A Most Important Chart

[wheatking16]

The 20- Year US Treasury Bond ETF (TLT) is making new highs relative to the S&P 500 EFT (SPY).

The downtrend remains intact, but this could be in the early stage of a trend change.

The Bond market is often considered to be the "smart money".

What message is the "smart money" sending by allocating capital to the bond market faster than the US stock market?

In the past, this has been a "canary in the coal mine" chart which we used to avoid the 2020 pandemic crash or pullback, whichever term you prefer.

This is still too early to predict a crash, but it could be a great opportunity to prepare oneself.

IMO

We will discuss this further in our newsletters.

[biglentil]

This is best case scenario, the real rate is much higher.

[Stormin]

Bitcoin price...$600,000 maybe $1,500,000

[errolanderson]

Smart money and the ticking clock. Great post!

Moody’s also just downgraded China credit rating to negative (just a year late). Tough times, more warning for continued global commodity price meltdown.

Equities on a different planet. Pillowy soft landing, they say. Central bankers battling credit / bank fallout (a major firestorm behind-the-scenes) as S&P index nears all-time high.

But commodity washout clearly in-progress. Canary-in-coal-mine already a ‘dead duck’ . . . .

[biglentil]

Most are expecting a soft landing and a fed pivot, perhaps its a crash and a fed pivot. Either way the currency is always sacrificed to protect the system, that is when price inflation really takes off.

So keep some powder dry but also remember the trend is your friend and the decreasing purchasing power of the dollar is baked in.

And if oil goes negative again you can be assured its a good time to buy.

[sumdumguy]

Wheatking, you speak of preparing oneself for a crash. What would you suggest? Cold Cash, Gold, Silver? I would imagine that cash would be king in a credit crash like 2008?

[errolanderson]

Rumblings of serious problems within China’s banking system. Is there a risk of an oil price swoon? This doesn’t feel good for any commodity.

[ColevilleH2S]

I've seen speculation that the Saudis will open up the taps for 6 months to a year, in an effort to bankrupt as many junior shale producers as possible. And to keep Russia from investing in it's production and export infrastructure.

[wheatking16]

Wheatking, you speak of preparing oneself for a crash. What would you suggest? Cold Cash, Gold, Silver? I would imagine that cash would be king in a credit crash like 2008?

The response to this question is often a simple one-word answer: USD, Bonds, gold, silver, land, Bitcoin, etc.


IMO, simple answers to complex questions identify a need for a better understanding of the topic. And I consider this a complex question.


Let me explain with a long answer to a short question.


Preserving purchasing power is the first objective of market crash preparation.


We want to preserve or increase the holdings of our dominant currency during a market crash.


It can be easy to identify ways to do this; however, much more difficult to execute.


The first order of business is to remove any belief you have about coming market crashes, inflation hedges and safe investments.


There is no “one size fits all” approach to prepare for market crashes.


When markets crash, almost everything sells off. Almost.


Why?


Cash is required to operate your house, business, etc.


Gold sells off, Bitcoin sells off, etc., etc., as investors rush to safety, which in modern times has often been liquid USD and US Treasuries.


Perhaps the best alternative is to short the market. But shorting stocks or the market is difficult and risky. When you buy a stock, the lowest it can go is zero. When you short, there is no limit to how high it can go. Often, a short squeeze happens, and the move higher is quick and painful. Shorting is difficult.


Remember, there is always a Bull market somewhere and long positions have less risk than short positions.


One of X's more obnoxious commentators effectively disseminates his market crash is coming narrative. They have shorted the stock market for the past few years with horrible results. The commentator personifies the term “confidently wrong.”


So, remove your beliefs about impending market crashes, inflation and safe investments.


One needs to go with the flow and follow the trend.


Different assets will perform better than others during a market crash. We want to identify assets in an uptrend and then compare them on a relative basis for the best results. We want to invest in Gold if it performs better than the SPY, USD better than CAD, Bonds vs stock market, etc.


Remember to avoid becoming married to your position. Or identify with it. For example, being a bull or a bear, a gold bug, or a Bitcoin maximalist, etc.


Accept new price information and adapt your position accordingly.


Have loosely held positions.



The following Bruce Lee quote applies to life and the markets:


“Be like water making its way through cracks. Do not be assertive, but adjust to the object, and you shall find a way around or through it. If nothing within you stays rigid, outward things will disclose themselves.


Empty your mind, be formless. Shapeless, like water. If you put water into a cup, it becomes the cup. You put water into a bottle and it becomes the bottle. You put it in a teapot, it becomes the teapot. Now, water can flow or it can crash. Be water, my friend.”

[tubs]

Thanks for your opinion wheatking and errol. I think we should be carefull in the next little while don't be over extended the problem is I have been wrong for quite a few years now,but we all should be mindfull if you remember the early 80s. They weren't making any more land back then too. Alot of highflyers had farmsales.

[biglentil]

Canadian banks only need to keep 3.5% of all deposits on reserve in cash and equivalents. Its common practice for mortgage brokers and their clients to fudge the income declarations to qualify for something they otherwise would not of. That may of worked when interest rates were 2 percent, but those terms are coming due and the rate is now 7%. When the tide goes out we get to see who is swimming naked.

[biglentil]

No deflation anywhere in sight for U308. Anyone remember when I said about 3 years ago. "Either the lights go out or the Uranium price goes much higher"

[AlbertaFarmer5]

Wheatking, you speak of preparing oneself for a crash. What would you suggest? Cold Cash, Gold, Silver? I would imagine that cash would be king in a credit crash like 2008?

Always keep the bail in legislation in the back of your mind.
Unless of course you mean actual physical cash.
If the SHTF in a big way, along with bank bail ins, I expect a digital currency to be implemented on short notice, and even physical cash wouldn't be safe or useful.