Americans today might be forgiven for wondering whether the train they’re taking is headed for the gala or the gulag. Progressives in particular and optimists in general feel that our return to good times is right around the corner. Conservatives in particular and realists in general fear a Wile E. Coyote plunge off a cliff around that same corner. Could they be farther apart?
The same division of sentiment exists in the financial world among investors. Some think the bull market is back; others see bearish factors remaining dominant. The same data points yield one conclusion for some and another for others. One might be excused for wondering if they’re from the same planet.
Despite their personal optimism in life, the McAlvany analysts insist on following the facts as they view the markets. Those facts can be confusing. They can be inconclusive for uncomfortable periods of time. They can point to conflicting conclusions for a while. They can be exasperating—even maddening.
Yet, for the disciplined, persistent, unemotional, experienced, and skillful analyst, they eventually tell their story. And the story they tell is the truth about what can happen—not necessarily the whole truth and nothing but the truth, but enough truth for thoughtful people, using effective strategies, to act, to minimize their risk, to maximize their opportunity, and to optimize their return.
As they pursue this process, the analysts share their thoughts with others—with you—via the communications below. Not many professionals do this, and especially not many with the same view of the world and markets. This is immensely valuable information, and it’s yours for the reading or listening. Don’t let the opportunity get away. Just click on one or more of the links below.
- True or false? The solution to a debt problem is more debt
- Consumers are taking it on the chin, but still in the fight
- If discipline doesn’t work, try a little magic
- Don’t let this one get away from you
The McAlvany Weekly Commentary: The advice is wise that tells us to walk in the ancient paths. That doesn’t mean living like the Sumerians of old, of course. It means that character, hard work, and honest dealing matter. Much easier is the modern method of relying on the government to take money from other people and give it to you. Of course, those who choose Door #2 eventually find that the government always takes much more than it gives. That’s just the nature of government. It’s not a productive enterprise. It doesn’t make any money. It takes money—and people, property, etc. The more it’s tasked to do, the more it has to take (and of course, it’s happy to do so). David and Kevin take a look at those who want government to do more—most of our current leaders, most of our fellow citizens, and especially the advocates of Modern Monetary Theory, Keynesianism, socialism, communism, fascism, and their variants. These are the people who have constructed our current economic situation, and of course they believe the way out is via the hair of the dog that bit them. After all, that always works well for people who party too hard. Just ask their bosses the next day.
Credit Bubble Bulletin: In the aftermath of the latest FOMC meeting in which the fed funds rate was increased by a sharply lower .25%, markets have responded exuberantly. Other actors in this very big play have been more restrained. They watch as inflation begins inching up again and monetary conditions loosen significantly. Down on Main Street, things are not rosy. Doug cites data sources that indicate personal debt is at highs not seen for decades, and credit card debt has hit an all-time high. These statistics occur amid a strong increase in retail sales. Perhaps consumers merely wish to maintain their standard of living until lower prices return—they hope. Or perhaps they wish to eat, drink, and be merry, for tomorrow the good times die. Doug’s take is sobering: “I believe the world is transitioning to a new cycle. Expectations that inflation conveniently returns to previous cycle dynamics is wishful thinking. Hopes that central bankers can quickly conclude tightening cycles without the need to inflict pain are unrealistic.”
Hard Asset Insights: Morgan finds the perfect sobriquet for the markets’ view of life after QT: Magical Disinflation Theory. Says he of the hopeful view, “Magic disinflation would, in theory, enable an imminent end to the Fed hiking cycle, a subsequent Fed pivot to stimulative rate cuts, a soft landing for the economy and markets, and a resumption of the good old bull market bubble days of recent years. The scenario has mouthwatering appeal for market bulls. It’s neat, tidy, and conveniently pleasing—but it’s also, unfortunately, totally fanciful.” In this day of market strategy based on unicorns, rainbows, and pixie dust, perhaps pigs can fly. Perhaps people from the government really are here to help us. And perhaps, Virginia, there is a Santa Claus. Morgan might advise you not to base your entire investment strategy on such hopes. Of course, as always, his analysis entails much more than this. Click the link and see for yourself.
Golden Rule Radio: Tory and Robert further their discussion from last week, observing that the gold market behaved as they expected it to since then. The upshot is that a very real buying opportunity is apparent. However, they caution against trying to time the optimum moment to buy. Price is only one factor. Protection is far more important, and that is the consideration they are maximizing with clients. They share their strategy for getting clients into gold at this time, which will meet both price and protection criteria and will also benefit listeners. The hosts’ advice on buying and selling in general is timeless and immensely important for those trying to buy at the bottom and sell at the top. The hosts also look at Elliott Wave theory to see where the gold price might go in the next several months.