Guru corner

Göran Högbergs Guru corner.

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(Man behöver inte läsa allt detta på en gång, men eventuellt kan det vara trevlig läsning när man skall somna på kvällen så går detta fortare och framförallt drömmer man trevligare.)

Michael Bloomberg spent more than $500 million on ads, and virtually no one voted for him. Contrary to what leftists insist about how "capitalists use advertising to force people to buy things," advertisements don't actually compel people to do anything.

My hunch is, in terms of dollars, the stock market will bounce around a lot and end up being dead money for the next decade.

When Bill began warning that stocks would fall in terms of gold, the Dow-to-Gold ratio was over 40.

When I started warning that stocks would fall in terms of gold, the Dow-to-Gold ratio was over 20.

The ratio was at 15 earlier today.

Although consensus building surely is an important and noble pursuit, one would think that it wouldn't really fall within the purview of a central bank president. It’s been clear for a long time that allowing politics to influence monetary policy carries significant and numerous risks.

Why did Europe go from a poor backwater to an economic and technological powerhouse? A major factor was its lack of any centralized government, and a large number of small competing states.

By being so dovish for so long, the Fed has greatly limited what it can do in case of recession without resorting to untried and radical solutions like negative rates.

The bottom line is, I don’t want to participate in this toxic mess. I want to sit on the sidelines in physical gold and get on with my life… until the next time I can buy stocks in an environment that’s much more likely for long term returns.

The Fed cut rates by half a percent today. The press is calling it a “surprise” rate cut, but it wasn’t a surprise to us. I wonder what they’re going to do next. As you know if you’ve been reading these Postcards, there’s a lot more intervention to come…

That includes what we’ve been calling “curve control” and at least $5 trillion in freshly printed money (catch up here)… as well as some big bail-outs. I bet they’ll announce a big infrastructure upgrade plan soon, too.

Today's rate cut of 50 basis points is the largest rate cut since December 2008, in the midst of the aftermath of the financial crisis. But Chairman Powell insists the US economy is "strong.

There are echoes of the 1973 oil shock in the current virus scare and resulting economic seize-up. Central banks are likely to respond similarly: with "stimulus" and inflation.

Government spending overall—not just deficits—is the real problem. Government spending diverts wealth away from truly productive people and toward the government and its favored groups.

Trump is spinning a narrative in which ever larger government budgets—and ever larger piles of deficit spending—create jobs and make America "safe."

Two guys enter a bank wearing face masks.


Then one guy yells: “Don’t worry, this is just a hold-up.”

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