When “Cash Becomes King” . . . .

[errolanderson]

Credit Suisse now issuing heavy caution of increased risk of sharp equity market correction . . . soon.

Repo (short-term) bank leading fire that the Fed is battling nightly with massive capital injections is not being controlled. Bank liquidity concerns are forefront.

Fed is now massively printing money via repo emergency injection and according to Credit Suisse, Fed may officially call it QE4 within the month. Fed rate cuts no longer have any impact (IMO). China now experiencing incoming bond market defaults.

Dennis Gartman parting words in his last newsletter . . . Get into cash.

Buffet apparently holding a large cash position.

Demand for equity market put options apparently surging as a protective hedge for large wealth positions.

Is this the big one or not? Have been watching this central bank manipulated financial situation explode to insane levels for several years now. But even the big boys are now starting to bark . . . .

One thing for sure, The Fed has built “one hell of a deck-of-cards” since the financial crisis of 2008. I’m concerned, your thoughts? . . . .

[malleefarmer]

Not answering your question but old saying ag first into recession first out this gonna put downward pressure on grain.

And stating the obvious grain bought on credit with LCs poorer counties have to be able to pay for it.

Enter stage right Russia with all sorts of deals for impoverished countries/buying agencies

Hopefully not to of topic mate

Geez I’d love to see a combine drop 20% in price overnight yep I’m in La La land

[SASKFARMER]

Canada is in a recession right now.

Slowest Xmas will be this year for retailers.

Go to a dealership and see how many are working sitting in there office or wondering what day the layoffs are coming.

Farmers are in a tight pickle you can see it.

Business is also having issues.

Gov can't keep going into debt. Canada has hit the Trillion.

[15444]

The big one?

Wake me up when the looting starts...

[errolanderson]

Personally, don't see any U.S. / China deal by Trump's Dec 15th deadline. This has turned into a staring match.

Some U.S. analysts say button-up your long positions, whether grains to oil to equities. There is risk of a broad-based commodity market pullback should nothing happen. But then again, any positive movement by Saturday nite would give markets a kick higher . . . but rallies won't hold regardless (IMO).

[biglentil]

The Fed has unfettered access to the printing press. Imagine you are playing the boardgame monopoly and everytime someone runs outa cash to pay debt the central banker hands em another wad of cash. The game would carry on and on and on. In the last 50 years the dollar has lost 95% of its purchasing power, but the game keeps on chuggin along.

[sumdumguy]

Errol, you use the word, “cash”. What is cash in today’s world? Cash in hand, money in the bank, liquid collateral?

[AlbertaFarmer5]

Errol, you use the word, “cash”. What is cash in today’s world? Cash in hand, money in the bank, liquid collateral?

And in what currency?

[errolanderson]

Errol, you use the word, “cash”. What is cash in today’s world? Cash in hand, money in the bank, liquid collateral?

Available liquidity whether cash in-hand, in cash accounts. Asset devaluation strengthens the position of cash. Availability to purchase assets for pennies on the dollar as this financial crisis takes deeper hold into 2020. This is already occurring.

Debt no longer generates growth in many industries, it has become a heavy liability, despite cheap money. Many promote gold. But the weakness of gold (IMO), deflation is its enemy. Gold thrives during inflationary times. Gold struggles to maintain rallies in a deflationary environment.

This will be very hard on the consumer debt-driven banking industry. Fallout already in-progress . . .

My two-bites . . . .

[AlbertaFarmer5]

Buffet has indeed been sitting in cash, and is missing out on a massive bull run. Far underperfromed the broader market:
https://www.cnbc.com/2019/11/01/even-obvious-way-for-buffett-to-solve-big-cash-problem-is-a-puzzle.html https://www.cnbc.com/2019/11/01/even-obvious-way-for-buffett-to-solve-big-cash-problem-is-a-puzzle.html
https://economictimes.indiatimes.com/markets/stocks/news/warren-buffetts-worst-year-since-2009-splits-investors/articleshow/71856808.cms?from=mdr https://economictimes.indiatimes.com/markets/stocks/news/warren-buffetts-worst-year-since-2009-splits-investors/articleshow/71856808.cms?from=mdr

Errol, I do appreciate you bringing actual economic information and starting the discussions here. It is such a pleasant change from the usual global warming Trolls. But, have you taken the time to check back through some of your old posts, to see how your track record has been for forecasting deflation, and stock market collapse? I just went as far as 2012, and didn't see any optimism all the way. In fact, in early 2012, with the DJIA at way less than half of today's value you were still warning about a stock market crash and related deflation. Climbing a wall of worry has never seemed as applicable as it does in this market, but relentlessly climb is all it does.

[errolanderson]

Buffet has indeed been sitting in cash, and is missing out on a massive bull run. Far underperfromed the broader market:
https://www.cnbc.com/2019/11/01/even-obvious-way-for-buffett-to-solve-big-cash-problem-is-a-puzzle.html https://www.cnbc.com/2019/11/01/even-obvious-way-for-buffett-to-solve-big-cash-problem-is-a-puzzle.html
https://economictimes.indiatimes.com/markets/stocks/news/warren-buffetts-worst-year-since-2009-splits-investors/articleshow/71856808.cms?from=mdr https://economictimes.indiatimes.com/markets/stocks/news/warren-buffetts-worst-year-since-2009-splits-investors/articleshow/71856808.cms?from=mdr

Errol, I do appreciate you bringing actual economic information and starting the discussions here. It is such a pleasant change from the usual global warming Trolls. But, have you taken the time to check back through some of your old posts, to see how your track record has been for forecasting deflation, and stock market collapse? I just went as far as 2012, and didn't see any optimism all the way. In fact, in early 2012, with the DJIA at way less than half of today's value you were still warning about a stock market crash and related deflation. Climbing a wall of worry has never seemed as applicable as it does in this market, but relentlessly climb is all it does.

You are right AlbertaFarmer, but the market has been highly manipulated by central bankers. As an analyst, you can see the curve in the road, but how long to get to the curve is a different story. Just like in the movie "The Big Short" the incoming mortgage crisis could be seen well in advance, but it took 2 extra years before fallout began. A lot of toe tapping in-wait . . . .

I'm a believer that true economics ALWAYS prevails, not matter how much central bank manipulation occurs. Yes, this process has taken much longer and the stock market is now artificially supported by money printing with insane valuations and this has contributed to the current wildfire repo crisis. But in reality, central bank Keynesian economics (taught in all financial schools) this has made the big picture economic situation far worse. 'Feed me now' is going to take a toll on the next generation's standard of living.

In 2015, I did pen an article for Country Guide on incoming deflation . . . a word that was unheard-of at the time. Call me wrong . . . but in my mind, not a chance . . . this dance is beginning in-earnest.

[bucket]

Errol

With the impending doom about to happen how will this affect agriculture in regards to grain prices ...they can't really drop further or there will be a lot of hurt????

[foragefarmer]

Eight years of predicating doom and gloom! Who are you and what credentials do you have to make these economic assertions. Are you a professional financial adviser? Have you personally had any success timing the markets while taking your own advice?

If you have been taking your own advice, what has that CASH you have held on hand earned you since 2012?

You mention Buffet for the first time in your economic synopsis that he is now holding a large amount of cash, what was he doing the last eight years, hoarding cash waiting for the big crash? No the majority of the time he as buying Blue Chips!

Yes there may be some sort of a correction to come, but for coming Agriville with your monthly predication of a cash is coming is like crying wolf over and over again!

[errolanderson]

Errol

With the impending doom about to happen how will this affect agriculture in regards to grain prices ...they can't really drop further or there will be a lot of hurt????

bucket, there will be rallies, but they won't hold in this environment.

Be prepared to price grain as markets are moving up . . . if you wait for the peak it'll be too late. Green peas are hot right now, so is canary seed. Durum looks quite good, but coming off recent highs. Flax may be a sleeper depending on Kazakhstan final production. Keep close to your buyers . . . watch for those weekend texts for premiums to fill near-term sales. Sales will come and go.

Without a China deal, beans appear vulnerable to near-term weakness. Moving grain will be a challenge this winter. Try to move where possible, bin quality a concern . . . you can always reopen the price ceiling with a broker . . . safer option plus it injects cashflow. Realize easier said than done . . . .

[errolanderson]

Eight years of predicating doom and gloom! Who are you and what credentials do you have to make these economic assertions. Are you a professional financial adviser? Have you personally had any success timing the markets while taking your own advice?

If you have been taking your own advice, what has that CASH you have held on hand earned you since 2012?

You mention Buffet for the first time in your economic synopsis that he is now holding a large amount of cash, what was he doing the last eight years, hoarding cash waiting for the big crash? No the majority of the time he as buying Blue Chips!

Yes there may be some sort of a correction to come, but for coming Agriville with your monthly predication of a cash is coming is like crying wolf over and over again!

forage . . . China commodity boom peaked in 2012 . . . it basically been all downhill since then. China consumes about 50% of global commodities. This was the beginning of deflationary pressures and slowing trade. I'm not making this up . . . this is now being reflected in local economies right now.