The thing is with Brent's "Dollar Milkshake Theory"... if he is correct ,and it is a feedback loop that will break the system, the Fed should know of this risk. If that is the case and it is truly system threatening THEN they will front run it with truly massive monetary expansion to circuit break the collapse.
My guess is they will attempt to make every bit of infrastructure in the US shiny and new before they will admit defeat.
I think it still ends badly, just differently and a little further down the track.
The only question is how long before this spirals out of control, one way or the other...
Thinking about the COVID timeline I am now asking myself was COVID the driver of the Fed Repo spike in 2019. It would seem that there was awareness of this issue prior to the spike. Did the smart money know then that this was global pandemic material?
Since March, the SPX has been outperforming the small-caps which is another way of saying the small-caps have underperformed. This was taken as evidence that the market is getting tired or is vulnerable.
Notice that about 6 weeks back the SPX/VB peaked and is making lower lows and lower highs. It appears the small-caps are outperforming the SPX. It is possible that this is actually a good sign for the overall market -if- this action continues. [Assuming this makes any difference at all.]
I watch this because I am investing in small-caps for WTT system.
FYI My coworker's friend works at Progressive Insurance. Inflation eating them alive. Paint, fenders, floods & the rebuild costs lumber, roofing and nothing available are out of control. Hard to make a profit in an environment like that. I would expect rates to go up HUGE!
It's being kept down with paper, you can't have the delivery storm we have had over the last two years without new highs following eventually. I think this is what Oliver is seeing in momentum. When this gives way it should be a fast move and as he says gold equities are CHEAP. If you want value it is in the gold market right now. In a world of passive index chasers value is anathema but that will change and the pay off will be worth the wait.
Off course if your concern is tomorrows price then I guess you wait and chase.
I'm buying weakness and waiting, getting irresponsibly long gold stocks over the end of this year. Fingers crossed for a market crash and people throwing good gold stocks at me for virtually nothing.
I've never been one for posting beach balls, and none of the usual suspects are... and you know what, I suspect that their day is coming here and they will have already left the party. The market is a bitch.