Psychedelics are the new bull market. Because when vodka, marijuana, and opioids can no longer drive the bull market, it's time for the hallucinogens...
Jerome Powell and Janet Yellen meeting to discuss monetization of the debt:
It wouldn't be tax day if I didn't show a chart of the deficit over tax receipts. As of the end of 2020, the deficit is 60% larger than tax receipts. For those conservatives who are constantly bitching about taxes, it could be a lot worse.
The good news is that per the rules of Japanification, deficits no longer matter. Therefore I have no idea when today's fiat currencies will implode since Japan has been doing this for three decades straight.
If I were to guess, I would say that the world will not escape the paradigm of deflation until there is a global middle class. And currently we are headed in the opposite direction, so don't hold your breath.
Which gets us to the usual "inflation" hysteria. It seems that in May the hysteria has reached new heights as we see via Google trends. The inflationists have "won" the war of words and therefore the inflation trade is a one-sided trade now.
Cyclicals have closed above the 50 day moving average every day since the election, and the streak continues as more and more money piles into this one sided trade.
The obligatory delusion is that a post-pandemic economy will be far more robust than the pre-pandemic economy. You have to be brain dead to believe it, hence it's a consensus trade particularly on Wall Street.
I made note of the fact on Twitter that gold miners are making new monthly highs which follows the same pattern from last year. They lagged, and then they played catch up at the end of the repo bailout rally.
One year ago, as the pandemic was raging across the world, gamblers were betting that central banks could save markets and therefore their ONLY concern was "inflation".
And then they imploded because it was all a delusion.
The same as it is now.
Which gets us to Tech stonks which are essentially bidless aside from recurring short covering rallies. Betting that Cathie Wood will implode is a very crowded trade and Elon Musk appears to be on the side of the bears.
Recall that May is the month when the Momentum "Factor" trade will swap out Tech stocks for cyclicals. What fools call "Momentum Value", which happens to be an oxymoron, appropriately.
The definition of insanity is betting on bigger and bigger asset bubbles, each time expecting them not to explode. In addition, betting that a post-pandemic economy will be better than a pre-pandemic economy, while growth stocks go bidless.
Put it all together and it's a recipe for totally "unforeseen" disaster.
In summary, the fake inflation trade is massively overbought and overbelieved. At its epicenter is the belief that cryptocurrencies are a safe haven from central bank money printing. The same cryptos that were 100% correlated to stocks one year ago in the March crash. Either today's gamblers were not around a year ago, or they are serial idiots.
Or maybe they just want to con a bunch of fools into a well known Ponzi scheme.
Again.
In all fairness, today's crypto speculators are merely the logical next step for a society determined to achieve effortless wealth. They are one step beyond the monetary inflated Dow Jones Illusional Average.
Can over-leveraged Ponzi schemers in a $2 trillion weaponized crypto explosion initiate the larger global $200 trillion thermonuclear asset meltdown?
They will try.
