The last few weeks have been dominated by the debt ceiling stand off. Well now we have a resolution and it appears DC has no attachment to reality either. The supposed drop in spending increases the National Debt $4 Trillion over the next 18 months. This is a win for fiscal conservatives? This is going to spell the end to inflationary spending? This is going to keep the Dollar’s place as the world reserve currency in tact?
The spending curbs are marginal at best. It’s like overspending your income every month and putting $1,000 on credits cards and saying you’ll cut back by 1 Starbucks drink a month. That’ll fix everything.
The Casino (Wall Street) is Detached from Reality
Traditional markets continue to surge higher led by technology companies. Specifically, those that are exposed to Artificial Intelligence (AI).
Just a handful of stocks are accounting for the vast majority of gains. And the momentum has built as NVIDIA (NVDA) promises to increase revenues by 60% year-over-year to $11 Billion. The stock market created over $200 Billion in market cap for this one stock in a single day. These behaviors to most might look like investing nirvana. What is it actually? The final bacchanal before the fall of Rome.
What To Do?
Anarchist investors realize how manipulated this game is. They prefer to stay far away from it. If you spend part of your time as a trader, not an investor, you may dip your toe in the water by scalping the rises or waiting to short (bet against) the market when the eventual crash begins. It’s probably already in process and is just taking a pause before it resumes.
Stick to the plan. Look for opportunities to raise cash while prices continue to climb or stay high. Real Estate is a good example. We may be reaching the height of the real estate market pricing here. Gold has pulled back off its’ highs and I suspect will continue to. Especially as the dollar continues to rally (big money is raising cash). Bitcoin continues to hold hear $28,000. Longer term, it still appears as if crypto is in the downtrend. The prices on certain durable goods are starting to fall. The cars and RV market is a good example. If you’re in the market for construction equipment or similar, you may have an opportunity here in the near term to pick some up at deep discounts. Especially if some operations go out of business and need to liquidate.
How Long Will This Last?
It can last for a while. Or the fall can happen tomorrow. But the certainty is the fall. It is coming. Keep your eyes and ears open. Don’t make huge purchases you don’t have to, stay away from debt, raise cash, and get your shopping list ready.
How to Get Involved
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***Keep in mind that investment and investment results are very much based on you as an individual. Do not rely solely on the discussion here to inform your investment decisions. Always make the investment decisions that are right for you.