Dow:Gold 1:1 (Silver Surfer {Investor})

bond fund manager / tightrope walking line between serious market takes & securities fraud worthy memes / NOT INVESTMENT ADVICE

[Dow:Gold 1:1 (Silver Surfer {Investor}) @nolanastout]

How do more dollars get created? Investment banks underwrite bonds from the treasury and flip to the Fed. Wall Street get billions of risk-less dollars to bid up financial assets, main street gets stuck with rising consumer prices from inflation. #Wealthgap

[Dow:Gold 1:1 (Silver Surfer {Investor}) @nolanastout]

*robot voice*

70 dollar barrel oil

[Dow:Gold 1:1 (Silver Surfer {Investor}) @nolanastout]

...because if they give an inflation target, they know that they will have to keep moving the goalposts because they know there's no chance that they can raise rates in an economy this leveraged without all markets crashing within 6 months of rate hikes.

[Dow:Gold 1:1 (Silver Surfer {Investor}) @nolanastout]

#Powell and #Yellen will say that the Fed has the tools to fight inflation and will use them when necessary. Of course they have the tools to fight inflation, but they will never do it. The Fed loves to talk about raising rates, but won't ever give any specific guidance...

[Dow:Gold 1:1 (Silver Surfer {Investor}) @nolanastout]

When the #Fed and the #Treasury both reassure the public that there is nothing to worry about with respect to inflation, that is the sign that you should be worried about inflation.

[Dow:Gold 1:1 (Silver Surfer {Investor}) @nolanastout]

who needs to travel the world when you get 5 free rounds of #geoguessr every 24 hours

[Dan Held @danheld]

Official US inflation rate: +1.5%

Oil +80%
Corn +69%
Steel +145%
Wheat +25%
Coffee +34%
Cotton +35%
Copper +50%
Lumber +126%
Soybeans +71%
Home Values +8%
Stock Market +23%
Money Supply +24%

h/t @redditinvestors

[Dow:Gold 1:1 (Silver Surfer {Investor}) @nolanastout]

High interest rates encourage savings,
savings enable capital investment,
capital investment creates employment opportunity, employment creates goods and services,
goods and services create wealth accumulation,
wealth accumulation creates low interest rates

[Dow:Gold 1:1 (Silver Surfer {Investor}) @nolanastout]

If the Fed failed to sell off its $4.5T of debt after Great Recession, how can it possibly sell off its $8T of debt now? Interest rates are even lower and the economy is in much worse shape. The markets will soon call the Fed's bluff, causing bond yields and gold to soar.

[Dow:Gold 1:1 (Silver Surfer {Investor}) @nolanastout]

If the US actually wants to end the wealth gap, the solution is quite simple - the Fed has to stop printing money and buying bonds. Asset prices would enter deflationary crash as interest rates soar. The poor may lose their jobs, but the 1% might lose their entire net worth.

[Dow:Gold 1:1 (Silver Surfer {Investor}) @nolanastout]

The money printing directly increases the wealth of the "1%" because these people own assets like stocks, bonds are real estate that are propped up by 0% interest rates. The money printing causes their assets to appreciate so that they can cash in massive paper gains.

[Dow:Gold 1:1 (Silver Surfer {Investor}) @nolanastout]

The money printing by the Fed is a tax on people who earn income via wages & salaries - low and middle income people. The real value of their pay decreases as the money printing pushes up their cost of living. They cannot afford assets that are propped up by 0% interest rates.

[Dow:Gold 1:1 (Silver Surfer {Investor}) @nolanastout]

@FyreRob It won't matter, because as Chinese stop buying dollars, and keep their goods within their own borders, the RMB will appreciate against the USD which will allow their consumers to enjoy a higher standard of living and be able to outbid US consumers in international trade.

[Dow:Gold 1:1 (Silver Surfer {Investor}) @nolanastout]

Once foreign creditors dump their treasuries into US, bond yields will soar crashing the entire US sovereign debt markets and corporate debt markets. Soaring interest rates will pressure Fed to print even more money accelerating inflation even further to prop up bad debt assets.

[Dow:Gold 1:1 (Silver Surfer {Investor}) @nolanastout]

Rising bond yields are not negative for gold & silver per se. Only rising real interest rates are negative for gold & silver because if you are earning a negative return on your $, you might as well just own a rock that you store in the ground, because it is immune to inflation.

[Dow:Gold 1:1 (Silver Surfer {Investor}) @nolanastout]

Clarification: *Assets that are immune to US interest rate risk*.

All of the below assets are affected by interest rates in general. but can help to hedge an investment portfolio against US interest rate risk if owned outside of US markets.

[Dow:Gold 1:1 (Silver Surfer {Investor}) @nolanastout]

"Interest rates are like gravity in valuation" - Warren Buffet. When your economy has been at the 0% for this long, it is no coincidence that asset prices are crazy. You need to own assets that are immune to interest rate risk. Foreign stocks, foreign real estate & commodities

[Dow:Gold 1:1 (Silver Surfer {Investor}) @nolanastout]

The Fed only does 3 things:
1 - Talk about raising interest rates, but never actually doing it
2 - Talk about being apolitical, but always enabling massive deficits
3 - Talk about not monetizing debt, but printing money and bailing out reckless creditors and speculators

[Dow:Gold 1:1 (Silver Surfer {Investor}) @nolanastout]

"Interest rates are like gravity in valuation" - Warren Buffet. When your economy has been at the 0% for this long, it is no coincidence that asset prices are crazy. You need to own assets that are immune to interest rate risk. Foreign stocks, foreign real estate & commodities

[Dow:Gold 1:1 (Silver Surfer {Investor}) @nolanastout]

Higher interest rates will put huge downward pressure on US stock market, as it is dominated by tech stocks that have sky-high valuations with no dividend yield or profits. When you discount cash flow streams to present value using higher IR's growth stock valuations plummet.

[Dow:Gold 1:1 (Silver Surfer {Investor}) @nolanastout]

Foreign nations will only continue to export to US as they demand our dollars. As we print them by the trillions, they are becoming increasingly worthless. Pretty soon the Chinese & other nations will demand actual goods instead of worthless paper currency.

[Dow:Gold 1:1 (Silver Surfer {Investor}) @nolanastout]

US has never had larger goods trade deficits in its entire history. Media spins this as sign of a strong recovery. Only weak economies run consistent trade deficits as they depend on rest of world to do their work for them. Consumption is fun part, production is hard part.