Wednesday, June 24, 2015

High Plateau Drifter Comments on Bond Bear Market

Latest from High Plateau Drifter, posted on the bond bear market thread:

As I have told CP many times, what we see now is exactly what you would expect to see in the very early “seedling phase” of a great inflation. Rising stock prices and a record run of stimulus from the central bank. Of course in the old days, whether it was Weimar Germany, Argentina, or Zimbabwe, one could sell one's locally priced stocks for cash as soon as the inflation rate passed the rate of increase in stock prices and immediately park it in a bank elsewhere in a stable currency to protect yourself. That dodge is no longer so easy now that the entire world seems to be inflating in unison with the possible exception of Russia. In addition to increased surveillance powers, limits on cash withdrawals and regulatory costs imposed on so called tax haven banks have caused them to close their windows to U.S. customers. Making yourself and your assets “illegible” to government is not as easy as it once was, and, I fear, now that that all governments are borrowing and inflating more or less in unison, the government to which you and your assets might flee is just as likely to steal from you as is our own Uncle Sam. For those of you who want to stack, I would suggest platinum rather than gold, since it is now cheaper than gold (for the first time in living memory), and because there is not enough of it in private hands to merit the costs of a confiscation effort.

So now we have clear signs of distribution in the U.S. stock markets, as the smart money begins the relatively disciplined process of exiting (high volume down days and light volume up days. The ghost of Jesse Livermore rides again!!) while luring in genXers and millennials at every minor dip, setting them up for the kind of learning experience that the 1973 highs of Dow 1000 handed to me back in 1974.

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