$2k Stimulus? Republicans Afraid?
The U.S. House passed the $2k stimulus check upgrade off to the senate, where it is widely anticipated that the Republicans will commit political suicide in the next election and vote against this measure. What’s interesting is that this increase will continue to shed light on the belief that MMT would work and that deficits and debt don’t matter. However as Austrian’s and long time readers of this letter know, in the end, everyone is accountable and nothing in life is free. Trust us when we tell you, that if its handed to you, its not worth it, your giving something up, physically or psychologically. Don’t get us wrong, this is an absolute must as the government has forced its will “for the good of the people” of course to suspend, life, business, etc and yes, there is a cost that govt should bear at this point. However we are afraid that this could lead to a continued push for MMT and emergency measures may just become a common household yearly occurrence! That is something none of us should want.
Anyhow the equity markets sure like the idea and why not, the momo-algo’s will run wild front running all the Robinhood, Fidelity, E*Trade you name it broker/retail order flows. Here is the current look from Tradingview.com:
We have been noticing the Tech sector outperforming a bit here as key names once again become the focus. You will also notice the Russell2k is lagging both the SP500 and Nasdaq and some profit taking in those spreads may start to spill over into a reversal of that value preference move. However that is still too early to call but some chips off the table in those spreads makes sense.
Also with Silver’s big outperformance yesterday, its giving back just a bit in the metals complex vs Gold this morning but the spread still hovers at 71.6x (Gold/Silver):
We continue to see low rates effect housing positively as this mornings number was a blowout as Bloomberg reports that the 20-City Composite screamed 7.95% higher YoY one full percentage point higher than expectations!
The fastest rate of acceleration since 2014. Home prices rose 1.6% from the previous month. So, record low rates are helping out considerably and at a time where everyone everywhere is looking to shed costs and save money, reducing one’s mortgage is a great place to start, especially as values are and continue to rise. Maybe you could also look at it another way, if values are rising than perhaps its a good time to downsize, shed costs and readjust ones balance sheet? The uncertainty that 2020 brought has most likely shifted society and business as a whole to a varying degree that nobody would have expected. Quantifying 2020 is a task all unto itself and with so many uncertainties to consider going forward, let’s just say, being nimble and thrifty may be the axioms of the future.
Finally let’s touch upon Coinbase’s decision to suspend the digital listing of Ripple or XRP as its widely known. As Cointelegraph reports,
Major cryptocurrency exchange Coinbase will suspend trading for XRP in response to the United States Securities and Exchange Commission taking legal action against Ripple
This crushed the price of XRP by 36%:
We can’t help but think the global central banks panic when it sees the space explode like it has. XRP is not BTC or Bitcoin, please do not confuse the two at all whatsoever! Bitcoin is the gold standard technology and protocol and it has been since the beginning. To dabble in these altcoins is risk and we don’t advise it generally, but who are we to tell you what to do? One thing we are certain, the concept of decentralized, immutable, cryptographic utility is anathema to a fiat/debt based system and one that the controllers will not take lightly, so expect an onslaught, a battle to defame, denigrate and destroy the digital space at all costs. However, it will be a fleeting attempt as its a concept that cannot be corrupted at least in our minds!
Anyway hope you learned something today, we hope you have a great New Year and we hope you share and support our work here, Cheers everyone!
-Magnelibra Econemotions
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