Worry-Free Wednesday?

45,204 infected, 1,116 dead, 5,085 recovered.

Not much point in even tracking the virus, which is now called Covid-19, since it doesn’t seem to be able to affect the markets or, as Powell said yesterday, whatever economic damage is done, China will make it up with stimuls because – STIMULUS FIXES EVERYTHING!!!  At least that seems to be the 21st Century’s answer to all economic ills, why worry about anything when we can just print more money?  

As you can see from the chart above, the real virus that’s infecting the World is FREE MONEY and just the Big Four Central Banksters have printed $25 TRILLION in the past 10 years and you know China, India, Australia and others were not slacking off at their printing presses either.  Overall, roughly 5% of the entire Global GDP for the past decade has come from Central Bank printing presses – all designed to make you think your Government is doing its job and growing the economy – even though it’s really just growing the balance sheets of the Central Banks, which is really a hidden form of debt.

The non-hidden forms of debt have jumped up $50,000,000,000,000 in the past decade and that’s another 5% of Global GDP added in debt each year as well so of course it FEELS like we’re doing great – just like your children feel like you are doing great when you put a trip to Disneyland on the credit card – it’s the time of their lives for them and you have to deal with the bills when you get home.  

Of course the great thing about adding $100Tn in debt to prop up the Global Economy is that EVERYBODY’s doing it and no one is paying the bill.  With no responsible adults in the room, we are all partying like it’s 1999 – only 150% more in debt than we were then.  Japan is, in fact, over 250% of their GDP in debt so it does seem like there’s no actual limit to how much debt a country can go into – as they still seem to function.

I mentioned China above and China’s Corporate Debt has gone from essentially zero back in 2005 to about $20 Trillion in 2020 so that’s about 150% of China’s GDP added in debt in 15 years.  10% of their GDP, PER YEAR, added in Corporate debt alone in a country where GDP growth is 7% a year.  Hmmmmmmmmmmmmm…

Does debt matter at all anymore?  I guess that’s what happens when you max out your credit cards and they offer you a new one – what’s the difference at that point?  Debt only matters if they try to collect it – or if they stop giving you more and, as I said, Japan is 250% of their economy in debt and the US is only 115% in debt so we could spend another $25Tn before we even catch up to Japan, who would be about 400% in debt by then so, as long as they don’t implode, why should we stop?

NO CONSEQUENCES!  That’s the gist of what we’re doing and that’s the perfect summary of the Trump error so far.  Nothing you do matters if you get away with it and Trump didn’t start the fire, he’s just throwing logs on it with his annual Trillion Dollar deficits, which are now the “new normal“. 

To a large extent, all this money-printing is causing the markets to fly higher.  Printed money goes to the already rich through low interest rates, stock and bond buybacks and tax cuts.  Government spending also goes to the rich when 1/4 of it is Military Spending as not a lot of poor people own shares of Locheed Martin or Raytheon.  All this new money ($2Tn this year) has to go somewhere and Globally they are printing $10Tn and, if it’s not going to help the poor – it tends to end up finding it’s way into the stock market – so we have built-in 10% gains for the investing class. 

Even better, by keeping the money out of the hands of the Bottom 90%, we keep inflation low as they are not competing with us to buy food or housing (or anything else, for that matter) – so we get all the goodies for ourselves.  The Top 1% can only live in so many houses (5), so there are still plenty of places we can buy for a reasonable price.  We’ve seen what kind of chaos we get when poor people are able to buy homes, like they did in the early 2000s – we’re not going to let them do that again!  

Meanwhile, our Oil (/CL) longs are doing well this morning at $51+ and this is the 3rd time this week we’ve had a winner playing oil long at the $50 line.  We still have our Copper (/HG) longs from last week’s Live Trading Webinar as well as our Natural Gas (/NG) longs that are finally starting to pay off.  We’ll take that money and run as the day is very uncertain and they are huge profits.  

The same cannot be said about our index shorts but we’re going to double down this morning at 3,372 on the S&P (/ES) and 9,575 on the Nasdaq (/NQ) – following the same pattern we have all week.  I said to our Members yesterday afternoon:

Back to 2 short /ES 3,365 avg (takes into account profits off the table), 2 short /NQ @ 9,576, 2 long /CL at $49.94, 2 long /NG at 1.775 and 3 long /HG at 2.547 but shame on me for missing $2.60 earlier to take at least 1 off.

We’re doing another Live Trading Webinar this afternoon at 1pm, EST, and we’ll see how things are shaping up then.

Provided courtesy of Phil’s Stock World.