Margin debt has hit a new record of $937 billion dollars. The previous record was $935 billion in October of 2021. This is old fashioned leverage, borrowing against the rising value of your portfolio.
Dan, Margin debt of $937B seems like a huge number. But as of 01-01-25, the U.S. stock market was worth $62.2T. And during 2022, the U.S. stock market declined from $52.2T to $41.5T, yet the congressional Dems were able to avoid an electoral bloodbath Nov. 2022. A caveat here: The Fed continued in 2022 to pump money into the economy, and this most likely helped stave off the bloodbath; and, the leftist media went all in for the Dems. So if the stock market were to plunge in 2025, I assume the Fed would step in and juice things again. Or would they? You're well-connected to Big Finance players, so you would know much better than a nobody flyover like me about the Fed's likely moves.
And you used to talk about 401(k) contributions by present and retired employees that factor largely into keeping the markets pumped up. Are you seeing any shakiness here? How about stock market contributions from foreigners, foreign entities, or both?
Believe it. As high-priced as the market is. Much of that is honest money in the form of pensions, personal savings, etc. and a lot of it is greed, as Dan pointed out. If they make a serious effort to reign in M2, to which the price of Bitcoin is well correlated, you'll see what a real Ponzi scheme looks like.
If it's dollar-denominated, it's not "honest" money; it's "money" created by fiat. So far, despite its ever-declining value, everybody keeps tendering and accepting the "dollar" as if it's money, despite evidence wherever one looks that it's not: a 9 oz. bag of Fritos has a list price of $5.89 and sleeve of 12 cans of Coca-Cola has a list price of $10.99. A stripped, base F-150 (Bill Bonner's favorite example) is over $40 GRAND. So, the pensions, personal savings, etc. are likewise chimera. I get and appreciate your point, but we can't lose sight of the basic fact that the real game is getting real stuff for the the fake money. Best always. PM
Thank you. Nothing to argue with on your interpretation of (declining) dollar value. However, that is not what I meant by "Honest money". By that, relative to Bob's point, by honest I meant that it is long term invested in the market, countering his point of a Ponzi scheme. Face it, there are a lot of good to great companies out there with strong cash flow and assets, so I do question his use of the term "Ponzi scheme". To your point, the continued rise of stock prices bears out what you are saying-it represents a devaluation of the dollar.
It occurred to me after I wrote my comment that perhaps I should have understood "honest money" as "good faith" money, because it represents something at-risk that people are bringing to the capital pool of the stock market in the hopes of preserving and/or increasing it. And, yes, by all means, that is the original purpose of the stock market, before all the trading games took over. It's not the fault of the investors that their money isn't honest, even if their intentions are. Carry on, many thanks, and best always. PM
Yeah, it upsets me that advisory services never mention how many billions a year are pulled out of the market by computerized trading, not to mention the short selling. I buy as few stocks as possible and only after I'm convinced they are long term values given the above. The short term noise is tough to deal with.
Not being a math genius, will some one answer my same question. If no foreign entity shows up in May to buy our debt and our Federal Reserve is the only "entity" left to buy it, how will our dollar retain it's value? Let's hope that Elon has an answer or down the line we may find out what is "real" inflation, like they did in Argentina.
Let's see, Bretton Woods 1944, Nixon taking us off gold, Greenspan rewrites inflation calculation, Powell codifies "acceptable" inflation rate, and now we'll have a "Mar a Lago Accords". We are at one of those inflection points again. BTW Dan, "when he joined Bill and I" should be Bill and me.
Dan's a sincere guy, and he has excellent understanding and analytical skills; he is no writer in the traditional sense. It's easier just to "blue pill" your so-called left brain, when you read his column. Those of us who grew up on Warriner's and sentence diagramming, as well as reading classic authors, understand language. It all went away starting in the 70s. Best always. PM
Certainly this is the big question for savings and investments. What is the US government going to do, since they have the reserve currency? Thank goodness Trump is at least considering it, f---ing finally. I think the comment by Matt Smith that Trump is the adult where the prior admin was composed of children is right on the mark. I think that Trump considering this issue is very positive and drastically better than Kamala who wanted to provide an "Opportunity Government." Nice Try socialists!
We currently measure almost everything in dollars but if in the future we move toward devaluing the dollar 80% then all our "investments" are going to go into a huge state of flux. It undermines are entire thinking about where we can retain value for all of global society. I think considering this entire issue is the most important that investors can do.
There was a lot to digest in your excellent article Dan. So I used ChatGPT and ClaudeAI to unpack your thoughts. Then I did my best to put my words together into an article called "Trump's Plan," now that I understand it better.
This dovetails nicely into why Gold and Silver and our "Trade of the Decade" are still viable trades.
Dan, It was 9 a.m. this morning that I began "Degenerates........" I must say that this particular essay has a depth and complexity that I've had to return to it several times during the day. Most of the time I need three readings to absorb the maximum meaning and potential strategy.
It was not until 8 p.m. and the great interview with Addison Wiggins that I felt compelled to make a contribution by way of a comment.
I am reading a book that so far is a case study of history rhyming, if not repeating. Writer Dale A. Jenkins recently published a new history of the WW II era. He spent the evening with us last week before making a presentation to a local Navy History group. My brain has been overheated by the first 130 pages leading up to the attack on Pearl Harbor. What makes the book so unique is that he has penetrated the curtain of previously secret documents of the interwar era and WW II and provided "the rest of the story of the economic and political" realities to a level that I never imagined possible. The events before and through the 1930s and 1941 are astoundingly real, intimate, and shocking as to the diplomacy of an "America First" decade that had the Grey Swan consequences that resulted in Pearl Harbor and the subsequent Pacific War. The undermining of Roosevelt and the future that became America's future was delivered by agendas, deceptions, misallocation of current realities of those in a position to change the "inevitable" course of events. Those who were simply names in our education of that "history" become first hand narrators of what they thought, what they caused, and what the consequences became.
For an uncanny view of the political situation that we think we see today, this could be the most important book to allow your readers to get beyond the media noise and mis-direction playing out in 2025. And thanks for introducing us to Wiggins, of whom I have become an avid follower.
Good piece Dan. Between Glenn Beck and a Matt Smith piece this week plus what you outlined today.....it's a GREAT time to stay in lots of cash and the nasty old RELIC, ....GOLD!
Dan, Margin debt of $937B seems like a huge number. But as of 01-01-25, the U.S. stock market was worth $62.2T. And during 2022, the U.S. stock market declined from $52.2T to $41.5T, yet the congressional Dems were able to avoid an electoral bloodbath Nov. 2022. A caveat here: The Fed continued in 2022 to pump money into the economy, and this most likely helped stave off the bloodbath; and, the leftist media went all in for the Dems. So if the stock market were to plunge in 2025, I assume the Fed would step in and juice things again. Or would they? You're well-connected to Big Finance players, so you would know much better than a nobody flyover like me about the Fed's likely moves.
And you used to talk about 401(k) contributions by present and retired employees that factor largely into keeping the markets pumped up. Are you seeing any shakiness here? How about stock market contributions from foreigners, foreign entities, or both?
That's the question isn't it.
Do degenerate Bulls and degenerate bears dress up in the skins of other animals and mate out of season?
LOL. Thanks for the laugh.
You are most welcome!
If you go down in the woods today, you're sure of a big surprise
If you go down in the woods today, you'd better go in disguise
For every bear that ever there was
Will gather there for certain because
Today's the day the teddy bears get taught about GOLD…
I can't believe how long the Ponzi scheme known as the stock market has kept on inflating with no real fundamentals.
Believe it. As high-priced as the market is. Much of that is honest money in the form of pensions, personal savings, etc. and a lot of it is greed, as Dan pointed out. If they make a serious effort to reign in M2, to which the price of Bitcoin is well correlated, you'll see what a real Ponzi scheme looks like.
If it's dollar-denominated, it's not "honest" money; it's "money" created by fiat. So far, despite its ever-declining value, everybody keeps tendering and accepting the "dollar" as if it's money, despite evidence wherever one looks that it's not: a 9 oz. bag of Fritos has a list price of $5.89 and sleeve of 12 cans of Coca-Cola has a list price of $10.99. A stripped, base F-150 (Bill Bonner's favorite example) is over $40 GRAND. So, the pensions, personal savings, etc. are likewise chimera. I get and appreciate your point, but we can't lose sight of the basic fact that the real game is getting real stuff for the the fake money. Best always. PM
Thank you. Nothing to argue with on your interpretation of (declining) dollar value. However, that is not what I meant by "Honest money". By that, relative to Bob's point, by honest I meant that it is long term invested in the market, countering his point of a Ponzi scheme. Face it, there are a lot of good to great companies out there with strong cash flow and assets, so I do question his use of the term "Ponzi scheme". To your point, the continued rise of stock prices bears out what you are saying-it represents a devaluation of the dollar.
It occurred to me after I wrote my comment that perhaps I should have understood "honest money" as "good faith" money, because it represents something at-risk that people are bringing to the capital pool of the stock market in the hopes of preserving and/or increasing it. And, yes, by all means, that is the original purpose of the stock market, before all the trading games took over. It's not the fault of the investors that their money isn't honest, even if their intentions are. Carry on, many thanks, and best always. PM
Yeah, it upsets me that advisory services never mention how many billions a year are pulled out of the market by computerized trading, not to mention the short selling. I buy as few stocks as possible and only after I'm convinced they are long term values given the above. The short term noise is tough to deal with.
Not being a math genius, will some one answer my same question. If no foreign entity shows up in May to buy our debt and our Federal Reserve is the only "entity" left to buy it, how will our dollar retain it's value? Let's hope that Elon has an answer or down the line we may find out what is "real" inflation, like they did in Argentina.
Let's see, Bretton Woods 1944, Nixon taking us off gold, Greenspan rewrites inflation calculation, Powell codifies "acceptable" inflation rate, and now we'll have a "Mar a Lago Accords". We are at one of those inflection points again. BTW Dan, "when he joined Bill and I" should be Bill and me.
I understood him
Dan's a sincere guy, and he has excellent understanding and analytical skills; he is no writer in the traditional sense. It's easier just to "blue pill" your so-called left brain, when you read his column. Those of us who grew up on Warriner's and sentence diagramming, as well as reading classic authors, understand language. It all went away starting in the 70s. Best always. PM
Certainly this is the big question for savings and investments. What is the US government going to do, since they have the reserve currency? Thank goodness Trump is at least considering it, f---ing finally. I think the comment by Matt Smith that Trump is the adult where the prior admin was composed of children is right on the mark. I think that Trump considering this issue is very positive and drastically better than Kamala who wanted to provide an "Opportunity Government." Nice Try socialists!
We currently measure almost everything in dollars but if in the future we move toward devaluing the dollar 80% then all our "investments" are going to go into a huge state of flux. It undermines are entire thinking about where we can retain value for all of global society. I think considering this entire issue is the most important that investors can do.
Watch out Bill, if Dan is right, Trump will look pretty smart. Hope you’ll be ready and able to apologize.
Your skillful interweaving of a wide variety of illuminating charts, with your narrative...continues to thrill!
Ok
There was a lot to digest in your excellent article Dan. So I used ChatGPT and ClaudeAI to unpack your thoughts. Then I did my best to put my words together into an article called "Trump's Plan," now that I understand it better.
This dovetails nicely into why Gold and Silver and our "Trade of the Decade" are still viable trades.
https://lucaskandia.substack.com/p/trumps-plan
Dan, It was 9 a.m. this morning that I began "Degenerates........" I must say that this particular essay has a depth and complexity that I've had to return to it several times during the day. Most of the time I need three readings to absorb the maximum meaning and potential strategy.
It was not until 8 p.m. and the great interview with Addison Wiggins that I felt compelled to make a contribution by way of a comment.
I am reading a book that so far is a case study of history rhyming, if not repeating. Writer Dale A. Jenkins recently published a new history of the WW II era. He spent the evening with us last week before making a presentation to a local Navy History group. My brain has been overheated by the first 130 pages leading up to the attack on Pearl Harbor. What makes the book so unique is that he has penetrated the curtain of previously secret documents of the interwar era and WW II and provided "the rest of the story of the economic and political" realities to a level that I never imagined possible. The events before and through the 1930s and 1941 are astoundingly real, intimate, and shocking as to the diplomacy of an "America First" decade that had the Grey Swan consequences that resulted in Pearl Harbor and the subsequent Pacific War. The undermining of Roosevelt and the future that became America's future was delivered by agendas, deceptions, misallocation of current realities of those in a position to change the "inevitable" course of events. Those who were simply names in our education of that "history" become first hand narrators of what they thought, what they caused, and what the consequences became.
For an uncanny view of the political situation that we think we see today, this could be the most important book to allow your readers to get beyond the media noise and mis-direction playing out in 2025. And thanks for introducing us to Wiggins, of whom I have become an avid follower.
“Leverage in reverse is a cruel lover.” Wholesale casteration will figuratively ensue for many, Dan.
Good piece Dan. Between Glenn Beck and a Matt Smith piece this week plus what you outlined today.....it's a GREAT time to stay in lots of cash and the nasty old RELIC, ....GOLD!
Jim Marshall
Dan. The Mike/Mike conversation was absolutely incredible. What an eye opener!!!! Big thanks for sharing!!