We Just Saw It
Powell’s Jackson Hole speech wasn’t the same as his FOMC meeting notes just a few weeks ago.
In the July meeting, Powell downplayed the weakening jobs market while promising that the FED will cut rates in September, but he didn’t detail a path to much lower rates.
It led to massive uncertainty.
That caused stocks to crash, the NASDAQ 100 to correct, and Japan’s stock market to fully crash and halt.
Friday’s message was much better. There was no downplaying but rather fully embracing the mission at hand: saving the American economy from entering a hard landing since restrictive policies on interest rates have now come full circle and are close to inflicting damage on what was a very tight jobs market.
None of this mattered to retail investors. They continued pouring funds into the ultra-safe money market accounts that dish out that sweet 5% yield that does nothing for you and is far less than you’d earn with stocks!
Money market accounts now contain $6.24T of the public’s wealth!
Courtesy: Zerohedge.com, Bloomberg
This is a bubble of epic proportions, and it is about to pop badly! Remember that I said it here: the money market accounts will start to yield far less, and the public will NOT leave. Just like with any bubble, they will RUSH out the door in a stampede!
While money market accounts have delivered 5% annualized or 3.5% so far in 2024, our portfolio includes the following:
Arch Capital Group: up 44.30% in 2024!
Axon Enterprises: up 47.32% in 2024!
Cintas Corporation: up 33.21% in 2024!
Fair Issac Corp.: up 54.30% in 2024!
Guidewire Software: up 36.60% in 2024!
ServiceNow: up 20.87% in 2024!
Nu Holdings: up 77.37% in 2024!
Palantir: up 91.68% in 2024!
The Trade Desk: up 48.75% in 2024!
Vertiv Holdings: up 72.11% in 2024!
By the way, the NASDAQ 100 is up 19.23% in 2024, so it’s a good thing you’re reading our newsletter so you can crush Wall Street like a bug and avoid the cash bubble trap of money market accounts while showing all your family members, friends, and coworkers the benefits of holding superior companies in a portfolio!
Courtesy: Zerohedge.com, Bloomberg
Now, let’s look at the clear loser of the world’s central bank race to cut interest rates dramatically in the coming year: the U.S. dollar!
The DXY index is sitting at 100 points, which is a low for the year and right on the 2.5-year support.
If it fails to hold, the DXY index could crash by as much as 13% and hit 87.
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In a scenario like that, silver could reach well over 40 and possibly break its previous all-time high of $50/ounce.
Courtesy: Zerohedge.com, Bloomberg
The Bloomberg dollar spot index reveals the same picture: the resistance is at 1,280 points, and the support is at 1,210, a 70-point range that would send the index to 1,140 if broken, a 5.7% drop when looking at the 18-month chart.
We could be entering a weak dollar environment, and that is going to send gold stocks WAY, WAY, WAY higher.
WAY…
Love these charts:
Best Regards,
Lior Gantz
President, WealthResearchGroup.com
Governments Have Amassed ungodly Debt Piles and Have Promised Retirees Unreasonable Amounts of Entitlements, Not In Line with Income Tax Collections. The House of Cards Is Set To Be Worse than 2008! Rising Interest Rates Can Topple The Fiat Monetary Structure, Leaving Investors with Less Than Half of Their Equity Intact!
Protect Yourself Now, By Building A Fully-Hedged Financial Fortress!
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