Happy Sovereign Sunday and once more into the breach my friends!
Incoming mea culpa. I have to admit that anytime Sleepy Joe opens his mouth it makes me somewhat more empathetic to understanding what it must be like to have TDS syndrome. I mean, nearly every time Joe speaks it’s a cringefest of gibberish that embarrasses most Americans and makes my blood pressure tick up.
Now granted, Trump said some off the wall shit and mostly tried to provoke rather than reach consensus, but for the most part he was right about everything and his polices were spot on the most effective, prosperous and pro-American policies this country has seen in the last 30 years.
The major difference between the two of course being the media lied, spun, dissembled and spread fake news and disinformation about anything and everything they could when it came to Trump – think the 4 years of ‘insurrection’ known as Russia Collusion and Mueller, Charlottesville, Kavanaugh, Solemani, Russian bounties, Ukraine impeachment, Covington. etc.
On the flip side, Joe and the Invisible Woman get a pass no matter how crazy or incompetent he gets.
And let’s face it, this isn’t just the most incompetent, mentally incapacitated person to ever run America (and that says a lot considering Jimmy Carter is in that race), this guy is arguably the biggest mental and moral cripple to run ANY major country in our lifetime. I mean Boris Yeltsin who was drunk 24/7 had more respect from the media and his citizens than Sloppy Joe.
It’s not just the embarrassment of having a President that can’t put a coherent sentence together, it’s the weakness he conveys when he gets on the podium and admits he’s not allowed to call on any one that hasn’t been pre-selected and can only answer the questions that have been placed with compliant ‘journalists’ so he can read off his cue cards (which he fucks up half the time anyway). The true joy is in watching him change from one minute to the next, bringing up two totally dissonant points and pretending that both are true.
Here’s Joe saying patriots have zero chance with guns to take on the government and you’d better get F-15s and Nukes (which I’m sure Hunter has traded for crack at some point in his career).
In the next breath and for the past 5 months, you’ve had Joe, the lapdog media and the Democrats hyperventilating about an unarmed throng of rowdy boomer housewives and a guy in a Viking hat that supposedly came within a hair of overthrowing the government on Jan 6th.
So which is it, an unarmed Village People cover band can overthrow the government or you need nukes and fighter planes because your AR-15s are useless so better give them up?
Like vaccines, masks and nearly everything else the press and political establishment has peddled in the last 5 years, this is entirely laughable made up bullshit, with no basis in reality done solely to effect political points and consolidate power.
It’s getting harder and harder to attribute the actions of this administration, the Squad and the other stalwarts of the Left to mere naïveté or moronic idealism. Nevertheless, I’ll continue to hold off for the time being on using the adjective evil and give them the Hanlon’s Razor benefit of the doubt.
On the vaccine side, the news gets worse and worse. Of course you won’t hear or read this in the MSM where there’s 24/7 propaganda for the vaccine and we’re living in one big Big Pharma commercial on loop.
I’ve done my best to avoid talking about this since it’s such a personal decision and an emotional topic, especially since the data has been deliberately hidden and obfuscated including delays in updating the VAERS database. But with more and more data available, it’s becoming clear that for certain groups, this is one of the the most dangerous biological experiments of all time.
The CDC had an emergency meeting last week to consider the new data that shows myocarditis, pericarditis and other heart damage to mostly boys under the age of 20 from the vaccine.
The statistics released by the agency are frightening. It showed that even without accounting for underreporting, a second dose of the Pfizer and Moderna vaccines could increase the risk of problems up to 200-fold in young men.
Ask a friend how many people have died from the vaccine injections? Ask them how many emergency room hospitalizations? My guess is they’ll underestimate by a large margin. Answer yourself how many you think it is, and I’ll give you my answer (which is likely more accurate than anything else you’ll see in the press or on TV) at the bottom of this article.
Then again, I live in a blue city political hellscape where the mayor, schools and everyone in between are running peer pressure ‘hero’ campaigns and giving away free goodies to kids to become part of an experiment with no long term studies that is medically unnecessary.
If we are actually giving anything more than lip service to ‘science’, the course moving forward is clear. Decide what your risk preference and calculus is (if you’re over 70, or obese you’re almost certainly better off risking the shot than getting Covid) but if you’re even thinking of vaccinating your children, please make sure you’ve done the research. There is no medically justifiable reason and the risk vs reward makes it particularly troublesome. Even the WHO, that CCP compromised Ship of Fools had it as official policy that there is no need to vaccinate children under 18 until Facebook started censoring its posts and it caved to political pressure.
Just a reminder, that cohort has a statistical zero for Covid case fatality. Compare that to the thousands of heart damaged and tens of thousands of outright deaths from the vaccine which is finally leaking into the mainstream. There is going to be a lot of furious and scared parents when they find out they risked their lives and their children’s lives because they were lied to.
In summary, three facts are unchallengeable at this point in time.
If you’ve already gotten the vaccine it doesn’t mean panic. There’s a 99% chance you’ll be ok. But if you’re a kid under the age of 20, there’s a 100% chance you’ll be ok without it.
* I estimate the deaths due to the vaccine to be in the range of 25,000, with emergency hospitalizations well over 100,000 in line with the minority reports below. All three are worth reading if you’re considering vaccination.
One thing the age we live in does better than almost anything else sadly is slay all your heroes.
The latest to fall is the Make-A-Wish Foundation. This week the CEO revealed that the Foundation would only grant wishes to medically terminal children who are vaccinated.
As someone who has given money to the cause, I thought this was one of the most craven, repulsive moves I’ve seen. Never mind that sick kids are exactly the type that may not be able to be vaccinated, now you’re going to ruin a dying kid’s wish to be politically correct?
This is such a grotesque betrayal of their stated mission and a new low for humanity, that I’m afraid it’s time for them to go. Meaning, game over, no coming back. The good news is that there’s now a huge opening for some other motivated group of good people to step in.
Last month we closed SovSunday with a deep dive into the 4 kinds of luck. Today I’m going to try on the contra-variant viewpoint that the Fed is either lucky or competent in the way they’ve handled the past 15 months or so. My personal opinion is quite different as you know, but as an investor/analyst/sensemaker, it’s important to take a step back and look at your thesis and attempt to poke holes.
What attack vectors could make one’s thesis incorrect, premature, etc? With inflation running amuck, and the Fed unable to raise rates to such a degree that even hinting of a raise several years from now caused markets to swoon, it seems to be consensus that the Fed has boxed themselves in.
As many of you know, I’ve been highly critical of the Fed and our government for about 15 years now. The financial crisis that derailed our country was entirely avoidable on nearly every front.
I arrived at my current thesis on the Fed and markets earlier than many. Around 2011, it became glaringly obvious to me that a significant and prolonged stock market correction was unlikely simply because the Fed had the ability (and intent) to print money at will.
“Helicopter” Ben Bernanke was openly discussing and implementing policy like Quantitive Easing 1 and 2 along with other measures to pump an insane amount of liquidity into the economy (insane for the early 2010s….of course those numbers look positively shy compared to our current orgasm of monetary and fiscal stimulus.
Bernake’s off the cuff comment about printing money and dropping it from helicopters led to brilliant Memes like BTFD which have been a solid investment policy for a decade and were pure moneymakers with the exception of a brief pause during March 2020 when Covid spooked markets sold off 30% before the Fed got some new printer cartridges, downshifted into 3rd gear and hit the gas pedal.
Since then, the thesis that stocks can’t sell off in a world of unlimited dollar printing has been a solid one. Now the Fed is in a box, and can’t really do anything other than ‘jawbone’ the market - try to Jedi mind trick it into doing what it wants – keeping growth going (even if slow) and avoiding a serious and system threatening hyper-inflationary spark.
I’ll step out of the critical mode for a moment and ask the question, is it possible the Fed is doing a great job? Granted, they were handed a shit sandwich by previous Federal Reserve Chairmen and financial regulators (and our devastatingly insane policy reaction to Covid) so they didn’t have a lot of options. In situations like this, the sage advice of Doyle Brunson is to play the cards you were dealt….and frankly they were dealt a really shitty hand.
What if they’re actually doing the best job possible of navigating us to the other side? Fed tightening (Option A) would likely be a serious policy error and absent runaway inflation should be avoided at all costs. Tightening into an overly levered system growing at a slow pace would be financial suicide, and likely cause a deflationary bust that would potentially end the system as we know it.
Option B would be to continue to print and hope our quasi-free markets can adjust to the inflationary pressures and avoid hyper-inflation. So to some degree they are threading a needle and doing it somewhat successfully so far. Will they continue to be successful? Who knows. And were they good or lucky? Probably a little of both.
I’ve written repeatedly that there is no chance a few old men (or women now that Yellen and LaGarde are inner sanctum global financial alumnus) can forecast markets or economic policy better than the independent decisions of millions of people pursuing their own self interest, or distributed/decentralized decision-making. Nevertheless, the legacy system we have gives these figurines the power over the financial well being of the country (and the world since we are the reserve dollar and big kid on the block).
Distributed decision-making, free markets and accurate pricing systems tend to be anti-fragile, as they correct in real time. Systems that aren’t allowed to correct (which is what we’ve done for 20+ years with a series of rolling bubbles) build up fatal imbalances and are inherently fragile.
Whether the Fed is successful or not in landing this plane with no runway and no working guidance systems remains to be seen. What we do know is that the Great Financial crisis of 2008-9 came about from a mere 4 years of policy error by the Fed. For those not old enough to remember, Greenspan panicked in 2002 and cut rates to 1%, and left them there for a few years. That policy mistake blew up an enormous housing and banking leverage bubble which nearly shut the banks and much of the financial system down.
We’ve been at ZIRP (zero interest rate policy) now effectively for over a decade. How much gross leverage and distortion is in the system now? Does anyone really know? My guess is it’s a lot bigger than we think. Therefore the most serious policy error the Fed could make would be to err on the side of tightening. I’d rather take my chances with inflation or even potential hyperinflation and see if technology or some other Hail Mary can address the imbalances in the system if we can keep the plane gliding for another 5-10 years rather than risk a deflationary bust where debt and negative growth would choke out the economy and individual consumers in a very dramatic fashion.
Either way, if there’s a deflationary bust or a hyper-inflationary reset, you should know that the money you have in the bank isn’t yours, and that the stock portfolio that you think you have, doesn’t belong to you either. In a real ‘reset’, you might get the SIPC $250K, but you’re not getting the rest of it. Not your keys, not your stocks.
Speaking of keys, BTC and the crypto markets have had a bloody month or two. Granted, it’s hard to take the crocodile tears and critics serious when you’re still up close to 400% in the last year, which is better than any and every major market out there (and basically the return stocks have had over the past decade).
Nevertheless, the past is the past and rational people want to know what’s the current forecast?
First off, be wary of anyone who tells you they ‘know’ what’s going to happen.
Respectfully, no one knows shit. There’s just a wide spectrum of uneducated to educated guesses.
My personal inkling is that markets often take a path of max frustration, in other words, what would cause the most amount of pain for the greatest number of participants and there’s your answer.
In light of the above, it wouldn’t shock me to see a breakdown and gap fill at $20K (and frankly, I’d be a buyer as my thesis has not changed…and 5 BTC for $100K sounds awfully cheap in a land where political, social and financial institutions are disintegrating by the day), but I think it’s more likely that we have a range bound market for the next few months. Call it 30-32K on the downside, and 40-42K on the upside replete with numerous fake breakouts above 42 that fail and several fake breakdowns below 30 like the one we had last week and then rebound.
That type of market churns up capital and hurts bulls and bears alike. Eventually, as long as we’re in Option B above and the Fed is printing and the Demented Puppet is spending, BTC should likely tick above $42 at some point later this year and most people will say, “Who cares, it’s another fake breakout” and ignore it.
That’s the one that never retraces and puts us at $50K and within striking distance of new highs by the end of the year.
Remember, 50% down moves hurt, but they only hurt if you’re a trader. Nothing has changed my long term thesis and bitcoin still seems like a binary play, meaning it either goes to zero, or it goes much, much higher. I’m betting the latter.
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**Gov. Newsom says California will pay off all the past-due rent. Anything to beat the recall huh? Good thing US taxpayers worked hard to send their money to California.
**Doug Antin on the consequences of Universal Basic Income.
**People are abuzz at the Nimitz and UFO reports. Meanwhile, 'conspiracy theorists' know the same exact thing was published in 1947 and now looks more true than ever.
**Angel investor Elad Gil on unicorn dispersion and other insights.
**China has found a way to control the brain of mice using magnets. That’s not concerning at all…
**Canada releases documents from a Winnipeg Covid-19 lab that was stolen by Chinese spies.
**Children have been disproportionately punished by Covid-19 restrictions.
**The largest US health care union is fighting against mandatory vaccines.
**Controversial take here by me, but I agree that an Epistocracy (voting restricted to those with knowledge) along with poll tax and ID verification is a far superior system to what we have now.
**RIP John McAfee. A true American original and genius. The world needs more John McAfees, not less.
If opportunity doesn’t knock, build a door. – Milton Berle
The naked truth is always better than the best-dressed lie. - Unknown.