use as opportunity to enhance $US hegemony…. and put to rest the babble over yuan/SDR/whatever as THE reserve currency.
Treasuries will do very well.
Another rate hike ought to about do it. Janet has managed to drive the 10 year down 40-60 basis points since the last hike.
Yields on US Treasuries will be RISING SHARPLY towards 3.00% on 10 year US Treasuries and the value of the dollar will be soaring well up past 100 on the DXY and on its way to 120 and higher on the DXY.
There is no such thing as a “bond bubble” as bond prices are NOT SPECULATIVE (unlike commodities such as gold or tulip bulbs) but are a mathematical equation directly inverse to the yield of the bond which is not arbitrary at all in relationship to their value and just the opposite is the very definition and requisite for bubbles. Bonds will simply reprice as yields rise – as they have done many times in the history of bonds as that is how the bond markets work. Anyone who holds bonds for their duration experiences no losses at all when bonds reprice due to yield changes.
Nonsense. Bond price is intrinsically tied to yield, as you state, so why would you try to separate the meaning of the two values. You seem to believe that the ability of the FED to guarantee the printed value is tantamount to establishing a foundation for all other market values. This is certainly not true, though there are those who would like you to imagine so.
No losses – try inflation, try default. Buy at 1% when tomorrow 5% is being offered and inflation heads up, then you, by any standard but stupidity, have made a loss.
Gold is not speculative, it just sits there.. is a mountain or a pebble speculative? No. It is held by those who feel it worthwhile, those that try to profit financially by it are speculators but they do not determine its value, only adjust one value that cross-references itself to it.
Obviously, bond prices are tied directly to yield and bond prices are directly inverse to yield.
The Federal Reserve has LITTLE TO NOTHING TO DO with yields (interest rates) on US Treasuries.
Gold is nothing but a WILDLY SPECULATIVE ASSET with extreme price swings and is headed towards and to its mean of $456 per ounce and then lower during its current down cycle which will likely last out until 2032.
Anyone who looks at the current state of the major economies around the world, the unsustainable (and growing) debt loads, the predictable debasement of fiat currencies, etc., and arrives at the conclusion that gold is going to drop by two-thirds of its current, artificially suppressed value before heading significantly higher, is living in a dream world.
“Yields on US Treasuries will be RISING SHARPLY towards 3.00% on 10 year US Treasuries”
Nonsense
socalbeachdude, I told you when you wrote this I was going to save it.
October 16th, 2015
“US Treasury prices are headed LOWER not higher as prices are inverse to yields and yields will be rising substantially ahead. The 10 year US Treasury will rapidly be heading to 3% and higher.”
That was SEVEN MONTHS AGO … and yields have steadily dropped since…. and they’re going much LOWER.
…
Raise the white flag. Surrender.
You think your fiat world looks all nice and stable, but gold is telling you exactly what is going on, why should you resent that.
As for the FED and yields I won’t even bother to provide any of the multitude of solidly sourced meticulous articles that explain this, instead I will just draw attention to the fact that the often used references in the yield curve used to demonstrate the influence are in fact an underestimate of it. That is to say we see yield move downwards and measure the distance but we are not measuring the gap that would have occured without intervention.
Why would yields rise in a deflationary environment? Because of a shortage of money available to invest/save, that is why, thanks to the credit machine being unable to generate new debt. Due to the following system failure prices might actually inflate in that environment, contrary to expectation, and they would do so where they were most able to, in matters of necessity, with the rest deflating or being written off.
Now if you think the economy might be managed centrally in a superior way, who am I to judge, but at least have the courtesy to recognize and admit how this is being done, so that its subjects may pass it properly to scrutiny.
Apple buys a Chinese Uber knock off at $20 billion market cap with one $billion investment. Bubble? Bubble? I don’t see no stinking bubble.
Theranos COO slinks away in disgrace. At one time this college drop out twenty something
was worth 4.5 $billion.
There’s no bubble. What are you talking about Mish?
China private debt 300% of GDP. Private debt grew at 60% per annum last year. Who thinks that can’t go on?
BOJ is largest holder of stock ETF’s.
Our Fed owns bulk of student loans.
Government guarantees 95% of new mortgages.
Oh. Here’s the kicker. Paul Krugman and Ben Bernanke still believe that total private debt is not an important macroeconomic variable.
The Federal Reserve DOES NOT OWN ANY STUDENT LOANS at all contrary to your assertions and the federal government does not guarantee 95% of all new mortgages. Many mortgages, particularly in terms of dollar volume are JUMBO MORTGAGES that are not even eligible for a penny of government guarantees as only CONFORMING MORTGAGES are eligible and those are capped at relatively low amounts.
The government didn’t guarantee Lehman nor GM, either.
Here:
http://dailycaller.com/2015/01/26/financial-crisis-government-keeps-pushing-mortgage-guarantees-as-risk-index-rises/
Is affirmation that at least 85% of new mortgages are guaranteed. I believe the problem is worse now. Could be only 90%. My bad.
Never forget, “The market can remain irrational longer than you can remain solvent”. How much money has been lost over the past several years by those continuing to call a bottom in interest rates and shorting all the way down? I have personally been burned more than once on my AMZN shorts. But of course my analysis was based on “fundamentals”, which apparently don’t matter anymore. Maybe some day. I have more than made up for that mistake with my shorts of some biotechs, which actually do respond to fundamentals and, of course, FDA news. But one can’t always count on government agencies to act in his favor.
100% correct. Amazon is one of the most LAUGHABLY INFLATED SPECULATIVE STOCKS ever seen in the markets and isn’t worth even 3% on the dollar of its current trading price, but it keeps going UP, UP, and UP.
Iron door, you sound like a walking contradiction. You quote Jesse Livermore, the famous trader. Then you get all bitter about fundamentals not working when YOU THINK they should.
Fundamentals never mattered. It’s all about human emotion.
This article says to go long after a crisis. That is about the only time fundamentals and speculators are in sync. If you insist on trading the ups and downs, you’ll have wild swings in your account. Livermore got wealthy and then bust a number of times.
Good luck.
Actually that quote is usually attributed to Keynes, but the source is unproven:
http://quoteinvestigator.com/2011/08/09/remain-solvent/#more-2600
It sounds like something Livermore would say but I do not recall reading it in “Reminiscences of a Stock Operator”.
Mish, I think your last sentence got cut off. It should read, “I would have said the same thing… three years ago.” 🙂
Yes, Mish did and even longer before that and I personally have been saying exactly that ever since 2007 which is now about 9 years ago.
Same thing, even now I place short bets and have to cover over 50% of the time.
Treasuries rates will continue down over the long haul. Stocks bonds toast.
Worst expansion since “Great Recession” so how in the world are stocks and bonds
Going to to rise? More gov intervention= even worse growth fwd. as debt soars growth
Decreases. And if Hillary wins its like having the worst boss you ever had x100. Shes
Like a district manager spewing rhetoric and has no conviction or clue as to how to lead.
Nope. US Treasury yields (interest rates) will be rising very significantly over the coming months and years and will head to and higher than 3%.
As to Hellery, the only thing she’s going to win is about 10 years in the federal hoosegow.
TImmmmmber!
“I especially like Berg’s admission that he does not know how this ends.”
If doom and gloom predictions are allowed, I make one.
It will all end up with a big war. Level everything and create demand.
In any case, we are doomed. Humanity looses when the markets have their way. Or can we talk about markets anymore when all we have is central banks “interventions”?
I think this can and will go on a whole bunch longer than anyone would imagine. There is a lot of money in the world. Credit can be artificially created. Profits are still historically high. The S&P 500 has been bouncing around from 1820 to 2120 for a couple of years now. Sell when its over 2000 & buy when it gets below 1900. Rinse and repeat.
Profits have been plunging since 2014 along with revenues for most of the S&P 500 companies and now they’re getting dramatically worse. What has kept the stock markets propped up is MASSIVE STOCK BUYBACKS and that game is coming towards an end.
it ends in inflation as the developed world prints-to-fund as the UStenyear goes to 8% after the PIIGS default.
Nope. It ends in massive intensification of the current GLOBAL DEFLATIONARY SPIRAL with prices falling. The PIIGS have nothing whatsoever to do with the yields on US Treasuries.
I think that once the shake-out in stocks gathers strength, say goes below 1800, there will be panicky selling. It’s just normal herd mentality. Of course, you’ll have the idiot Federal Reserve flunkies spouting off all the time when that happens. Those people are so frigging ignorant. The whole Fed Reserve should be cleaned out, eliminated or their mandate to control inflation at ZERO, not 2% or any other bullshit target.
Big picture, we’re becoming Japan and we probably face decades of near-zero growth, That means some periods of below zero “growth” and some periods above. That’s the best case scenario!! Worst case is blow-ups of debt in China, Europe, Japan and US and we enter a huge Depression where the financial system and global supply chains fail. I bet the latter happens. Here’s my fast collapse thesis: http://gulfcoastcommentary.blogspot.com/2015/08/fast-collapse-or-slow-i-think-fast.html
Mish, so … cash then?
I am sticking with miners and some other beaten up resource plays
Miners are a very dangerous game, Mish!
And no place to hide.
Except for PM held in your hand. Maybe cash. Maybe miners.
Stay out of debt. Live below your means. Have a few widely different marketable skills. Network. Keep learning…
Well, let’s see, we already tapped the auto market’s future sales by selling autos to people with no credit score. Let’s see if we can get Congress to guarantee loans for those “migrants” with no skills that Obama is shoving down our throats.
Dear TEAL, Please read and listen to the video. Something to think and worry about. I am not to sure of the speaker, but th writer (Mish) I follow quite closely. Love, US
Long bears (inflation adjusted) are a historical fact when bankers print wantonly. In effect, bankers confiscate investors stuff with the printing press.
Printing is the bank’s war in investors. So much for the majority’s defined benefit pension plans and 401k’s. Let’s hope bankers don’t turn the west into a clone of the banker’s paradise of Venezuela.
They will. Unless non banksters wake the heck up and turn it into Somalia first. There ‘may’ be some other alternatives, but they are extremely unlikely.
Nope. Not the slightest chance of that.
The only question is WHEN. I’ve been saying this since 2007 and then the markets did crash only for the 2009-2016 “boom” to return to push the markets in commodities, equities, and real estate to even more preposterous levels totally unjustified by the underlying fundamentals.
30 year bear market in inflation-adjusted terms, sounds about right. But much better than holding fiat currencies, many of which went extinct in the past 30 years. Also, you have to figure in dividends, which when compounded make the stocks a superior investment. Would be interesting to compare stocks, bonds, real estate, gold and the top currencies for the same 30 year period, or even 10 year periods for those of us thinking in shorter terms. Though in the final analysis, to paraphrase some boilerplate: Past results are no guarantee of future results.
Warren Buffet and Bill Gates who made fortunes holding stocks the past 30 years would no doubt have a good laugh. Might be worth thinking about what makes up averages, Bell Curves, and outliers. One good outlier stock pick can make all the difference; in this respect, stocks differ from gold bars in their diversity.
Buy the crises? In 2008/9, that would have been banks, home builders and automobiles. Certainly could have worked, even with a few bankruptcies thrown in. Better to have been an insider, lined your pockets, and taken bailout money from the FED and USA Treasury. But if you can predict what to buy and when to buy and keep a lot of cash on hand, then you could probably retire for life buying the right stocks during a crisis. Not sure most of us would have the ability to wait for the next crisis if it turned out to be 15 years in the future, versus a year or two. Also, usually it is a crisis because we do not have cash or liquidity to buy much. It would be much better if the Fed manipulations and government meddling (regulations, high taxes, wage and health mandates, etc.) were eliminated and we could get back to an economy where people could more easily start businesses and get jobs.
Just to clarify, I think we have in inflation-adjusted terms been in a bear market for multiple decades. So, to my mind, Berg seems to be saying more of the same. History repeating itself. What a novel concept.
As long as Central Banks remain in control of market perceptions, there isn’t much alternative (for an investor who would like to make it to the “other side” relatively intact, that is) to ever depreciating cash except Real Estate, Precious Metals (Real Commodities), Collectables and means of production items, ie; things not receipts. *Mining shares are receipts. Bonds are as well. So are dollars.
Debt itself is denominated in an unbacked debt instrument,,,the Federal Reserve Note. One could even call the dollar a derivative, in an abstract sort of way. A derivative that its creator and issuer discourages the holding of.
*Mining Share= Certificate of diluted ownership of a hole in the ground with a liar on top.
Don’t get me wrong, I’m in miners, not to exceed the budget limitations I would have allocated to a trip to Vegas.
The scary thing about miners is many of them raise cash by leasing forward production. In this way, the big banks control the futures markets, as only they know how much production is really available.
Despite that I like Mish’s idea of holding SMALL amounts of beaten down miners.
Gold is rapidly on its way to its mean of $456 per ounce and lower.
LOL
Patently ridiculous.
Adam, I am copying your comment so I can remind you of it later.
How it ends for socialists is on display in Venezuela. Last week they ate the last dog and rat. The government raids closed food manufactures to find stores withheld from the market. Mobs are roaming from town to town in search of free government food. Peasants shacked up on redistributed farms have no government money to buy seed, gas, fertilizer, and repair parts.
…
“We’ve applied a very austere program,” Vice President for Economic Policy Miguel Perez Abad said at an interview at his office in Caracas, adding that imports would probably fall to about $20 billion this year from $37 billion in 2015. “We’re going to maintain this level of restriction to force the productive sector of the economy to increase output. Hopefully we could cut imports to as low as $15 billion.”
Force the productive sector… and you intend to pay them with currency depreciating at 100% per year. They may PRETEND to be productive, but they’ll try to hoard anything of actual value. Price controls always produces shortages.
They are doomed. Anyone who doesn’t have gold, foreign currencies or bitcoins is gonna get very hungry.
Obviously, the US dollar doesn’t depreciate at 100% per year and has risen very substantially on the DXY over the past 2 years and will be soaring rapidly over 100 and then up to and over 120 on the DXY over the coming years and reaching as high as 164 on the DXY while commodities junk like gold plummets towards and to its mean of $456 per ounce and lower.
LOL – go ahead and bet on that
Short gold and buy the us dollar index
US centric viewpoint. Value in equity markets in the RoW.
When you say gold is going to $456 you leave your credibility in tatters
Exactly. The notion that gold value will suddenly behave radically differently during a period of severe crisis than it has historically, is ludicrous.
In fact, its reliable use as a store of value has been on display in recent years when seen through the lens of more than a few currencies throughout the world.
It’s a bit far fetched, but by no means completely crazy.
Gold is still an “asset.” The official gig of the bankster era, has been to sponsor policies to divert an ever larger share of the world’s productive output towards “asset appreciation.” Shifting it away from compensation for productive labor. Made official by a Fed bent on limiting price growth in “consumer goods” (another word for saying wages of those producing said goods). While maximizing “asset price appreciation (similarly, another way of saying compensation for the wealthy and the financial sector.)
That’s why we have been bombarded by an endless stream of “ownership society”, “shareholder society”, “deep. liquid capital markets”, “property rights (including IP)”, “access to credit” blah, blah over the past 4 decades.
The above has been the means by which the financial sector and those closest to it, have appropriated not just the current, but also future wealth, incomes and livelihoods of the rest of society.
The end result of the asset pumping, has been that everything that can remotely be deemed an “asset”, is beyond all and any reason overvalued, when compared to labor compensation in productive (as in, not simply shifting around, trading in and squabbling over who owns “assets”) sectors. Which is what has killed the middle class.
Gold demand in Japan has not really gone up during their “crisis”, which started 25 years ago. Instead, what happened is that everyone who owned any other “asset” they could conceivably trade for Gold, had to use those to pay down debt, as the downdraft in leveraged asset prices rendered every “asset holder” upside down on his loans. And as the downdraft in prices has continued, after paying for the past 25 years, many are still as upside down as they were when they started. Still leaving them unable to buy much in the way of gold.
If you assume a similar, say over a few decades 70-80% broadbased drop in all borrowed against “assets” prices in the US, there won’t be many with much discretionary cash to spend on hoarding gold here either.
IOW, although to a lesser extent than most other “assets”, gold has still been a relative net beneficiary of the bubble blowing, vis-a-vis labor compensation. So if we do finally manage to score a proper, serious unwind from the bankster bubble, gold’s boost from being a relative “safe haven”, may be outweighed by it being part of a generally deflating bubble in all assets. The highest floating boat in a sinking tide, if you wish.
I appreciate the thoughtful reply, but find it to be unconvincing.
You note that gold is an asset, and go on to say that “The official gig of the bankster era, has been to sponsor policies to divert an ever larger share of the world’s productive output towards ‘asset appreciation.'”
Do I really need to remind you that for over 40 years, and particularly over the past few years, Central Banks, and governments intent on debasing fiat currencies, have adopted quite the opposite policies with respect to gold? Even China, which has been ravenously acquiring gold to fill its coffers, has been happy to allow the extreme Comex paper shenanigans to continue, and for obvious reasons. Surely you are aware of all of this.
Gold is clearly not the same as most, if not all of the other assets that you are lumping together. It is GOOD collateral, and sits atop the ECB’s balance sheet on the asset ledger. I don’t think that I need to explain any further, but will if you don’t agree, or are confused about the issue.
Now, with regard to Adam’s absurd claim, which you apparently consider to be a possibility, let’s try to keep it simple. We agree – I think – that asset prices such as stock markets and property values (at least in certain places) are significantly inflated. We probably would agree that those bubbles will burst, and in the not too distant future. So, when the “bankster bubble, as you eloquently put it, does burst, many assets backed with paper promises will sink both significantly and rapidly in value.That will undoubtedly catalyze a rush to safe havens, of which there is none more thoroughly time-tested than gold. And given how much gold is in strong hands already, this process is virtually certain to put tremendous upwards pressure on its value, even when priced in U.S. dollars.
I won’t even get into the possibility that Rickards and many others expect, in which gold is re-valued as a part of a basket of currencies, or to back the Yuan, etc.
So even excluding those very real possibilities, can you imagine a scenario in which gold does not spike significantly higher in the coming months and years? And if so, I’d like to learn on what basis you believe that could happen.
If I had to bet my own money, I think we’ll see Gold at $2000 before Gold at $456.
In no small part because countries that are still somewhat productive, will realize they are being played for suckers by working their ass off to make goods for Americans. Who nothing useful at all in return, instead simply paying for the goods in printed money. But once the dollar is no longer desired, there is really no other currency issuing body that will be generally trusted to issue nothing but paper. So gold will come in the backway. The way it has always done at inflection points/crises.
But simply going by the Japan experience, when everything “collapses” and are at the same time borrowed against, the only thing that “appreciates” in a relative sense, seems to be the currency all the debt is denominated in. Simply because while everyone may WANT gold, they NEED the currency required to pay their debts.
And in a fractional reserve system, paying down debt literally erases that money from existence. So lent into existence currency doesn’t behave like normal assets, which are simply transferred from debtor to creditor, where it can still be used to buy gold.
In Japan, even after 25 years of deflation and ever more insane stunts by the BOJ, there is probably still more nominal debt that “needs” to be repaid, than the combined value of every “asset” available, if the latter were properly marked to market. And the same will be true in the West, once the 70-90 percent of current asset prices that are attributable; not to their realistic future cashflow, but instead simply to blind faith in ever greater suckers and central banks keeping the levitation trick going; are taken out back and properly disposed of. But here, as there, barring major disruptive change, the nominal debt, and with it the obligation to raise dollars for it’s repayment, will remain.
We’re in basic agreement about a number of issues. I do, however, take issue with the reference to Japan as being somehow instructive, if not analogous. I say that for two basic reasons. First, Japan is a remarkably homogeneous society, and one in which individual sacrifice for the good of the country is largely taken for granted. That is, of course, sharply different from that of the U.S.
Secondly, all but the most recent few years of its bizarre, long-running monetary experiment, took place during times in which other major economies around the world, notably the American and European, were doing well (if not thriving). This allowed, among other things, Japanese businesses to do well with their exports. What has transpired since the 2008 crisis is nothing like the previous 25 years, and it is no coincidence that Japan has accelerated on its inevitable path to a disastrous endgame. In other words, the context of much of Japan’s experiment was radically different than the context of the world today, and so I would argue that it is a dubious model to use.
I do agree that those in power in the West would be delighted, relatively speaking, with a similarly long, drawn out decline. But for many reasons, I don’t believe that there is any chance of that. The reckless policies that have been carried out by Central Banks around the world will insure that an inevitable crash occurs, and I don’t see it taking much longer to unfold.
The current Western bubble is definitely much larger and more pervasive than the one in Japan. Not least because it really only substantially engulfed a small portion of Japanese society. Even absent credit access, Japanese companies and workers has never fallen far from being the most productive anywhere.
In the West today, I bet half of incomes, perhaps even more, are no longer derived from work that is even remotely productive in the absence of a credit run up. Flipping houses, suing eachother over flipping, administering zoning laws regarding flipping and collecting commissions from all of it plus hawking shares in companies who never have, nor ever will, make a cash flow profit, is pretty much all anyone knows how to do anymore. Along with being paid to make up cheesy stories to support selling $5 Vietnam made shoes and purses for $500, to “successful” house flippers. And squabble over who “owns the rights to” something, that is either fundamentally worthless, or doesn’t even exist. It’s pretty darned grim, something Japan never really suffered from, as their bubble was more or less just a sub decade long blowoff, built on a fundamentally sound foundation. Which is why I suspect Argentina post 2001 is a better predictive model for the US going forward, than Japan post 1991.
But, unless the “crash” you refer to over here, involves massive, meaning 2/3rds or more of current market value of all global assets combined, debt repudiation, this just makes the case for ANY asset appreciating even more tenuous. As the debt overhang will have to be paid back without aid from sales to buoyant growth regions anywhere. In Japan, successful exporters have at least some respite from spending every single dime they bring in, on servicing decades old debt. No such luck when it finally sinks in that levitation isn’t really magic but just an illusion, over here.
Absent a massive change in outlook, people still cling to the notion that debt is something that “must be paid back.” It’s some sort of religion or morality for many. Look at Greece. Instead of outright refutation, and reset, the game is one of perpetual extend and pretend, aided by central bank policy and lax accounting brushing missing cash flows under the rug. Such that the debt never goes away, but instead will forever depress future activity and risk taking. Just like in Japan, just with a timeline of potentially centuries, rather than the mere decades of the Japanese experience.
But again, the big upside for gold, is still that the dollarsphere will lock up so tight from noone trusting any counterparty to be solvent, than noone will really trust dollars as a from of payment anymore. Making the hassles of hauling gold around, worth it on risk/benefit balance.
damned video won’t play…enough commercials play to fill a week of my life…no video.
Berg, last twenty seconds of the interview :
“We had fewest days outside the 6.4% trading range in the last year since 1928. People think there has been a lot of volatility, but there hasn’t been.”
That includes the first six weeks of 2016, the worst calendar year start in NYSE history. These trading algorithms are keeping a tight, well controlled (6.4% on average) range. That 15% correction? It was dialed in and delivered like a pizza. Be sure and tip the quant fund tweaker who delivered it when you see him.
I think Berg is spot on. Retail investors should sit tight and await a crisis buying opportunity. Hopefully, the crisis won’t involve having their MM funds rehypothocated as their brokerage custodians are reduced to rubble.
The Investment Company Institute says $97B flowed out of equity funds since the 2009 bottom. This recovery was driven by corporate buybacks and big institutions. Execs borrowing capital on the cheap to purchase inflated shares of their own stock.
I’ve been reading comments by this Adam Price guy and what a trip he is on. $456 an ounce? In your dreams. He should put his money where his mouth is and be shorting gold non-stop. I am completely in miners and they are up over 50% and then some. In fact I already made enough to retire and I am now speculating with the houses’s money.
Let the fall deepen , Let the Crash begin now ….
Sell in May and go away .
It is time to sell , sell n sell .
Let the Bear conquer the bull .
Let the stubborn bull exhausted and fainted .
Let there be multiple Crashes for global stocks :
Asian stocks ,
European stocks ,
U.S. stocks , etc ….
Let stocks market to Fall deep and hard now .
It will be good to see multiple crashes :
$SPX crash to 1700 – 1600 – 1500….etc
Dow Jones crash to 14,000 – 12,000 – 10,000 , etc.
The faster the crash, the better ,
so the stocks will be cheaper n cheaper .
Then we will buy the dip cheap .
Let them Fall , let them fall freely .
Don’t delay the crashes ,
don’t withhold them .
Let the Fall deepen , Let the Crash begin now .
Sell in May and go away .
It is time to sell , sell n sell .
Let the Bear conquer the bull .
Let the stubborn bull exhausted and fainted .
Let there be multiple Crashes for global stocks :
Asian stocks ,
European stocks ,
U.S. stocks , etc ….
Let stocks market to Fall deep and hard now .
It will be good to see multiple crashes :
$SPX crash to 1700 – 1600 – 1500….etc
Dow Jones crash to 14,000 – 12,000 – 10,000 , etc.
The faster the crash, the better ,
so the stocks will be cheaper n cheaper .
Then we will buy the dip cheap .
Let them Fall , let them fall freely .
Don’t delay the crashes ,
don’t withhold them .
Common sense theory.
The market cant fall because the fed buys stocks everyday. On a bad day for the market they spend billions propping it up and on even days they are also buying on up days guess what they are also buying . Somedays they drop the market by selling some of their stocks just to push the bond prices down and then jack it up at the end of the day and the bonds stay down. Its been going on for years. All investors have gotten to take a free wealth ride thanks to the gov. Everybody gets to act like they dont owe the government anything. They dont worry about inflation from all the new dollars used to buy stocks because most of it is never spent by the rich who own most of the securities. Our whole economy is based on the price of the market. The fed will have to keep backstoping forever. The saddest part is after all the trillions spent propping up the markets , none of that money trickled down to the middle or lower classes. Greedy son of a b@@@@@@@.
Fed does not buy stocks – but yes they indirectly prop up the markets
Looks like the Berg is at it again with his “30-year bear market” pitch. Just imagine if you had taken his “sage” advice in May 2016 when he first made it? Cash under the mattress, wait for the huge drop then buy. Wow. I personally would be out many six figures if I had. In fact, I did the opposite of what the Berg said and will do the opposite now. Any drop in equity valuation will just bring another QE, then another, and another – for the next 30 years. Why fight the gov’t when they are handing you money? Unbelievable. Here is Berg’s Aug 30, 2017 toupee-adjusted prediction:
https://www.bloomberg.com/news/articles/2017-08-30/from-stocks-to-bonds-the-bear-market-signals-are-multiplying