Gyroscopic Investing

tomfoolery wrote: ↑Tue Nov 03, 2020 1:44 am I’m concerned the PP assets have become too heavily correlated with each other. Has HB discussed this possibility?

I have a proposed rationale for why it’s occurring but no solution other than stay the course.

Economy bad. Fed wants stimulus.

Gold goes up when the fed prints more money to serve as stimulus because inflation.

Stocks go up because economy kept alive by hand of the feds printing, putting money in people’s pockets to buy stuff and money in banks pockets to buy assets, like stocks.

Bonds go up because alongside printing money, fed buys government bonds, pushing yields down. If yields rise, then economy will crash so fed will buy as many bonds as necessary for yields to come down.

So I’ve been noticing all 3 assets move in tandem upward on either actual stimulus or increased probability of new stimulus. And when stimulus talks go sour, all 3 drop in tandem.

I’m concerned all 3 assets are in a bubble and cash won’t help because of devaluing the currency. Look at housing and food and healthcare prices. So if your 3 assets bubble pops and you have a bunch of cash that buys less stuff than before, you have all 4 down. I get that prices of some things are down slightly but housing, healthcare and food are 80% of my living expenses and at least half of the living expenses of most Americans.

There’s no better alternative to the PP, I guess. But I’m anticipating a 20% drop in my PP over the next year starting from right now.

I wish instead of the PP I had bought a house anytime in the last ten years and a few hundred thousand rounds of 9mm ammo. Because single family homes and ammo have outperformed every asset. 9mm up 400% in the last few months thanks to BLM rioting scaring people into needing guns. Or I mean the NRA brainwashing people that guns are the answer even though they’re more likely to shoot themselves than a bad guy, There, I covered both right and left views.

I read someone on Reddit telling how he bought his house 4 years ago and based on current housing prices in his neighborhood, his house has gone up so much in value that he made a profit of $1400 per month for the last 4 years to own his home after taxes/maintenance.

Actually... I do have the answer. Stock up on gold since that’s the one asset the fed can’t print. They can buy MBS and lower interest rates to prop up housing market, they can buy corporate bonds to prop up stock market, and make bubbles everywhere but the one thing that may not pop is gold. Since it’s actually rare.

Although gold miners do well in low interest rate environments since they can lease equipment more cheaply so maybe cost to mine gold will drop, leading to increased supply.

I guess we’re all just screwed lol

Smith1776 wrote: ↑Tue Nov 03, 2020 3:41 am This is especially true with U.S. stocks. Combine that with international diversification and you should be fine.

tomfoolery wrote: ↑Tue Nov 03, 2020 1:44 am I’m concerned the PP assets have become too heavily correlated with each other. Has HB discussed this possibility?

I have a proposed rationale for why it’s occurring but no solution other than stay the course.

Economy bad. Fed wants stimulus.

Gold goes up when the fed prints more money to serve as stimulus because inflation.

Stocks go up because economy kept alive by hand of the feds printing, putting money in people’s pockets to buy stuff and money in banks pockets to buy assets, like stocks.

Bonds go up because alongside printing money, fed buys government bonds, pushing yields down. If yields rise, then economy will crash so fed will buy as many bonds as necessary for yields to come down.

So I’ve been noticing all 3 assets move in tandem upward on either actual stimulus or increased probability of new stimulus. And when stimulus talks go sour, all 3 drop in tandem.

I’m concerned all 3 assets are in a bubble and cash won’t help because of devaluing the currency. Look at housing and food and healthcare prices. So if your 3 assets bubble pops and you have a bunch of cash that buys less stuff than before, you have all 4 down. I get that prices of some things are down slightly but housing, healthcare and food are 80% of my living expenses and at least half of the living expenses of most Americans.

There’s no better alternative to the PP, I guess. But I’m anticipating a 20% drop in my PP over the next year starting from right now.

I wish instead of the PP I had bought a house anytime in the last ten years and a few hundred thousand rounds of 9mm ammo. Because single family homes and ammo have outperformed every asset. 9mm up 400% in the last few months thanks to BLM rioting scaring people into needing guns. Or I mean the NRA brainwashing people that guns are the answer even though they’re more likely to shoot themselves than a bad guy, There, I covered both right and left views.

I read someone on Reddit telling how he bought his house 4 years ago and based on current housing prices in his neighborhood, his house has gone up so much in value that he made a profit of $1400 per month for the last 4 years to own his home after taxes/maintenance.

Actually... I do have the answer. Stock up on gold since that’s the one asset the fed can’t print. They can buy MBS and lower interest rates to prop up housing market, they can buy corporate bonds to prop up stock market, and make bubbles everywhere but the one thing that may not pop is gold. Since it’s actually rare.

Although gold miners do well in low interest rate environments since they can lease equipment more cheaply so maybe cost to mine gold will drop, leading to increased supply.

I guess we’re all just screwed lol

"According to China's National Foreign
Exchanges Administration China 's gold reserves have recently
increased. Currently, the majority of its gold reserves have been
located in the U.S. and European countries. The U.S. and Europe have
always suppressed the rising price of gold. They intend to weaken
gold's function as an international reserve currency. They don't
want to see other countries turning to gold reserves instead of the
U.S. dollar or Euro. Therefore, suppressing the price of gold is
very beneficial for the U.S. in maintaining the U.S. dollar's role
as the international reserve currency. China's increased gold
reserves will thus act as a model and lead other countries towards
reserving more gold. Large gold reserves are also beneficial in
promoting the internationalization of the RMB."

mathjak107 wrote: ↑Tue Nov 03, 2020 10:23 am Except for special situations the govt can only buy debt instruments , not stocks .the govt is not allowed to buy up private or public companies ..that would be communistic ....it would require congress to pass a bill