/biz/ - Business & Finance

[Anonymous No.24528298]

Can someone explain the current financial situation. Are we getting inflation/deflation? Why are bond not a good investment if deflation? How are stocks sustainable at this high of p/e valuations? Why is gold dumping/BTC pumping?

Idk how to figure out where to put my money everything seems really fucked up and backwards. How do I beat the game?

[Anonymous No.24528328]

eth btc link or play shitcoin roulette

[Anonymous No.24528407]

>>24528328
Do most people on biz collectively agree that Link is at minimum 40B in a bullrun? Thinking god just throwing 10k into link and playing shitxojn roulette with 3 or 4k

[Anonymous No.24528461]

Also I don’t understand why bond prices are so low if insolvency crisis/deflation is looming?

[Anonymous No.24528475]

>>24528298
double posting?
>>24528124

[Anonymous No.24528523]

>>24528298
The (((Fed)))

[Anonymous No.24528674]

>>24528475
Other thread is mine

[Anonymous No.24528687]

Image attached.

We’ve been deflationary so much the Fed said fuck it and defibrillated the economy using COVID stimulus. Quantitative easing is being used to turn the tsunami into an extremely high tide. Not stop inflation, but even it out.

You see what happened in the 70s? Get ready. We’re seeing these extremely high stock prices because of the defibrillation, it’s going to wash over the rest of us. Scary part? Now that the the general consensus is a desire to increase inflation, politicians are going all in.

Ride the stock wave, crest into crypto. Gold is for the old money, Bitcoin is for the new.

[Anonymous No.24528746]

Stagflation to inflation. This will be brought on by the ridiculous stimulus bills and trade deficit. Also middle and lower class will only lose, because they won't be included in further bills.

Look what just happened: People were gonna get money up until biden got elected, now they're cutting the checks and only doing +300/wk in UI

[Anonymous No.24528750]

>>24528674
>>24528298
Y'all ready to go down the rabbit hole, it's soo deep, I haven't found the bottom.

[Anonymous No.24528800]

>>24528750
dude i love this shit

[Anonymous No.24528874]

>>24528298
The current financial system is thus:
All into crypto with hard wallet or you are a fucking idiot. And a faggot.

[Anonymous No.24529033]

>>24528298
There are mostly 2 sides to every question you just asked and nobody *really* knows for sure, it's all just speculation over data at the end of the day.

>Are we getting inflation/deflation
A dropping DXY and a rising BTC & Gold/Silver would suggest inflation, which sounds scary but is actually what central banks and monetary policy makers would rather see. FRED data, including M2 money supply, consumer spending, household and government debt would suggest deflation. Less money in circulation and higher debts everywhere creates a demand for dollars, leading to a stronger dollar and a deflationary environment. They will be attempting to avoid this scenario at all costs.

>Why are bond not a good investment if deflation?
The bond market is pretty fucked up right now and is too much to attempt to unwrap for me right now.

>How are stocks sustainable at this high of p/e valuations?
Easy answer: Because there are still people out there willing to buy. Bubbles always last longer than anyone expects them to. Many people still think the "big one" is right around the corner, even after the corona crash in march being the biggest decline in the history of the market over a month long period. As long as we continue down the inflation road and the dollar continues to drop in value, we can expect the stock market to keep grinding higher.

>Why is gold dumping?
no idea, it will stabilize and keep grinding higher though

The best way to grow your money is to first think about how to preserve it. Be diversified. Stocks, Real Estate, Gold/Silver, Crypto, Cash should all play a part in a sophisticated portfolio. It's up to you to find where the biggest opportunity of the moment is at.

[Anonymous No.24529170]

>>24528800
https://www.youtube.com/watch?v=iuCxUzgyk2k
https://www.youtube.com/watch?v=14I1BdncYVo

[Anonymous No.24529238]

>>24529170
isn't that the bond king? dude i'm not taking financial advice from that fuck

[Anonymous No.24529267]

>>24528298
HYPERDEFLATION INCOMING

[Anonymous No.24529838]

The cash sitting in my checking account will become more useless with every passing year. There is nothing coming but inflation.

[Anonymous No.24529890]

>>24528298

The entire system is unironically rigged to enslave you. The only way out is to be a bad goy and buy bad goy assets.

[Anonymous No.24530821]

>>24529033
>>24528298
>why is gold dumping?
COMEX manipulation, from what I've been reading. I am far from an expert but it does seem like the PM market is being manipulated to shake out weak hands, scoop up cheap gold, and ride the wave up when the next crash comes

[Anonymous No.24530855]

>>24529267
Isn't this not in anyone's interest? People without debt might be fine, but overall it would be far more crippling to the system that hyperinflation, no?

[Anonymous No.24530879]

>>24528298

[Anonymous No.24530948]

>>24530855

In the current circumstances, hyperdeflation is happening simultaneously to pretty much every form of fiat including metals. It can only happen when a set of legacy markets get dumped.


>>24529267

I've mentioned this a few times around /biz/
glad to see it finding a bit of traction

[Anonymous No.24531020]

why would hyper deflation happen?

[Anonymous No.24531187]

>>24531020

Needs to be a split between the financial instruments involved with day to day life and financial instruments concerned with the long-term.

[Anonymous No.24531299]

>>24528298
in an effort to mitigate the effects of the covid-19 recession the fed cut benchmark rates to 0 and unleashed a shit ton of liquidity into the system to shore up debt markets and ensure we didn't get a repeat of 2008

with benchmark 10-yr US yields sub-1%, the entire universe of bonds becomes less attractive from an investment perspective, driving incremental investment into equities as the only game in town

capital markets and financial assets are all priced on a relative basis to begin with, P/E valuations are a meme. Today you can buy a 10-yr bond paying less than 1% with 0 growth. At 100 par value that's a 100 P/E with no growth. Comparatively, you can buy stocks yielding 2-4% with growth potential at lower P/Es, which doesn't sound that bad when comparing to the bond market. Current spreads between equity yields and yields on debt are actually wide relative to history which tells you this market is cheap if anything

the key is to get the fuck out of cash, cash is being printed to infinity by governments around the world. Inflation might not materialize in your CPI and daily cost of living shit, but look around at the prices of financial assets and tell me there's no fucking inflation. People are wising up that cash needs to be parked in some kind of productive asset to preserve wealth

Gold is dumping temporarily because it ran up a fuck ton and needed to cool off. Most of the longs probably already got btfo and longer-term it's still in a good spot. Nothing goes straight up forever.

Buy broad diversified index funds and get a decent job so you can contribute to this portfolio frequently and you win the game. Own a diversified portfolio and don't be a stupid weak hands paper hands faggot who sells on dips.

[Anonymous No.24531884]

>>24528298
Deflation in real terms i.e. when measured against real money, i.e. gold.

Inflation in nominal terms i.e. when measured against fiat money, i.e. US dollar.

[Anonymous No.24531987]

>>24528461
Thats a beautiful portrait of a cynocephaloid.

[Anonymous No.24532403]

>>24531299
>fed cut benchmark rates to 0 and unleashed a shit ton of liquidity into the system to shore up debt markets and ensure we didn't get a repeat of 2008
Don't forget getting rid of reserve requirements. That's the devil in the detail.

[Anonymous No.24533766]

>>24529033
Well put man

[Anonymous No.24533854]

>>24528475
We should be talking more about this anon. Every other post is some pajeet scam PnD

[Anonymous No.24533925]

Bump thx for the thoughts

[Anonymous No.24534040]

it's so weird and refreshing to see actual economics discussed on /biz/, as I scroll I keep expecting to see some pajeet ruin it by shilling Stratera

[Anonymous No.24534049]

When Jerome said he a tool to inject the economy I’m pretty sure he has the digital dollar in mind. Imaginary credits, building a new currency on top of another one without printing more. Maybe I’m a retard

[Anonymous No.24534056]

As long the housing market still climbing. the economy is safe.

[Anonymous No.24534090]

>>24528687
This

[Anonymous No.24534135]

>>24534056
The problem is a bubble waiting to burst....

[Anonymous No.24534163]

>>24534056
people thought this in 2006. everything goes up until it doesn't

[Anonymous No.24534177]

>>24528298
Financial assets are currently being held up by near-zero interest rates. Tech does very well in low interest rate environments, but they do poorly when interest rates start to increase. This is my current reading of the situation.

- Looking at oil prices, we have deflation. The recent spike in oil buying is due to sovereigns filling up their strategic reserves, taking advantage of the low prices.
- Trade breakdown with China would suggest stagflation since 90% of consumer goods/shit we buy on Amazon is rebranded chinkshit.
- A significant drop in global trade would mean less demand for US treasury bonds. This would also mean higher interest rates since the Fed cannot buy bonds directly, they can only buy them from the secondary market (basically an individual, bank, or sovereign sells their existing debt to them). This is why interest rates on new issues may be increasing, the Fed has little control over the interest rates of newly issued bonds as they can only influence this through the secondary market.
- Since the US produces most of its own food, energy and basic necessities, prices of everyday goods will remain stable. The Fed will buy almost all the mortgages and as the creditor, they will continue pressuring the mortgage companies to extend forbearance. This increases the existing debts until things go back to normal and defaults are "allowed" to clear. This is when you will see discounts in home prices and cheaper real estate.

This is extremely bullish for infrastructure, oil (not shale oil), natural gas, chemicals, and other export driven parts of the industry and very bearish for ecommerce and consumer tech stocks. The American economy will permanently change after COVID-19, as it becomes less and less consumer driven.

>>24532403
This is the reason I buy saving bonds regardless of the current "data" we're given. US Savings EE bonds yield as much as junk at 3.5% over 20-years, which is a risk-free asset with junk bond yield.

[Anonymous No.24534184]

10% in metals, 60% in crypto and 30% in cash. What would you guys do with the cash? I aint touching near ATH stuff

[Anonymous No.24534233]

Bitcoin is an intangible. It's quite literally the game-changer. I know econ fags don't like to hear this because it wasn't taught in your overpriced econ classes in college, but you'll have to face the facts eventually.

>>24528298
>How do I beat the game?

You'll find out in the next few years.

[Anonymous No.24534261]

>>24534184
I sold all tech and ecommerce stocks

I am mostly in steel, aluminum, cement, chemical, natural gas and other export economy stocks that have stagnated in the last decade.

I think old Japanese banks (not Softbank) will make a comeback since they're more familiar with a stagnating economy than anyone else, and I can see them make money in this environment.

Avoid lumber/home improvement/homebuilders since housing will decline as soon as mortgage moratoriums are over. Mortgage services have already hedged against this so I can see them make money when the Fed pulls the plug.

Do not buy ETFs. They're loaded with junk.

[Anonymous No.24534309]

>>24534056
Housing prices are climbing because it's almost impossible for anyone to default right now, which is pushing mortgage backed securities into bubble territory. This also keeps inventory unreasonably low.

[Anonymous No.24534331]

>>24528687
So what exactly is happening in the next 6 months? All in on stocks or get out of stocks entirely right now?

[Anonymous No.24534544]

>>24534331
It depends on what stocks.

If you have stocks in the S&P 500, then the value of your stocks can swing wildly because so much money is in ETFs. Most of the price action is in the ETF being bought and sold, and it may have nothing to do with what the market thinks about the company's stock.

[Anonymous No.24534674]

>>24528874
This