Gold has been moving quite similarly to a meme stock
or a cryptocurrency in times where it should be spiking to higher highs. September
shall hold the day of reckoning in its belly.
اضافة اعلان
I have been monitoring the market on a daily basis
for the past eight and a half years, from crypto to exchange traded funds,
bonds, metals, commodities, US stocks, Asian stocks, European indices, you name
it, and nothing has been more clear: The world’s financial markets are so
overpriced there is no possible way the majority of money in the system is
real.
In other words, debt has been going so deep into the markets that I
believe today it is the main force steering the market. But if we know one
thing about debt, it’s that it’s cyclical.
Think about it this way: When you
take out a loan or receive a paycheck you go through a cycle of opposite
emotions, with two extremes; one being comfort, the second being worry.
This
basic human psychology is actually the basis for the scientific measure of
default rates on loans!
The level of anxiety and the chances of you
defaulting on your loan grows as you take on more loans.
If you finance your
home, your car, and your bills, you’re probably running on the high extreme of
worry and missing a payment on one of those loans.
Market participants have
been going into credit to finance their Apple Inc.
holdings, Amazon,
TENCENT,
Dow Jones 30, Bitcoin, and so on. They have been going at the market with such
appetite that it actually tilted the scale and the infinite price increase
became it own self-fulfilling prophecy — so much so that it turned people like
me (risk aversive, long-term investors) to doubt their own strategy for a moment
and genuinely worry about mistiming the market cycle!
When you hear
gold bugs calling out a crash in the
markets with a tone of concern, doubt, and fear, know for a fact that this is
what FUD is.
This is happening now. The fundamental economists are doubting
their strategies, doubting their timing, growing more afraid of the future, and
reducing their holdings in safety havens by either outright cost cutting or
diversifying into high-risk, high-volatility instruments like US indices and
Bitcoin.
FUD only matters when the real market participants
are afraid. That’s when there’s blood in the water and that is when you should
jump in.
Warren Buffet is famous for his saying “Be greedy when others are
fearful.” What he really meant to say is buy when everyone that matters is
fearful.
I believe if gold closes above its 200-day moving average (over $1,800/ounce)
by the end of September — which is a monumental phase in the global debt cycle
— the stock market will invert and begin crashing, and precious metals and risk
aversion instruments will begin a rally that exceeds the previous all time
highs or above $2,000/ounce.
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Opinion and Analysis
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