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Wings of wax & a house of gold

Commentaries & Views

  1. Where's Jay?  As the US stock market tumbles, investors (who have devolved into QE welfare worshippers) want to know where their "sugar daddy" Jay Powell is. 

  2. Why is he so quiet as the stock market tumbles?  Why won't he announce that he's killing his rate hike plans and is ready to rescue the investors with more QE and related handouts?

  3. Sadly, Jay won't be making the kind of appearances that he did in the past, and if bank trading departments have shorted the stock market, Jay will be even more reluctant to announce a new round of "socialism for the rich" handouts to save the silly investors.

  4. Double-click to enlarge this stock market ETF chart.  Since November of 2021, I've suggested the "Q's" were likely forming the head of an ominous H&S top pattern.

  5. A right shoulder should be the next technical event, Double-click to enlarge.  Yesterday's "slip" through support at $350 has created a sloping neckline, which is ominous.

  6. To view what is likely the most important stock market chart in the world, Valuation is the most important consideration for stock market investors and nothing shows relative value better than the CAPE ratio, which I call the Icarus ratio.

  7. This ratio is so important that I keep a link to it on my computer desktop, so I always have instant access.

  8. The Icarus ratio is the "cyclically-adjusted" PE ratio, and inflation plays a role.  Because US official inflation numbers don't reflect the actual "boots on the ground" inflation that most citizens experience, it can be argued that the actual Icarus ratio is even more extreme today than it was in 1999.

  9. The ratio is likely now the highest in the history of the dying fiat empire known as… the United States of America! 

  10. Double-click to enlarge this long-term chart of the Dow.  Since 1980, I've issued only 4 major buys (1982, 2002, 2008, and 2020) and 3 sells (1999, 2007, and 2021) for investors.  The current sell alert is by far the biggest.  It dwarfs all my other sell signals combined!

  11. I'm predicting a "hybrid event" of 1929 and 1966 for America.  The coming horror will be almost unimaginable, and it probably involves both civil and global war.

  12. It's very important to understand the full ramifications of overvaluation and undervaluation.  An Icarus ratio of 40 isn't resolved by a short-term dip to 36.  In 2008 the ratio fell to around 15.  It would have fallen to 10 or lower if the central banks had not launched their QE welfare programs for failing governments, banks, and investors.

  13. The stock market may or may not make a new high from here.  If it does, the ludicrous valuation highlighted by the Icarus ratio will simply become even more ludicrous.  Bubble markets don't become undervalued by the tiny dips occurring in the US stock market over the past couple of weeks.  The bottom line:

  14. If Jay lets the stock, bond, and real estate investors learn to swim on their own while launching serious QT and a myriad of rate hikes, an Icarus ratio of 10 is likely going to happen, and the Dow would trade under 5000 in this scenario.   

  15. Investors who are waiting for a promised rally to "lighten up" are playing with fire.  The pros are selling while the "joes" are standing there stunned and some are buying more!  

  16. The Dow could fall another 10,000 points from here and it would still be massively overvalued.  This is the biggest sell zone in the history of the US stock market and amateur investors are in mortal danger.

  17. By the time the dust settles, well, the dust won't be settling for decades, and to understand why that is the case. Double-click to enlarge this "Flagship of American Socialism" chart.  The biggest pillar of socialism is fiat currency, and both of America's major political parties worship this vile entity with gusto. 

  18. The bubbles in real estate, the stock market, and the bond market are enormous, but they are dwarfed by the imploding bubble of US fiat currency itself.  For investors, it's a simple question of whether to side with the melting wax wings of Icarus, or to embrace a mighty "house of gold".

  19. A government can be focused on programs for the needy, but it must not do it with a foundation of fiat currency or debt.  Medicare for the sick and poor is not socialism if it is funded with minimal taxation, gold currency, and no debt. 

  20. A "big and strong" military funded by fiat and debt is a socialist military.  Debt and fiat are the lifeblood of socialism, but few citizens in either political party want to face this horrific reality.

  21. Market reality, which is ultimately the reality of fiat versus gold, will force them to face it.  The US government should have a bare minimum of $500 trillion (and probably a quadrillion) in gold bullion savings, but it has "chump tonnage" and a mountain of debt.  It's a pathetic situation, and it's why the empire is doomed.

  22. Double-click to enlarge this "ultimate asset" gold chart.  The technical action is awesome.  Note the current flirtation with the dotted blue trendline. 

  23. A breakout related to the destruction of "wax-winged" stock market investors seems imminent. Horizontal resistance at $1835 could stymie the breakout, but only temporarily.  A dip to $1750 may be required before the "blast off" to heights above $2089 occurs.

  24. Double-click to enlarge this "gold stock marines" chart of Agnico Eagle.  Do I believe that the average gold bug can outperform the top hedge fund managers over time?  Yes, but it takes a lot of patience.  The big buy opportunities for the miners happen once or twice a year, at key support zones for bullion.  The great news is that a massive one sits up at $2089, and what rhymes with a price of $2089, is gold stock investors who are ready to feel divine!

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.