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BOINGGGGGGG!!! 3/20/20


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Now that the US Government has delayed Tax Day for 3 months, the April windfall won't happen. It will be spread out through the second quarter. The normal boost for the market that happens between now and mid May as the cash is processed into the Treasury account and used to pay down debt until mid to late May won't happen. 

Meanwhile, the Fed has boosted its Treasury purchases way beyond what they said they would do. RIght now they're buying more than the Treasury is issuing. 

Between the massive money printing and the helicopter money I think we'll get a stupendous wave of CPI inflation. 

A hyperinflationary depression. Wouldn't that be special. 

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Hoarders are still out and about but the powers-that-be have finally realized that it is not availability of goods but rather the curfew on trucks loading at distribution centres for supermarket delivery that is the problem.  Seems that local councils are cooperating by lifting the curfew so hopefully shelves might return to normal in the next few days.  There are even stories of city dwellers heading out to regional towns in vans and cleaning out small supermarkets. 

 

The madness of crowds!

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7 minutes ago, DrStool said:

A breakout through 2520, then a pullback touch and go  to 2460 would be a good long entry for a scalp. 

Top of 1 day uptrend channel is right here. 

 

That's exactly how it began in 2003 and 2009...

"It's only for a scalp!"

Who can say that we have NOT seen the ultimate price low? I am not talking about the inflation adjust one, that's another topic.

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I simply can not imagine how they will stage inflation in such an economic environment. When everything breaks down, from what and how should inflation arise? We are talking about a complete breakdown of an economy, not a shift from one sector to another sector or something like that.

Those crazy moves in bonds, yields, fx and so on are due to market imbalances I guess. It is only my guess I have to say I have no further information what is really going on in the background.

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What's going on is that the capital of the dealer system and major banks has been destroyed because of overleverage. 

If that was the bottom, it would be the first time in history that short frequency indicators didn't give some sign first or concurrently. 

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12 minutes ago, DrStool said:

What's going on is that the capital of the dealer system and major banks has been destroyed because of overleverage. 

There's no liquidity. They don't have the collateral to meet margin calls, so the central banks have stepped in to provide liquidity with free payday loans that never need to be repaid. 

So the central banks are creating trillions of currency units, let's call them dollars for consistency's sake, with neither fixed or financial asset backing that is adequte to cover the value of the currency issued. Nor is the production, nor any hope of production, or means to repay.  

Governments now plan to route those dollars not to dealers and leveraged speculators, but direct to consumers.  WIthout an increase in goods, the price of existing goods and production will rise, as Randolph Duke explained so well.  

Oversimplification. Yes. But something along these lines is now possible, given the sea change in sentiment among the primary dealers and leveraged speculators. They are wiped out. Animal spirits are dead. Fear is a great motivator of deep and lasting behavioral change. 

 

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