These charts are going to move

Interest rates must be cut down, because the debts are so high the financial ruin from high interest expense is very near.


US interest expense is near $750 BN, most of the US debt is based on bonds under 5 yrs, that is the front end of the yield curve, and the last thing the US wants is a collapse in tax revenue at the hands of a recession (say due in 2023).

Because when the tax revenue falls, and interest expense remains high (subject to inflation levels, the energy inflation will be the issue) the US ratio of tax revenue to interest expense becomes tighter and dangerously close to insolvency. What does this mean? Well think Argentinian economic woes.

Yes the US economy is headed into a Argentinian economic issues with US characteristics. Some sort of capping of interest rates is coming (yield curve control lite) in 2023 and this will lower the US dollar and expand the central bank balance sheets. 


Chart 1 - The US 30 yr interest rate must come down.

Chart 2A - Gold and Silver stocks are ready for the upside.

Chart 2B - Gold and Silver stocks are ready for the upside.

Chart 3 - Silver looks ready to move higher, eventually!

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Original Post: https://ift.tt/wyvIMci

SP500 pivot time cycle due in Dec 2022

China is about to come out of lock down, like all other lock down exits a mini boom follows, so is it time to place your bets.


Maybe they can call Xi lock down exit the 'Xi pivot' (compared to a Fed pivot). 

Come Dec 2022 the US mid terms and the Chinese Congress meeting will be over, and the outcome of the Ukraine winter war may be more clear. 

There is a lot of news coming after Dec 2022:

- Will the GOP be supporting the Ukraine war as much as the Dem's?
- How successful will Russia be in Ukraine during the 'Winter War'?
- Will a Chinese lock down end be a mini boom for the world and send oil and risk on higher?
- What will a higher oil price do to inflation and the worlds extended bond market?
- How will Europe's energy demands be met during the 2023 winter (as supplies depleted after 2022 winter)?
- Will the FED be forced to defend its bond markets buy buying debt to contain interest rates (Yield Curve control, like the BOJ and BOE)?

POINT: The investor class is very short risk on assets, uncertainty after Nov 2022 may force the short players to cover and buy back their positions, hence a SP500 rally in Dec 2022 is very possible.

A Christmas rally started by short covering, which latter gets a 'Xi pivot' boost could run for 6 to 9 months into 2023 (another boost could come from a FED pivot or pause, just saying). Keep your powder dry, fun times are coming.



Chart 1

Chart 2

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US Dollar Cycle Peak Near - Update

Us dollar is extended, now its breaking the most important markets in the world.


The US dollar is at a regular cycle peak, similar to 2015 rally.

It has rallied on the back of the FED fighting inflation harder and faster than the Europeans.

Going into the winter of 2022/23 Euro zone inflation is going to go complete nuts, the ECB is going to have to react, they are going to have to hike rates further than they want. This late reaction to the inflation fight will take the extreme peak out of the US dollar. 

Forecast: FED hikes 0.75% at the November FOMC, and it adjust hikes to either 0.25% or 0.50%. But all hikes are done once 4.5% is reached on the FED FUND rate. But the Europeans are just getting started with a long way to go.

Another reason is the higher US dollar has forced Foreigners to sell US Treasuries to fund their own systems. Just like 2016 and 2020. All this while the FED is selling $90BN a month. Who is buying, Santa! A marginally lower US dollar will allow some buyers to come back into the market. After all 3% to 4% on the US 10 yr bond is better than most dividend stocks. 

The US corporate debt market is $13T. It is now in stress. Corporation funding is entering crisis mode. Panic is the option. Corporate debt is higher than 2008, so BAA rates do not have to move that much to create a mess.  

A roll over of the US dollar cycle will benefit these bottoming cycles. Bitcoin, Stocks, Silver (and gold). Well just about everything

Original Post: https://ift.tt/3J6rZpB

The FED broke this.

Change in markets happens all the time, but how quickly things change can be the killer.


Now the news today is Oct 2nd 2022
- FED planning an emergency meeting on Monday, tomorrow.
- UK Gilt market blew up last week.
- BOE printing money to cover bond market losses, while hiking rates.
- European banking crisis news grows.

The US economy is 65% consumer spending, the largest asset the majority of consumer own is a house, the cost of money to borrow to buy a house has exploded. Seriously what do you (the FED) expect to happen next!

Sure fight inflation, over time, but not by next week.

The leveraged will blow up. This news has just started (with UK Bond market).

Watching and waiting.

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