“How is he still standing?” I asked.
“I think he’s on his 18th beer!” said another, “He’s a machine! Look at him go!”
I was thinking the same thing. He was a machine… he was crushing beers like there was no tomorrow.
And then he switched. To tequila. That’s when I thought he’d finally pass out.
But he didn’t! He just kept throwing them back… shot after shot.
It was still night, though. He was going to have a horrendous morning. The meanest hangover one could get… if he survived until then!
That’s the closest analogy I can think of to what’s happening with our economy.
We are “that guy.”
That annoying drunk guy at the bar who won’t stop drinking.
The only problem is that we are surrounded by people who are worse off than us. There’s all kinds of drunks buying shots for us… and we’re buying shots for them… and cheers are going out everywhere, “CHUG, CHUG, CHUG!”
That shift to tequila… that very bad choice, is what Yellen is about to do.
“…I would not completely rule out the use of negative interest rates in some future very adverse scenario…” she said that back in February, when we were somehow not in an adverse scenario.
She continued, “…policy makers would need to consider a wide range of issues before employing this tool in the United States, including the potential for unintended consequences.”
The only consequence Yellen sees to negative interest rates is she’ll be a loner if she doesn’t join the party. The negative interest rate party.
In all seriousness, she really doesn’t have any other choice… or at least she doesn’t think she has another option.
Former Fed Chairman, Alan Greenspan, sees it coming. The point when there is no return… when the tequila finally takes over.
He’s calling for a full blown crisis, unless we return to a gold standard (which is very unlikely to happen).
Jeff Gundlach (who manages a $100 billion fund in LA) agrees. He says to, “Sell everything. Nothing here looks good.”
Of course he doesn’t mean everything. He still “continues to hold gold, a traditional safe-haven, along with gold miner stocks.”
It’s similar to what I pointed out last week, where “Terrorism, Money Printing, High Gold Prices and Political Controversies” should NOT be pushing up the stock market.
But that’s exactly what’s happening. The threat of negative interest rates on the horizon. The warnings from Greenspan, the fears from multiple high level hedge fund managers, and the distortions in our bond market have all led to the market going higher.
Some people see what’s going on. Like you and I.
But, more will see it. They’ll be a little late, but more and more will start to catch on.
As this process happens, the rush into real assets will start to accelerate, which will continue to drive prices up. Gold, silver, real estate, art, and anything someone can buy and physically hold will see record prices.
Of course, following these record prices will be a huge drop. And then there will be record values. The cycle will always continue.
As Jim Rogers has said… Prices will go up higher and longer than anyone can ever imagine, while the inverse is true for the opposite direction when everything declines.
For you and I, this is exciting!
What an opportunity!
We don’t want to get stuck in the game of ‘timing it perfectly.’ But… our window to make a trade now and exit early is plenty big enough to avoid waiting until the last second.
I’m still trying to figure out this whole Italian banking mess. I haven’t figured out a (safe) way to capitalize on the impending collapse… maybe you have?