Gold Is Trying To Breakout

Gold (SPDR Gold Trust ETF (GLD)) still looks like it wants to break out somebody is obviously trying to stop that from happening or somebody's don't really know who these sellers are but I do think eventually whatever their agenda is the markets are going to overwhelm it.

There Is No Way Out, A Crisis Is Coming

There is no way off of this monetary policy. Once you take this much drugs you can never get off, not without massive withdrawal and so nobody politically wants to deal with that because if the Federal Reserve were to actually not come to the rescue next time the stock market wouldn't just go down 50 percent like it didn't in 2008-2009, it might go down 80 or 90 percent.

Banks would actually fail I mean the government would actually have to default on its debt but I don't think that is gonna happen because nobody in power wants to let that happen and so the US dollar is gonna be sacrificed. But ultimately in sacrificing the US dollar the damage that's going to be done to the economy and to the standard of living of the average American is going to be much greater than had we just bitten the bullet and dealt with the financial crisis.

How Much Debt Can The US Withstand?

We got 20 trillion in national debt, why can't we go to 35 trillion? Why can't we go to 40 trillion? 

Why can't we just continue to increase the national debt? 

It reminds me of the old adage about how many straws can you put on a on a camel's back? You don't know until you put that final straw that's one too many and then you break its back. 

So, can we go to 25 trillion? Maybe. But can we go to 30 trillion? We're not going to know. At some point we're gonna break the back of the camel with all this debt and then we're gonna find out how much debt we can pile on and it's not going to be pretty because then we're gonna have a crisis.

Dollar Crisis, Sovereign Debt Crisis

This is the third gigantic bubble that the Federal Reserve has inflated and when this one pops it's not going to be the third time's the charm. It's gonna be three strikes you're out because I think that this bubble is too big to pop. It's the mother of all bubbles and when it bursts there is not a bigger one that the Federal Reserve is going to be able to inflate to mask these problems meaning that we can't kick the can down the road anymore we're gone we're going to have to deal with these problems.

I think the problem that we're going to be confronted with is going to be much worse than a financial crisis, it is going to be a dollar crisis and it is going to be a sovereign debt crisis where the bonds that people are worried about are not some subprime mortgage that some guy borrowed money to buy a house that can't afford. It's going to be the US government that people are worried about and the the the solvency of the government and the Treasury bonds.

The Appeal of International Stocks

People who are in the US stock market are overlooking much better returns from much better valuation levels that are happening overseas. So, I think people should take advantage of the overpriced US stock market plus the overpriced US dollar and sell and move money abroad get into the international markets. (SPDR S&P 500 Index ETF (SPY), Nasdaq 100 Index ETF (QQQ), iShares MSCI Emerging Markets Index ETF (EEM))

Stock Market: The Valuations Here Are Extreme

The valuations here really are extreme, the complacency is also extreme. I mean investors are willing to pay very high prices and have very little worry that the stock market is going to go down.

People have very short memories, I mean we've had two major 50% declines in the stock market this century. Since 2000 we've had the market cut in half twice and it could easily happen again yet nobody seems concerned. 

Related trading instruments: SPDR Dow Jones Industrial Average ETF (DIA), SPDR S&P 500 Index ETF (SPY), Nasdaq 100 Index ETF (QQQ), iShares Russell 2000 Index ETF (IWM)