5/5/2016 - A mixed day with the Dow Jones up 9 points (+0.05%) and the Nasdaq down 9 points (-0.18%)
With today's market action being about as exciting as Joseph Stalin's 60th birthday party, Stan Druckenmiller did not disappoint when it came time to present his market analysis.
“I have argued that the myopic policymakers have no end game,” Druckenmiller said. "They stumble from one short-term fiscal or monetary stimulus to the next despite overwhelming evidence that they only produce a sugar high and grow unproductive debt that impedes long-term growth. Moreover, the continued decline of global growth despite unprecedented stimulus the past decade suggest we have borrowed so much from our future and for so long that the chickens are now coming home to roost."
I couldn't agree more. We have covered this topic on this blog extensively. The FED has no good tools left when it comes to fighting the next recession. Many will argue that the said recession is already here. Their only remaining option at this point in time is to go interest rate negative, introduce additional rounds of QE (in whatever form that might be) and hope/pray that the market doesn't collapse.
However, if you have been investing for any length of time you very well know that hoping and praying is not a good investment strategy. Sooner rather than later it blows up in your face. He goes onto say....
“Let me throw this one at you," he said. "My hint is what is the one asset you did not want to own when I started Duquesne in 1981? It’s traded for 5,000 years and for the first time has a positive carry in many parts of the globe as bankers are now experimenting with the absurd notion of negative interest rates. Some regard it was a metal. We regard it was a currency, and it remains our largest currency allocation.”
That is very much true. When the FED starts its monetization process, as described above, the yellow stuff should/will surge higher. But we are not there yet. A little bit more patience is necessary at this juncture. As my partner Matt Demeter has outlined so many times before, Gold Hasn’t Bottomed Yet, But We Know Exactly Where It Will
This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2015-2017. In fact, when it starts it will very quickly retrace most of the gains accrued over the last few years. If you would be interested in learning when the bear market of 2015-2017 will start (to the day) and its internal composition, please CLICK HERE.
(***Please Note: A bear market might have started already, I am simply not disclosing this information. Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update. May 5th, 2016 InvestWithAlex.com
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