Stocks and precious metals rallied going into year-end last week. The US Dollar continued its decline. Stocks remain overbought although they can remain overbought for quite a long period of time. Fed policy remains extremely accommodative and a continued rally in stocks and metals is possible due to money creation.
The Federal Reserve’s balance sheet began the calendar year 2020 at $4.2 trillion; it’s now $7.3 trillion and growing. Should the recently passed spending package become reality, add another couple trillion, give or take, to that total.
The lockdowns occurring in much of the country continue to wreak financial and economic devastation. There is now much data that confirms lockdowns don’t reduce the spread of COVID-19 but they have caused massive amounts of economic damage, much of which is now irreparable.
The current level of money creation is completely unsustainable. History teaches us that money printing always ends badly and the end of the cycle sees money printing occurring in exponentially greater amounts.
The December “You May Not Know Report”, to hit the mailboxes of clients and subscribers in a couple of weeks or so, is a forecast issue titled “Capitalizing on Uncertainty”. There is certainly no shortage of uncertainty at the present time. This week, we’ll give you a brief preview of the December paper-and-ink newsletter.
The World Economic Forum, a group of world elites, meets each year in Davos, Switzerland to discuss and purportedly solve the problems facing the world. The Great Reset is an openly stated goal of this group.
With the US election still dominating headlines, we scoured the news this past week and found some stories we thought we’d share and ponder.
The US Election is not yet “in the books” as we write this issue of “Portfolio Watch”, nor do we expect it to be anytime soon.
Our topic for this week is debt. It's important to measure and monitor the amount of debt that exists in the private sector and compare it to the level of production occurring. It is this trend that impacts the economy more directly than public debt accumulation and money creation.