Russell, i have seen you talking about a general structural regime change already in summer 21 (don't remember exactly when, but i think it was on RV). I also heard Russell Napier talking about a structural political change, but not only in China, (if i understood him correctly) but also in the west, specifically in the US. Now if we assume that this is correct, the interesting question would be what impact such policy has on asset prices. What is your take on this? And maybe it's worth a video, if you are interested :)
Additionally, do you think that the balance sheet run-off will have a negative impact on equity prices, regardless of the way the balance sheet is reduced? In example, doesn't it make a difference, if the US treasury finances the run-off mostly with the issuance of short term bills, or long term treasuries?
I think for the first time since 2016 the pieces are starting to fall into place for me. So most of my posts are trying to answer what you ask above- but as I am limited to 10min videos you have to piece it together yourself. The last piece is the nature of inflation itself... which I am working on now
Napier argues for Financial Repression to supress bond Yields. To do that the govt has to force Savings institutions to sell stocks and buy bonds, leading to a protracted sell-off in stocks. Russell Clark's arguments align with that given the political agenda changing to reduce inflation in the West and reducing inequality.
On my humble opinion, the missing part in all this is that we are, since 2017, in an ECONOMIC WAR, wich front line is the Supply Chains. The west will have, at some point in the very near future, to reignite a STRONG INDUSTRIAL POLICY, to speed up reshoring, onshoring and Nearshoring.... this has to be accounted for...
I am pretty sure reducing inequality will be inflationary. A strong industrial policy would also help reduce inequality - and would also be inflationary
Hi Russell, a question. I know the commodity futures and options clearinghouse provide credit intermediation in the commodities markets and have risk pricing power in the form of mandatory collateral requirements, but what is the equivalent in the equities markets? Is it the big prime brokers?
So this is the way I see it... with index related products clearinghouse have some influence. Individual stocks not so much. However, and particuarly in the US, equities follow corporate bond market very closely, and I think the clearinghouses have very strong influence of credit.
As I also understand it, banks have difficult having collateral requirements too different from clearinghouses these days, so the prime brokers have limited risk pricing power... especially in big liquid areas of the markets.
Well if the Democrats lose the mid-terms on the back of inflation concerns - I am pretty sure you are going to see the Fed come under pressure to do something...
Russell, I have followed Martin Armstrong for quite a few years now. His longer-term trend predictions are really very impressive. His thesis for many years has been that U.S. equities will remain bullish due to the European economy being such a disaster, and capital fleeing Europe for the U.S. due to its significantly better economic fundamentals. Furthermore, he notes how capital flees geographical locations at threat of war -- which only adds to the incentive for capital to flee Europe for the U.S. It also seems that Europe will suffer far greater commodity supply issues than the U.S. in coming years, so it will be interesting to see if this results in an even stronger flow of capital from Europe to the U.S. Have you done any analysis of global capital flows Russell? Armstrong's thesis seems valid, but I would be curious as to whether the hard data backs it up.
It looks to be true. I have been very surprised that the ECB has not reacted to spiking inflation in Europe. I am doing some work on this along similar lines...
Old at 38? (Christ). Seems like a possible pump in April is coming followed by a "sell in May and stay away" when the Fed tries / begins to tighten liquidity.
Russell, i have seen you talking about a general structural regime change already in summer 21 (don't remember exactly when, but i think it was on RV). I also heard Russell Napier talking about a structural political change, but not only in China, (if i understood him correctly) but also in the west, specifically in the US. Now if we assume that this is correct, the interesting question would be what impact such policy has on asset prices. What is your take on this? And maybe it's worth a video, if you are interested :)
Additionally, do you think that the balance sheet run-off will have a negative impact on equity prices, regardless of the way the balance sheet is reduced? In example, doesn't it make a difference, if the US treasury finances the run-off mostly with the issuance of short term bills, or long term treasuries?
I think for the first time since 2016 the pieces are starting to fall into place for me. So most of my posts are trying to answer what you ask above- but as I am limited to 10min videos you have to piece it together yourself. The last piece is the nature of inflation itself... which I am working on now
Napier argues for Financial Repression to supress bond Yields. To do that the govt has to force Savings institutions to sell stocks and buy bonds, leading to a protracted sell-off in stocks. Russell Clark's arguments align with that given the political agenda changing to reduce inflation in the West and reducing inequality.
On my humble opinion, the missing part in all this is that we are, since 2017, in an ECONOMIC WAR, wich front line is the Supply Chains. The west will have, at some point in the very near future, to reignite a STRONG INDUSTRIAL POLICY, to speed up reshoring, onshoring and Nearshoring.... this has to be accounted for...
I am pretty sure reducing inequality will be inflationary. A strong industrial policy would also help reduce inequality - and would also be inflationary
Hi Russell, a question. I know the commodity futures and options clearinghouse provide credit intermediation in the commodities markets and have risk pricing power in the form of mandatory collateral requirements, but what is the equivalent in the equities markets? Is it the big prime brokers?
So this is the way I see it... with index related products clearinghouse have some influence. Individual stocks not so much. However, and particuarly in the US, equities follow corporate bond market very closely, and I think the clearinghouses have very strong influence of credit.
As I also understand it, banks have difficult having collateral requirements too different from clearinghouses these days, so the prime brokers have limited risk pricing power... especially in big liquid areas of the markets.
Thanks for the insight Russell.
Yes, it's all about politics, and a day can be a long time in politics, as they say.
As NATO members might see it, a market correction would also be a sign of weakness?
Will domestic politics align with international/NATO concerns for the US? If not, a very interesting choice remains ahead.
Well if the Democrats lose the mid-terms on the back of inflation concerns - I am pretty sure you are going to see the Fed come under pressure to do something...
Russell, I have followed Martin Armstrong for quite a few years now. His longer-term trend predictions are really very impressive. His thesis for many years has been that U.S. equities will remain bullish due to the European economy being such a disaster, and capital fleeing Europe for the U.S. due to its significantly better economic fundamentals. Furthermore, he notes how capital flees geographical locations at threat of war -- which only adds to the incentive for capital to flee Europe for the U.S. It also seems that Europe will suffer far greater commodity supply issues than the U.S. in coming years, so it will be interesting to see if this results in an even stronger flow of capital from Europe to the U.S. Have you done any analysis of global capital flows Russell? Armstrong's thesis seems valid, but I would be curious as to whether the hard data backs it up.
It looks to be true. I have been very surprised that the ECB has not reacted to spiking inflation in Europe. I am doing some work on this along similar lines...
Old at 38? (Christ). Seems like a possible pump in April is coming followed by a "sell in May and stay away" when the Fed tries / begins to tighten liquidity.
But if you think I look 38 - i take that as a win!
48....
Well less grey hair than I do for sure :-)