flashplayer said:

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Fed is going to have to sink some banks and crank up the interest rate another 25-50 bp. The optimism that they will be able to sit on their hands and watch inflation slowly drop looks far fetched each time new numbers come out and with the eye test each month when we pay bills.

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As long as Fed funds at 5.3% is in excess of inflation, policy is technically restrictive. So they will be able to maintain the pause. A climbing 10 year and continued deposit drain at regional and small banks will cause failures due to simple math. That will lead rates back down.

Biden will be running on bank failures and restrictive FED policy.

Good luck.

Bonfire.1996 said:

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flashplayer said:

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Fed is going to have to sink some banks and crank up the interest rate another 25-50 bp. The optimism that they will be able to sit on their hands and watch inflation slowly drop looks far fetched each time new numbers come out and with the eye test each month when we pay bills.

---

As long as Fed funds at 5.3% is in excess of inflation, policy is technically restrictive. So they will be able to maintain the pause. A climbing 10 year and continued deposit drain at regional and small banks will cause failures due to simple math. That will lead rates back down.

Biden will be running on bank failures and restrictive FED policy.

Good luck.

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agree with everything you said...but is there anyway they can delay what you say for another 6 months??? b/c that is what I see happening...if that is even possible, of course...

EnronAg said:

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Bonfire.1996 said:

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flashplayer said:

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Fed is going to have to sink some banks and crank up the interest rate another 25-50 bp. The optimism that they will be able to sit on their hands and watch inflation slowly drop looks far fetched each time new numbers come out and with the eye test each month when we pay bills.

---

As long as Fed funds at 5.3% is in excess of inflation, policy is technically restrictive. So they will be able to maintain the pause. A climbing 10 year and continued deposit drain at regional and small banks will cause failures due to simple math. That will lead rates back down.

Biden will be running on bank failures and restrictive FED policy.

Good luck.

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agree with everything you said...but is there anyway they can delay what you say for another 6 months??? b/c that is what I see happening...if that is even possible, of course...

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Who is they? What button can they press to do anything?

Watch the bond market. "THEY" will tell you exactly what's coming. 10 year auction today and 30 year later this week.

It's "transitory."

Bonfire.1996 said:

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flashplayer said:

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Fed is going to have to sink some banks and crank up the interest rate another 25-50 bp. The optimism that they will be able to sit on their hands and watch inflation slowly drop looks far fetched each time new numbers come out and with the eye test each month when we pay bills.

---

As long as Fed funds at 5.3% is in excess of inflation, policy is technically restrictive. So they will be able to maintain the pause. A climbing 10 year and continued deposit drain at regional and small banks will cause failures due to simple math. That will lead rates back down.

Biden will be running on bank failures and restrictive FED policy.

Good luck.

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Proof is in the pudding and you can look at the deposit rates NYCB is offering as an example of what Bonfire is saying to perfection. Offering 5.55% yield on deposits just to keep cash on that bank's balance sheet is a symptom of the market forces working.

Heineken-Ashi said:

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EnronAg said:

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Bonfire.1996 said:

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flashplayer said:

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Fed is going to have to sink some banks and crank up the interest rate another 25-50 bp. The optimism that they will be able to sit on their hands and watch inflation slowly drop looks far fetched each time new numbers come out and with the eye test each month when we pay bills.

---

As long as Fed funds at 5.3% is in excess of inflation, policy is technically restrictive. So they will be able to maintain the pause. A climbing 10 year and continued deposit drain at regional and small banks will cause failures due to simple math. That will lead rates back down.

Biden will be running on bank failures and restrictive FED policy.

Good luck.

---

agree with everything you said...but is there anyway they can delay what you say for another 6 months??? b/c that is what I see happening...if that is even possible, of course...

---

Who is they? What button can they press to do anything?

Watch the bond market. "THEY" will tell you exactly what's coming. 10 year auction today and 30 year later this week.

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yeah, I don't really know who I'm referring to when saying "they"...Fed/Treasury/Biden admin/etc/no clue.

not gonna lie, all of that is way over my head and paygrade...just using the very long history during election years where the market does not break...so just thinking certain parties can hold it up with duct tape and paperclips until it no longer "influences the election"...even though, that is exactly what is happening.

I would love for Biden to have to run on some of the turmoil that has been created...I just think the can will get kicked a little bit past that timeframe...

Brian Earl Spilner said:

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Heineken-Ashi said:

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LMCane said:

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please explain what you think comes next for NVDIA

could it not breakout from the channel and move to ATH?

I mean theoretically based on charting, not on what is likely.

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The chart is a relationship. NVDA valued in Gold. Gold has just started to break out in a bull market and NVDA has seen the bulk of its big move and is in the chop around phase which could melt higher, but could also retrace pretty hard. I think any of these things can happen for the rest of the year..

A. NVDA drops while Gold rises.
B. They both drop with NVDA dropping harder.
C. They both rise with Gold rallying much harder.

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But why gold? Not sure how the price of gold correlates to NVDA in any meaningful way?

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Because it's not the dollar and is the most widely accepted, long-running, historical store of value.



Here's the SPX valued in Gold, and a more clear look at where we are long term. Clear bottoming in 1980 not long after we left the gold standard. Make sense why we left it now? Everything was deflating against the currency we were tied to in a massive inflationary time period. So let's move to made up money that we can continuously devalue while deficit spending our way into a multi-decade growth cycle. That way inflation will make things go UP, not down.

Valued in Gold, SPX is currently 17x off the 1980 bottom, currently valued at around 2.2 per US$ per ounce of gold, and falling. It's highest point in 2000 was 42x and 5.59. We know how that turned out. We came all the way back to SPX being valued at 0.59.

With Gold moving up, the SPX could theoretically be coming back like it always does toward that lower boundary. That's where economic cycle swing downs get near. A 100% extension of the move from 1999-2011 move down of SPX relative to gold would place SPX at 0.29. At today's gold prices, that's SPX 678.

But we're still living in a modern monetary, Keynesian, deficit spending, and inflationary economy. Even if we have a massive correction, I don't see us changing.. just entering into the next debt leveraged rally. So I really just don't see that happening. But I can see it reaching a 0.5-1.0 level in a deflationary economic down cycle. And with Gold looking like its headed to 2,500-3000, a 1:1 ratio SPX to gold would be.. SPX 2500-3000.

Even at current gold prices and SPX reaching the lower Keltner band, we're talking SPX at 1.5 which puts it at 3450.

Of course, all of this is theorized. Anything can happen. But can you sit there and tell me with a straight face that gold isn't at all relevant while constantly predicting a debt fueled, currency debased stock market to reach continually higher levels in the face of the economic turmoil that is starting to finally become reality? This chart shows the SPX valued historically against the longest running store of value THAT USED TO BE OUR ECONOMIC STANDARD UNTIL WE LEFT IT AND STARTED DESTROYING OUR CURRENCY.

LMCane said:

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Heineken-Ashi said:

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EnronAg said:

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Bonfire.1996 said:

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flashplayer said:

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Fed is going to have to sink some banks and crank up the interest rate another 25-50 bp. The optimism that they will be able to sit on their hands and watch inflation slowly drop looks far fetched each time new numbers come out and with the eye test each month when we pay bills.

---

As long as Fed funds at 5.3% is in excess of inflation, policy is technically restrictive. So they will be able to maintain the pause. A climbing 10 year and continued deposit drain at regional and small banks will cause failures due to simple math. That will lead rates back down.

Biden will be running on bank failures and restrictive FED policy.

Good luck.

---

agree with everything you said...but is there anyway they can delay what you say for another 6 months??? b/c that is what I see happening...if that is even possible, of course...

---

Who is they? What button can they press to do anything?

Watch the bond market. "THEY" will tell you exactly what's coming. 10 year auction today and 30 year later this week.

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Am I correct in believing that if these bond auctions start to falter, and they have to raise rates to entice more buyers of US debt..

then that will cause banks to begin to fail?

is that what the above discussion is surmising?

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Yes. As inflation moves up, buyers would start demanding a higher return.

But the FED "can" step in at any point and grow their balance sheet by buying all of these at lower rates. We would then get hyperinflation.

I'm just here for bonfires 10y bond auction commentary

Brian Earl Spilner said:

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I mean I get your point about the dollar devaluing, but I'm more asking what using gold as the metric will tell you about NVDA that using the dollar won't, as far as charts, patterns, etc.

I get that it strips out a lot of the devaluation of the dollar, just not sure to what end.

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It might not mean anything honestly. It's just another way to look at the leading stock that's driven the majority of the SPX returns. Trying to put it in another perspective, that's all. The trendlines are something to watch if there is to be continued correlation that the chart is showing.

If IWM takes out today's low, watch out below.

crazy battle here and lots of volatility.

Heineken-Ashi said:

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If IWM takes out today's low, watch out below.

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looks really ugly intraday

S&P Real Estate sector down almost 5%. No rate cuts to bail out troubled loans = doom. KRE (regional banking) down 5.5%. XLF to likely follow.

Not too late to jump in XLF Nov or Dec $30 or $31 puts. Up only 6 cents from my entry last week.

Bingo.

Bulls need to let go and let God.

Anyone care to see the 3 potential EW paths I'm tracking on the 10y yield?

That's not a question. Learn us something.

Please.

Heineken-Ashi said:

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Anyone care to see the 3 potential EW paths I'm tracking on the 10y yield?

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