2020 Predictions.....
I think that this is what you all wait for right. My thoughts for the beginning of the year which usually carry through until the end of the year or fourth quarter.
I bring you back to the bond market (in specific the 10 Year US Note) as it is the most liquid market in the world. You already know that the market has been sideways for a long time. Going back to roughly 2007. Yes, it has moved up and down but in a controlled range. Neither getting too high nor getting too low. As this chart is an inverse relation to rates on the futures market you can see that it approached all-time highs this year or lows in the futures markets. In 2020 I would look for it to bounce back from the sell-off (that I did warn you might be taking place soon a few months back) but it should be bouncing back for rates to go a little lower before making a turn and heading back higher.
The problem we have at the moment is in the debt markets which is why the fed is dumping so much money into the market at this time and will continue to do so for a few months yet. At the end of a lending cycle, this is what happens as you remember me talking about this earlier and not to worry too much.
As a result of QE being implemented the stock markets will continue to move sideways to up. The rich will get richer and the rest of us will get moderately more wealthy if you own assets and are in stocks (which a lot of people are not).
The big question on everyone's mind is gold because it shot up this year without falling back down. Gold can still hit around 1726 or so an ounce without there being much of a problem but if it starts to head higher and break the all-time highs against the US Dollar we might be in trouble for some inflationary pressures. As I said I don't see commodities as a screaming buy even though the CRB is near all-time lows.
The big problem continues to be debt. Mounds and mounds and mounds of it. Personal, corporate and government are the biggies but car loans, student loans and credit cards continue to plague the little guy. He's up to his ass in debt and I am not really sure where it goes from here.
Will they forgive him forcing the credit card companies to eat losses?
Will they forgive the student loans?
Will the auto market implode?
I don't really know. I would have thought that it would have happened long ago but it seems that interest rates are keeping the ponzi going. Which brings us to negative rates.
Do I see rates heading to negative like in Europe and Japan?
Possibly. That is the only way you swallow up the debt but I am not sure they will get there this year.
This debt experiment has been going on for quite some time. It will be interesting to see if it plays out for the better. I doubt it because I can't see how it can other than helicopter money or a debt jubilee but maybe there is more funny accounting I can't yet see?
You can sit and fret over this or simply move forward with your life and hope that these problems work their way out. Do what you can to help but don't build any bomb shelters just yet.
What is my own portfolio look like?
1) Been long gold since around 1200
2) Long Silver
3) Long Stocks especially in the NASDAQ
4) Flat on Commodities but this could change soon
5) Still long real estate and have been for a long time.
6) Short Bitcoin but neutral at the moment.
7) Long EUR/USD
You can see by the chart below that I think that yields will move slightly lower but then will reverse over the next couple of years. I hope that you enjoyed this and stay tuned. Wishing you all the best for a prosperous and happy 2020.
I bring you back to the bond market (in specific the 10 Year US Note) as it is the most liquid market in the world. You already know that the market has been sideways for a long time. Going back to roughly 2007. Yes, it has moved up and down but in a controlled range. Neither getting too high nor getting too low. As this chart is an inverse relation to rates on the futures market you can see that it approached all-time highs this year or lows in the futures markets. In 2020 I would look for it to bounce back from the sell-off (that I did warn you might be taking place soon a few months back) but it should be bouncing back for rates to go a little lower before making a turn and heading back higher.
The problem we have at the moment is in the debt markets which is why the fed is dumping so much money into the market at this time and will continue to do so for a few months yet. At the end of a lending cycle, this is what happens as you remember me talking about this earlier and not to worry too much.
As a result of QE being implemented the stock markets will continue to move sideways to up. The rich will get richer and the rest of us will get moderately more wealthy if you own assets and are in stocks (which a lot of people are not).
The big question on everyone's mind is gold because it shot up this year without falling back down. Gold can still hit around 1726 or so an ounce without there being much of a problem but if it starts to head higher and break the all-time highs against the US Dollar we might be in trouble for some inflationary pressures. As I said I don't see commodities as a screaming buy even though the CRB is near all-time lows.
The big problem continues to be debt. Mounds and mounds and mounds of it. Personal, corporate and government are the biggies but car loans, student loans and credit cards continue to plague the little guy. He's up to his ass in debt and I am not really sure where it goes from here.
Will they forgive him forcing the credit card companies to eat losses?
Will they forgive the student loans?
Will the auto market implode?
I don't really know. I would have thought that it would have happened long ago but it seems that interest rates are keeping the ponzi going. Which brings us to negative rates.
Do I see rates heading to negative like in Europe and Japan?
Possibly. That is the only way you swallow up the debt but I am not sure they will get there this year.
This debt experiment has been going on for quite some time. It will be interesting to see if it plays out for the better. I doubt it because I can't see how it can other than helicopter money or a debt jubilee but maybe there is more funny accounting I can't yet see?
You can sit and fret over this or simply move forward with your life and hope that these problems work their way out. Do what you can to help but don't build any bomb shelters just yet.
What is my own portfolio look like?
1) Been long gold since around 1200
2) Long Silver
3) Long Stocks especially in the NASDAQ
4) Flat on Commodities but this could change soon
5) Still long real estate and have been for a long time.
6) Short Bitcoin but neutral at the moment.
7) Long EUR/USD
You can see by the chart below that I think that yields will move slightly lower but then will reverse over the next couple of years. I hope that you enjoyed this and stay tuned. Wishing you all the best for a prosperous and happy 2020.
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