Sunday, February 23, 2020

When Bubbles Pop, Only the First Sellers Escape Being Bagholders

by Charles Hugh Smith, Of Two Minds:

Hapless bagholders have two options: buy the dip and be destroyed, or hang on hoping for a reversal and be destroyed.

One often overlooked characteristic of the current stock market bubble is the extremely small exit for sellers trying to avoid becoming hapless bagholders. Bubbles always present small exits because once sentiment turns, buyers vanish and so price goes over the waterfall and crashes on the rocks below (accompanied by the screams of all the punters who reckoned they’d exit at the top).

The Fed Just Revealed Plans for a Digital Dollar Replacement

from Birch Gold Group:

Thanks to the Federal Reserve, the idea that you can go into a store and anonymously purchase something with cash might soon be obsolete.

Why? Because they’re developing something called Fedcoin, which would be based on blockchain technology.

If you’re unfamiliar with blockchain technology, you’re not alone. Here’s how a piece on Motley Fool describes it:

China Intensifies Its Pursuit of “De-Dollarization” with a New Digital Currency

from Birch Gold Group:

Earlier this week, we covered the Federal Reserve’s pursuit of a central bank digital currency (CBDC), based on the blockchain and dubbed “Fedcoin.”

It turns out that China is also pursuing its own version of a CBDC, and while the consequences of such a move for Americans would be very different than those of a Fedcoin, they have the potential to be even more dire. What’s more, Beijing could be even closer to implementation than the Fed is.

Vila Lehdonvirta, a Senior Research Fellow at Oxford, was quoted on Quartz explaining a few advantages (to China) of its version:

California Auto Woes: New-Vehicle Registrations Fall for 3rd Year, -9.5% from 2016. Bay Area Hit Hardest. Q4 Was Ugly, with Tesla Plunging 46%. But Used-Vehicle Market Grows

by Wolf Richter, Wolf Street:

Market share of EVs reaches 5.3%. The registrations data is out in all its glorious detail.

It was a tough year for selling new vehicles in California. Total new vehicle registrations in California in 2019 fell 5.5% from a year earlier, to 1.89 million vehicles, the third year in a row of declines, according to registration data released today by the California New Car Dealers Association (CNCDA).

Registrations were down 9.5% from 2016. This was far sharper than the decline in US auto sales of 2.5% over the same period. Registrations are now back to where’d they’d been in 2007, before the collapse during the Financial Crisis:

CORONAVIRUS SPREADS TO MANY COUNTRIES

by Harvey Organ, Harvey Organ Blog:

HUGE RISE IN PRICE OF GOLD: UP $28.40 TO $1646.10 ON DRAMATIC ESCALATION IN THE CORONAVIRUS PANDEMIC//SILVER RISES 22 CENTS UP TO $18.56//COMEX HAS HUGE QUEUE JUMPING IN BOTH GOLD AND SILVER AS BANKERS BADLY NEED PHYSICAL METAL//DOW PLUMMETS BY 227 POINTS AND THE NASDAQ FALLS A WHOPPING 174.38 POINTS//CORONAVIRUS SPREADS TO MANY COUNTRIES//IRAN HAS ANOTHER 2 DEATHS//SOUTH KOREA BECOMES THE 2ND HOT SPOT AFTER HUBEI PROVINCE (WUHAN CITY)//IN HORRIFYING NEWS WE HAVE OUR FIRST RE INFECTION IN CHENGDU //ALASDAIR MACLEOD: A MUST READ FOR THIS WEEKEND// SWAMP STORIES FOR YOU TONIGHT

Market Report: Gold roars through $1600

by Alasdair Macleod, GoldMoney:

Gold and silver performed strongly this week as it became clear to a wider investment audience that a new bout of coordinated global money-printing is ahead. Gold rose $50 from last Friday’s close to trade at $1633 in European trade this morning, while silver rose 75 cents to $18.50 over the same timescale.

On Comex, open interest in the gold contract has soared 75,000 contracts since 12 February, as shown in our next chart.

Warren Buffett’s worst year since the stock market crashed…

by Simon Black, Sovereign Man:

Warren Buffett’s holding company, Berkshire Hathaway, didn’t outperform the S&P 500 last year.

Berkshire Hathaway grew slightly in 2019, but its performance lagged far behind the S&P 500 stock market index.

That’s an anomaly for Buffett. He’s handily outperformed the S&P 500 for decades, endearing himself to millions of investors along the way.

It’s interesting that Berkshire Hathaway typically has its worst years just before stocks crash.

Red Gold: China’s Stealth Plan to Use Gold for World Domination

by Marin Katusa, Katusa Research:

Gold used to be important.

During and after World War II, every major developed country amassed as much physical gold as they could. It stabilized currencies and signaled independence.

But with the end of the gold standard in 1971, most countries began to sell off their reserves.

So much so that in 1999, an agreement was formed to limit the amount of gold that central banks could sell. Fast forward to today, and Canada’s central bank owns ZERO gold.

Prepping at the Dollar Store

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by Ani, Survival Blog:

Editor’s Note: Coincidentally, I received two very similar articles from readers in two states, in the same month. But because they have different perspectives, I’ve decided to post both of them. (The other one was posted yesterday.)

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With a lot of attention being paid in the past few weeks to the spread of the novel coronavirus in China and the potential but still unknown ramifications for both the health and economy of other countries. preparedness has been getting some attention. While many of us who have been avidly following the news on this virus are experienced preppers, there are many who are new to it. Some may have already done some prepping but are still lacking in supplies for many reasons(divorce, illness, job loss, relocation, etc). Some may be thinking that perhaps they should try to stock up on some stuff “just in case” they were to experience a “lockdown” as in China due to the pandemic spread of this virus or perhaps economic distress due to the disruption of the global economy. The possibility of experiencing a run on supplies as happens before hurricanes and other natural disasters can’t be underestimated. Although things appear to be pretty calm at present in the US(other than sporadic runs on face masks) one never knows what will happen. It could only take a local outbreak in an area such as NYC to raise the panic level here.

Covid-19: Global Retrenchment Will Obliterate Sales, Profits and Yes, Big Tech

by Charles Hugh Smith, Of Two Minds:

If you think global demand will rebound as global debt and confidence implode, you better not be making consequential decisions based on Euphorestra-addled magical thinking.

Even before the Covid-19 pandemic, the global economy was slowing for two reasons: 1) everybody who can afford it already has it and 2) overcapacity. One word captures the end-of-the-cycle stagnation: saturation.

Everyone who can afford a smartphone (or can borrow to buy one) already has one. Everyone who can afford an auto loan already has a car. Everyone who could afford an overpriced house already bought one. Everyone who can afford a tablet or laptop already has one. And so on.