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August 15 2022 3:27 AM ˚
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The world is sinking with money, literally. Where should you keep your eyes?

The economy, at this time in history, will be marked by the folding of a monetary theory, if I get to write history at least. This financial cycle will yield either one of the biggest successful proof
The economy, at this time in history, will be marked by the folding of a monetary theory, if I get to write history at least. This financial cycle will yield either one of the biggest successful proofs of concept or it could be one of the biggest disasters in modern financial history. (Photo: Unsplash)
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The economy, at this time in history, will be marked by the folding of a monetary theory, if I get to write history at least. This financial cycle will yield either one of the biggest successful proofs of concept or it could be one of the biggest disasters in modern financial history.اضافة اعلان

What is really going on with the markets today is simple: Everything on the balance sheets is going up. Just like your start-up took a hit a couple of Februaries ago, so too did large companies, SMEs, home businesses, and even nations. Thus, the world’s dominant financial market influence — a position that can be earned by any nation large enough a producer/consumer to dwarf all others — reflected its way of doing things to the rest of the world. This is exactly what I meant in my previous piece by impulsive action of monetary policy makers influenced by millennial behavior. Almost $9 trillion was injected into the US economy alone through the financial market system.

Since the start of the pandemic, central banks all around the world have been binging on debt. These new market whales now own some $24 trillion of assets in every angle of every capital market, money market, and financial market around the world. These mass expenditures have really overdriven the money prints (servers) and magnified the velocity of money because there is simply too much of it. You can also notice this in the stance of the US Federal Reserve, which consistently delivers the promise of not cheap money, but a lot of money. It also delivers an even more important massage. The desperate affirmation that nothing is happening too quickly. It is more important for monetary policy makers to deny the speed at which things are happening than it is to deny their magnitude in order to not cause panic.

Unfortunately, the opposite of a panic is happening. Prices are climbing and the stock markets are spiking out of order, having crashed hard during lockdown. Some economists have speculated there will be a V shaped recovery, while others have speculated about an L or U shaped one for the economy. However, we have broken historical records over and over again out of not thin air, rather it was the money in the air! And now big banks might be hooked on it. A dance with the devil every time J. Powell speaks.

One may wonder why the market is the talk of the town or why things are going wild. Bitcoin and speculative meme stocks have broken percentage records, US indices are breaking highest figure records, and commodities are hitting record volatility. This really is how deep fundamental analysis begins, by the way. There is increased demand for speculative, sophisticated investments usually is driven by younger risk investors with a huge appetite by quick gains and incredibly high marginal returns. These are the guys trying to make a 9,000 percent return on a $50 investment on a leveraged penny stock, option trade, or cryptocurrency swap. The nature of traders on this side of the market drives them to carry high risk, so they often either get their targets quick or lose all their money quicker. US indices represent the global demand for investing in US companies in favor of other countries, given that said economy continues to become more expensive to buy into. Indices also represent domestic demand to participate in the private sector economy.

Finally, commodities break down into two types: Utilitarian or safe haven. An example would be coffee vs gold. High volatility in safe havens indicates either uncertainty in risk assets or over optimism in risk assets. They are also an indicator of increased industrial activity.

These indicators are tilting towards a warning zone of fear, uncertainty, and despair in the market which really should be a reason we begin positioning our portfolios much more defensively, to capitalize on weaknesses in safe have commodities such as precious metals and take advantage on short-term swings in main energies like WTI oil and natural gas. These are moving in a reasonable direction with substantial opportunities in both the upward and downward direction.

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