Evergrande, Just More of the Same
Buy Zones in Equities are here!
We won’t beat this obvious dead horse to death as our readers should be well known to Chinese ghost cities and ghost clients and revenues for that matter. One look at the Chinese vs US bank deposit growth over the last 2 decades should paint a very obvious, or should we say ominous inflationary picture:
So 2x growth for the US and 4.3x growth for China since 2009. (Death to the US Dollar chanting crowd promptly exit stage left) Exactly where do all the deposits end up going to? Sterilized of course, and into the coffers of the ever and ongoing beneficiaries known as the top 0.1%. These short term explosions of debasement mask a serious and misaligned concept known as quantitative easing. It is the only tool that global central bankers utilize really. Why? Because its easy, its effective and by the time anyone figures anything is wrong, decades pass and non the wiser.
Well nothing in life is free and inflation via QE is not new, its the only playbook that has been used and its intent is not growth, but concentration of power. Its the only logical conclusion we can make for such monetary lunacy. If we don’t then we can only define its destructive means by debt enslavement and labor devaluation ultimately leading to authoritarianism and socialism. It is obvious to us that the global central banking cartels can no longer hide this lunacy and companies like Evergrande aren’t anomalies, rather they are the norm in a house of cards built squarely on the foundation of unsound debt money. We knew better, we always knew better and its why Andrew Jackson fought so hard against this type of centralized control of money.
So take that last chart of bank deposits and realize the massive devaluation of general labor that continues to get discounted. By the time the commoner realizes they have been duped, Universal Basic Income will become the norm, because its the only way to continually allow for the game to continue. Look at the massive labor shortage today, why would anyone want a simple job, with simple pay when the government will pay you nearly $85k for doing nothing, subsidized by massive debt growth.
Alas we digress and rather, we will just continue to expect higher highs from the following chart:
REMEMBER DEBTS DONT MATTER ONLY SERVICING THEM MATTERS AND SERVICING REQUIRES MORE AND MORE DEBT AT LOWER AND LOWER INTEREST RATES
Alright so some of our technical buy zone areas are now here in equity land and relative value players will begin to step in as they have time and time again. Remember in the world of trading and investing there are opinions a many, but the reality is you only have 3 choices, Buy, Sell or do nothing. It is really that simple and your rules should be clearly defined, parameterized and automatic if possible. The trend in money is obvious, print until further notice, which means asset prices and asset inflation is also the beneficiary of this labor and monetary devaluation trend.
Devaluing money and inflating assets go hand in hand, basic economics. As you print more and more, you devalue money more and more and asset prices rise. Your labor gets discounted, your bags of chips get smaller and smaller or maybe the bag gets bigger but the content gets smaller and smaller. Yep that’s how you hide inflation, yet real families that buy groceries, gas etc. don’t need to be told the truth, they live it.
Alright so with all this fear in mind let’s look at the charts:
We are going to start with Crude Oil where $76 has proven too much and the third wave down which was met with a run back up to $72 is acting as if its trying to hold the line. $69 is our key here below = weakness and above sideways to higher:
The SP500 hit the 100eMA and relative value types salivated at this opportunity and why not, the trend is your friend, and nothing calms global fears more than a snap back rally of 100 SP points off the lows:
The Nasdaq is still well within the longer term inflationary trend that has defined it for quite some time, in fact one look at this chart and you barely notice 500 point sell offs anymore, yep that’s our reality folks. You are either onboard or you are missing the boat, that’s what the FED has been saying for decades:
The DAX has hit the triple buy area denoted by 15000 which has been defended each and every time down:
Silver has also hit the radar here and a level that should see decent long term metal bulls willing and able to mop things up here:
Finally we leave you with Natural Gas, yes we know Hurricane Ida did its supply side damage, yet the calls for colder winter (Wait global warming) has some giddy about the prospects of $10mmBTu or even $15! Well $5 has seen the last few spikes slowly wound down and generally we attribute these moves to hedge funds sniffing out weaker funds and forcing their hands:
Also on the science note, keep La Palma on your Tsunami dashboard, talk of island slip and East Coast US Tsunami’s keep filtering the global social media sites. Although the prospect for this to occur is always there, the odds are not. The Canary Islands Volcano has erupted in the past and the island has not broken apart. A quick slip would be required and the type of magma release we are seeing should be welcomed given the release of pressure seems organized and steady at this point. A Tsunami would require the island to displace rapidly, which would send a massive wave outward, yet there are no indications of something like this at this point. However the odds of it occurring or the potential of such occurrence is still there which means we have to stay on top of this. When Magnelibra sees natural forces like this, it always reminds of us of exactly how insignificant mankind truly is in the big scheme of things here on Earth, how much control do we really have? One look at this picture for us says, not so much:
Alright good luck today everyone, stay on top, stay focused and get it done!
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