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Thread: Make Money

  1. #1

    Make Money

    These dips will be bought by the Fed, or by people financed one way or another by the Fed.

    There will be no lasting decline in most asset prices, because that is politically unacceptable, for both parties.

    If you would like to help the cause, make as much money as possible.

    I'm not too keen on Ayn Rand, but her point about helping the poor by not being one of them is apt and apropos.

    Godspeed

    "Democracy is the theory that the common people know what they want, and deserve to get it good and hard."

    -H. L. Mencken



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  3. #2
    To clarify, don't be like these Robinhood fellows (mindlessly buying max out the money calls on the indices).

    They just got their heads chopped off today.

    Be smarter.

    What's on sale?
    "Democracy is the theory that the common people know what they want, and deserve to get it good and hard."

    -H. L. Mencken

  4. #3
    The rule of thumb is that $25 billion in QE equals one beep on the 10YUST.

    It closed today at about 70.

    So, 70 x 25 = $1.75 trillion to bring the 10Y down to 0.

    The federal debt so far, first five months of this year, is about $4 trillion.

    Let's be conservative and only take half of that again, $2 trillion, for the rest of 2020; that will put US rates slightly negative.

    And that will kill the dollar.

    So, fellows, tell me what is the prudent investment?
    "Democracy is the theory that the common people know what they want, and deserve to get it good and hard."

    -H. L. Mencken

  5. #4
    Quote Originally Posted by r3volution 3.0 View Post
    The rule of thumb is that $25 billion in QE equals one beep on the 10YUST.

    It closed today at about 70.

    So, 70 x 25 = $1.75 trillion to bring the 10Y down to 0.

    The federal debt so far, first five months of this year, is about $4 trillion.

    Let's be conservative and only take half of that again, $2 trillion, for the rest of 2020; that will put US rates slightly negative.

    And that will kill the dollar.

    So, fellows, tell me what is the prudent investment?
    They'll leave the rate where it is for a couple years. They don't have many other viable options .

  6. #5
    Fed has said they wont go to negative interest rates or change rates until 2023. They are expecting the highest growth since 1984 in 2021 . I have no idea but I don't see rates moving .

  7. #6
    Quote Originally Posted by oyarde View Post
    They'll leave the rate where it is for a couple years. They don't have many other viable options.
    Quote Originally Posted by oyarde View Post
    Fed has said they wont go to negative interest rates or change rates until 2023. They are expecting the highest growth since 1984 in 2021 . I have no idea but I don't see rates moving .
    I don't see the Fed going to a negative rate on excess reserves, but that's different than treasuries going negative. No doubt the Fed understands that they need treasuries to have a positive spread to foreign bonds to draw foreign cash into the US to support the dollar, but the reality is they will need to print lots and lots more money to keep this zombie economy afloat, and I don't know how they do that without pushing treasuries negative, even if they don't actually buy treasuries (say if they buy junk bonds instead). Then again, this problem might have something to do with Powell begging Congress to spend more on waste stimulus, as that would have a similar effect to more QE but without the downward pressure on treasury yields (rather the opposite). We'll see what shenanigans they can manage, but in the end it all leads to the same place: lower growth, higher inflation.
    "Democracy is the theory that the common people know what they want, and deserve to get it good and hard."

    -H. L. Mencken

  8. #7
    Quote Originally Posted by r3volution 3.0 View Post
    I don't see the Fed going to a negative rate on excess reserves, but that's different than treasuries going negative. No doubt the Fed understands that they need treasuries to have a positive spread to foreign bonds to draw foreign cash into the US to support the dollar, but the reality is they will need to print lots and lots more money to keep this zombie economy afloat, and I don't know how they do that without pushing treasuries negative, even if they don't actually buy treasuries (say if they buy junk bonds instead). Then again, this problem might have something to do with Powell begging Congress to spend more on waste stimulus, as that would have a similar effect to more QE but without the downward pressure on treasury yields (rather the opposite). We'll see what shenanigans they can manage, but in the end it all leads to the same place: lower growth, higher inflation.
    I would expect more printing , junk bonds and infrastructure spending

  9. #8
    Quote Originally Posted by oyarde View Post
    I would expect more printing , junk bonds and infrastructure spending
    Yep

    Remember when Hillary and Trump were trying to outbid each other on shovel ready boondoggles back in 2016?

    I'd look for a big bill after the election, whoever wins.
    "Democracy is the theory that the common people know what they want, and deserve to get it good and hard."

    -H. L. Mencken



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  11. #9
    I'm expecting taxes to go through the roof when the sh-t hits the fan. Even if it doesn't by early next year, I still think the POTUS (regardless of Trump or Biden) will raise taxes significantly. Also, there could be a "windfall profits tax" where the government just takes like 90% of your profits because they think they deserve your money more than you do.

  12. #10
    Anyone have any thoughts on pot stocks? I read that it will start to be legalized more in 2021 (probably because the states will need the tax revenue more than ever).

  13. #11
    Quote Originally Posted by BortSimpson View Post
    I'm expecting taxes to go through the roof when the sh-t hits the fan. Even if it doesn't by early next year, I still think the POTUS (regardless of Trump or Biden) will raise taxes significantly. Also, there could be a "windfall profits tax" where the government just takes like 90% of your profits because they think they deserve your money more than you do.
    Taxes in general, for the vast majority of people, aren't likely to rise; it's much easier politically to just print money.

    A "windfall profits" tax is a real possibility though.

    That's about the only thing that worries me about precious metals related investments.

    "Gold bugs" would make good scapegoats.

    That's not a concern any time soon, IMO, but if gold goes to $5000, for instance, I'd be thinking about an exit strategy.
    "Democracy is the theory that the common people know what they want, and deserve to get it good and hard."

    -H. L. Mencken

  14. #12
    As for exit strategies...

    It's fairly easy to vault precious metals overseas.

    It's more difficult but still possible to hold cash or securities overseas.

    At the extreme, it's quite possible to literally purchase citizenship or at least residency in a number of countries, and for less than you might think.

    Note that I'm talking about perfectly legal activities here.

    I think it would behoove any sensible investor these days to makes some contingency plans.

    For instance, it might be a good idea to make a short list of countries with easy visa laws and tolerable tax regimes.

    I somehow suspect that we're going to see a lot of expatriation from the US in coming years.

    Tyranny-avoidance tourism, as it were, looks to be a growth industry.
    "Democracy is the theory that the common people know what they want, and deserve to get it good and hard."

    -H. L. Mencken

  15. #13
    Quote Originally Posted by r3volution 3.0
    So, fellows, tell me what is the prudent investment?
    Lead and gun powder

  16. #14
    Quote Originally Posted by r3volution 3.0 View Post
    As for exit strategies...

    It's fairly easy to vault precious metals overseas.

    It's more difficult but still possible to hold cash or securities overseas.

    At the extreme, it's quite possible to literally purchase citizenship or at least residency in a number of countries, and for less than you might think.

    Note that I'm talking about perfectly legal activities here.

    I think it would behoove any sensible investor these days to makes some contingency plans.

    For instance, it might be a good idea to make a short list of countries with easy visa laws and tolerable tax regimes.

    I somehow suspect that we're going to see a lot of expatriation from the US in coming years.

    Tyranny-avoidance tourism, as it were, looks to be a growth industry.
    I think the US Government has been raising the price on expatriating over the years.

    And I've heard it mentioned that there could come a point where they might force you to pay for your share of the National Debt in order to be granted permission to leave.

  17. #15
    Quote Originally Posted by Working Poor View Post
    Lead and gun powder
    If this is the answer (and, sadly, I think it might be) then we're really in trouble. Basically society is going to seriously regress. It will be terrible to see.

  18. #16
    Quote Originally Posted by BortSimpson View Post
    I think the US Government has been raising the price on expatriating over the years.

    And I've heard it mentioned that there could come a point where they might force you to pay for your share of the National Debt in order to be granted permission to leave.
    Ron used to say that the walls would be used to keep us in; perhaps we'll be revisiting that topic in coming years.
    "Democracy is the theory that the common people know what they want, and deserve to get it good and hard."

    -H. L. Mencken



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  20. #17
    Quote Originally Posted by r3volution 3.0 View Post
    Ron used to say that the walls would be used to keep us in; perhaps we'll be revisiting that topic in coming years.
    Peter Schiff has said that quote was actually his (used during his Senate run) and that Ron copied it. But great quote regardless.

  21. #18
    The odds of the market taking a spill from these levels in the next quarter are very high. Probably holds until July 1 because funds will be buying stocks they missed for end of quarter window dressing. The only precedent for what is happening right now in terms of the sentiment extremes being hit is the tech bubble. I will post a number of indicators over the weekend.

    Maybe the Fed keeps things going in stocks but intermediate term the market is more vulnerable than I have seen.

    Tech stocks are divorced from reality. 100% chance Zoom and Shopify are 30 to 50% lower over the next 12 months. Shorter term Fastly will take a spill from 83. I don't care how good their product is.
    Last edited by Krugminator2; 06-25-2020 at 06:36 PM.

  22. #19
    Quote Originally Posted by BortSimpson View Post
    Peter Schiff has said that quote was actually his (used during his Senate run) and that Ron copied it. But great quote regardless.
    LOL, I seem to recall hearing that in 07, long before Pete's Senate run (Pete has a bit of a Columbus complex, much as I like him). Anyway, yes, this is an issue that people should take more seriously, especially people whose investments are essentially bets against the the US government. Regardless of the physical wall, the US government is likely to make it harder for money, and people with it, to leave as things deteriorate.
    "Democracy is the theory that the common people know what they want, and deserve to get it good and hard."

    -H. L. Mencken

  23. #20
    Quote Originally Posted by Krugminator2 View Post
    The odds of the market taking a spill from these levels in the next quarter are very high. Probably holds until July 1 because funds will be buying stocks they missed for end of quarter window dressing. The only precedent for what is happening right now in terms of the sentiment extremes being hit is the tech bubble. I will post a number of indicators over the weekend.

    Maybe the Fed keeps things going in stocks but intermediate term the market is more vulnerable than I have seen.

    Tech stocks are divorced from reality. 100% chance Zoom and Shopify are 30 to 50% lower over the next 12 months. Shorter term Fastly will take a spill from 83. I don't care how good their product is.
    Products?

    Profits?

    Revenues?

    Pish posh, how quaint.

    All we need is for the central bank to buy the shares, which they will do, if need be.

    All the deflationistas are dead wrong.

    They're operating on the assumption that this is a market economy, because they think it should be.

    And indeed it should be, which is why I like them, but it isn't, which is why Ill make the opposite bets, and drink their milkshake.

    Last edited by r3volution 3.0; 06-25-2020 at 07:34 PM.
    "Democracy is the theory that the common people know what they want, and deserve to get it good and hard."

    -H. L. Mencken

  24. #21
    Quote Originally Posted by r3volution 3.0 View Post
    Products?

    Profits?

    Revenues?

    Pish posh, how quaint.

    All we need is for the central bank to buy the shares, which they will do, if need be.

    All the deflationistas are dead wrong.

    They're operating on the assumption that this is a market economy, because they think it should be.

    And indeed it should be, which is why I like them, but it isn't, which is why Ill make the opposite bets, and drink their milkshake.


    I don't think you should fight the Fed.

    This guy has sent a variation of this Tweet for years and has been very prescient. One difference between now and the tech bubble is Greenspan actively deflated the bubble with tightening. Don't see that happening now unless inflation ticks up.




    That said, intermediate term (next 2-5 months, Nasdaq tech stocks overdue for a spill. Eventually people need a breather. Good data driven article on sentiment right now (from a source more credible than 99.8% of garbage posted on financial sites.)

    https://sentimentrader.com/blog/risi...ly--25-6-2020/


    Also this guy...










  25. #22
    The war on Gold has begun.

    https://oilprice.com/Metals/Gold/The...Has-Begun.html

    I am long on Lithium (LIT).
    When life itself seems lunatic, who knows where madness lies? - Miguel de Cervantes, (Don Quixote)

    Quote Originally Posted by Voluntarist View Post
    The tree of liberty must be refreshed from time to time with the Federal Reserve Notes of patriotic central banks

  26. #23
    Quote Originally Posted by r3volution 3.0 View Post
    As for exit strategies...

    It's fairly easy to vault precious metals overseas.

    It's more difficult but still possible to hold cash or securities overseas.

    At the extreme, it's quite possible to literally purchase citizenship or at least residency in a number of countries, and for less than you might think.

    Note that I'm talking about perfectly legal activities here.

    I think it would behoove any sensible investor these days to makes some contingency plans.

    For instance, it might be a good idea to make a short list of countries with easy visa laws and tolerable tax regimes.

    I somehow suspect that we're going to see a lot of expatriation from the US in coming years.

    Tyranny-avoidance tourism, as it were, looks to be a growth industry.
    I hope to be in that position someday. Can you list some countries where citizenship purchasing is doable? Also, those with easy visa laws? I did find Nevis where citizenship can be purchased for 100K last I looked. I think they called it citizenship by investment?
    When life itself seems lunatic, who knows where madness lies? - Miguel de Cervantes, (Don Quixote)

    Quote Originally Posted by Voluntarist View Post
    The tree of liberty must be refreshed from time to time with the Federal Reserve Notes of patriotic central banks

  27. #24
    Quote Originally Posted by Pauls' Revere View Post
    I hope to be in that position someday. Can you list some countries where citizenship purchasing is doable? Also, those with easy visa laws? I did find Nevis where citizenship can be purchased for 100K last I looked. I think they called it citizenship by investment?
    Take a look at Panama.
    "Democracy is the theory that the common people know what they want, and deserve to get it good and hard."

    -H. L. Mencken



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