Stock Market: The Trump Rally

Where Trump is is getting into trouble is by claiming that the stock market going up is no longer a bubble that now this is just a real bull market that reflects the improvement of the fundamentals since he's been elected.

That's not the case. This is simply more air into the same bubble and this bubble is going to burst and I think unfortunately now that Trump has branded it you know just like it was one of his buildings he's put the big Trump marker on it, when this thing pops it's he's gonna have to take the blame. (SPDR S&P 500 Index ETF (SPY), Nasdaq 100 Index ETF (QQQ), SPDR Dow Jones Industrial Average ETF (DIA), iShares Russell 2000 Index ETF (IWM))

Oil Prices Are Moving Higher

Oil prices got above $58 a barrel for the first time in over two years, a very strong oil market and if you look at the chart if we get above 60 dollars, I mean that's kind of a long -term moving average on a monthly chart, 60 to 75 was a key high from about two and a half years ago, if we take that out we can have a quick move up .

Remember the move down, oil fell from a hundred down to under 30 in about six months and then it's been recovering slowly ever since but if we can break through decisively that sixty to seventy-five we're gonna move up.

Gold Is Trying To Breakout

Gold (SPDR Gold Trust ETF (GLD)) still looks like it wants to break out somebody is obviously trying to stop that from happening or somebody's don't really know who these sellers are but I do think eventually whatever their agenda is the markets are going to overwhelm it.

There Is No Way Out, A Crisis Is Coming

There is no way off of this monetary policy. Once you take this much drugs you can never get off, not without massive withdrawal and so nobody politically wants to deal with that because if the Federal Reserve were to actually not come to the rescue next time the stock market wouldn't just go down 50 percent like it didn't in 2008-2009, it might go down 80 or 90 percent.

Banks would actually fail I mean the government would actually have to default on its debt but I don't think that is gonna happen because nobody in power wants to let that happen and so the US dollar is gonna be sacrificed. But ultimately in sacrificing the US dollar the damage that's going to be done to the economy and to the standard of living of the average American is going to be much greater than had we just bitten the bullet and dealt with the financial crisis.

How Much Debt Can The US Withstand?

We got 20 trillion in national debt, why can't we go to 35 trillion? Why can't we go to 40 trillion? 

Why can't we just continue to increase the national debt? 

It reminds me of the old adage about how many straws can you put on a on a camel's back? You don't know until you put that final straw that's one too many and then you break its back. 

So, can we go to 25 trillion? Maybe. But can we go to 30 trillion? We're not going to know. At some point we're gonna break the back of the camel with all this debt and then we're gonna find out how much debt we can pile on and it's not going to be pretty because then we're gonna have a crisis.

Dollar Crisis, Sovereign Debt Crisis

This is the third gigantic bubble that the Federal Reserve has inflated and when this one pops it's not going to be the third time's the charm. It's gonna be three strikes you're out because I think that this bubble is too big to pop. It's the mother of all bubbles and when it bursts there is not a bigger one that the Federal Reserve is going to be able to inflate to mask these problems meaning that we can't kick the can down the road anymore we're gone we're going to have to deal with these problems.

I think the problem that we're going to be confronted with is going to be much worse than a financial crisis, it is going to be a dollar crisis and it is going to be a sovereign debt crisis where the bonds that people are worried about are not some subprime mortgage that some guy borrowed money to buy a house that can't afford. It's going to be the US government that people are worried about and the the the solvency of the government and the Treasury bonds.