The deficits over the last year and now projected into the next few years are going to push up interest rates. From Egon von Greyerz at goldswitzerland.com:
Well, right on cue, it looks like the endless creation of fake money by the Fed has now poisoned both the stock market and the bond market. The Dow was down 1,000 (3%) points in two days and the Nasdaq down 7% in two weeks.
Gold and silver are also falling in sympathy. This was expected short term, but the outlook for the precious metals look excellent as I will discuss later.
Is this what the 16th century Swiss doctor Paracelsus ordered? It certainly looks like it. He told us that too high a dosage of anything is toxic. And with a world flooded with toxic money with little value, the levels of poison have reached extremes.
The toxic financial system needs to be cleansed but as we have warned many times, this will have dire consequences for the world.
FRANTIC STOCK BUYING BEFORE THE MUSIC STOPS
Buy high and sell low is the mantra of many investors. And as the stock market surges – buy more! And when it falls, buy still more.
But this time, the method of always being long, which has been fool proof for decades and underwritten by the Fed, will fail hopelessly. Whether investors buy on strength or buy the dips, they will get slaughtered.
As often the case at the end of a cycle, we have in recent weeks seen frantic buying of anything that moves just like with tech stocks in 1999-2000.
Just look at the incredible 16 week inflow to stocks of $414 billion. This is 2X the 2018 peak of $200b and an all-time record.