{"id":1158105,"date":"2020-01-03T16:47:52","date_gmt":"2020-01-03T22:47:52","guid":{"rendered":"https:\/\/dailyreckoning.com\/?p=108783"},"modified":"2020-01-03T16:47:52","modified_gmt":"2020-01-03T22:47:52","slug":"revealed-the-trade-of-the-decade","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=1158105","title":{"rendered":"REVEALED: The Trade of the Decade"},"content":{"rendered":"

This post REVEALED: The Trade of the Decade<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n

Dear Reader,<\/p>\n

Yesterday we snuck into the future… and smuggled out a worrisome vision:<\/p>\n

The S&P will end the decade 50\u201360% lower than where it began the decade.<\/p>\n

Our snooping revealed that \u201cmean reversion\u201d will run down the elusive stock market at last.<\/p>\n

That is, the long arm of statistical law will finally collar its man.<\/p>\n

Yet as we wondered yesterday: Can a \u201ctrade of the decade\u201d lock in your wealth?<\/p>\n

Can it be your Rock, your anchor against stock market catastrophe?<\/p>\n

If so… what can it be?<\/p>\n

Today we rip the wrapping paper off the trade of the decade.<\/p>\n

But first, what other visions did our adventure into the future reveal?<\/p>\n

Here is a brief sketch of the 2020s as we saw them, a tour of the horizon\u2026<\/p>\n

The Next Two Presidential Elections<\/b><\/h2>\n

President Trump will retain his throne this November.<\/p>\n

The economy will gutter along before sinking into woeful recession in 2022 or early 2023.<\/p>\n

The Federal Reserve will leap to action. Interest rates will go to zero \u2014 and yes, below zero.<\/p>\n

Quantitative easing on the scale of the Marshall Plan you will see.<\/p>\n

But all attempts will be vain.<\/p>\n

The Federal Reserve will stand discredited, embarrassed, helpless.<\/p>\n

In the 2024 presidential election, the American people will invite in a \u201cprogressive.\u201d<\/p>\n

He\/she\/hir, we could not identify the winner \u2014 the haze was thick, the picture grainy \u2014 will sign into law some version of Modern Monetary Theory (MMT).<\/p>\n

It will differ vastly from the Federal Reserve\u2019s quantitative easing. Quantitative easing was contained within the banking system. It largely prospered Wall Street… and largely bypassed Main Street.<\/p>\n

The American people were left to scratch by on the leavings.<\/p>\n

But MMT promises to pour money directly onto Main Street \u2014 and Maple Street and Oak Street and Pine Street and Birch Street.<\/p>\n

Everything for Everyone <\/b><\/h2>\n

The print press will go into fantastic and ceaseless operation. It will promise to fan a roaring whirlwind of prosperity.<\/p>\n

Off the presses will fly the wherewithal for Medicare for All, universal college education, guaranteed employment at $15\/hour, a Green New Deal, etc.<\/p>\n

It will give a good original impression. The economy will jump, thrill and excite\u2026 after dozing lo so many years.<\/p>\n

And the authorities will finally have their 2% inflation, sustained.<\/p>\n

MMT will receive a highly favorable press. What ogre, what misanthrope, what dastard could be against it?<\/p>\n

But a paper prosperity is a false prosperity. It is the eternal quest to lunch for free\u2026 and the immemorial dream of cranks.<\/p>\n

That world has no existence\u2026 at least not upon this Earth.<\/p>\n

MMT will give an overall increase of the price level \u2014 but without a corresponding increase in goods, products and services.<\/p>\n

The Stirrings of Inflation<\/b><\/h2>\n

After decades of muted (official) inflation, inflation\u2019s initial gurglings and bubblings will catch the American people off their guard.<\/p>\n

But after some hard experience, they will recalibrate their expectations. They will begin to hunker in against the expectation of rising prices.<\/p>\n

A chance spark will light an inflationary brush fire. It will soon jump the perimeter. Before long it will spread like prairie fire\u2026 carried along by the gusting winds of sentiment.<\/p>\n

And so MMT will ultimately kindle a fine inflationary blaze.<\/p>\n

The authorities will be eager to get water on it. But they will discover it rages beyond all control.<\/p>\n

Can it happen so fast? Yes, it can happen so fast.<\/p>\n

Explains Jim Rickards:<\/p>\n

MMT advocates also seem to think inflation can be dialed back or tweaked at will. Maybe they\u2019ll say we\u2019ll only spend $90 million on a Green New Deal instead of $97 trillion. They think they can dial it down. But they can\u2019t. Once inflationary expectations set in, they take on a life of their own. It\u2019s a nonlinear system.<\/i><\/p>\n

It\u2019s like moving the control rod in a nuclear reactor. If you get it wrong by just a little, you can melt the reactor down and kill a million people… <\/i><\/p>\n

Inflation is not a linear phenomenon but a nonlinear phenomenon that can spiral out of control before you can do anything about it.<\/i><\/p>\n

The fiscal authorities will truly have a tiger by the tail. But what can they do?<\/p>\n

No Good Options<\/b><\/h2>\n

They can kink off the oxygen feeding the fire. That is, they can turn off the print press.<\/p>\n

But a paper prosperity requires ever-increasing amounts of paper. Shutting down the press would murder it.<\/p>\n

The late-lamented Paul Volcker put down inflation in 1981 by lifting interest rates to 20%. But the debt level then prevailing was a trifle \u2014 a pimple against today\u2019s Matterhorn.<\/p>\n

Today\u2019s creaking, debt-addled economy may not withstand 5% rates\u2026 much less 20%.<\/p>\n

But if authorities let the fire run, it may burn until nothing remains to burn.<\/p>\n

What will they decide?<\/p>\n

It is at this point \u2014 2027 or 2028 \u2014 that our vision of the future turned to static.<\/p>\n

And perhaps it is just as well, given the hell-mouth scene we report.<\/p>\n

\u2018It Can\u2019t Happen\u2019<\/b><\/h2>\n

You may laugh the preceding out of court. The \u201cexperts\u201d certainly will.<\/p>\n

But did the experts foresee the 2001\u201302 dot-com smash-up? Did those same experts holler about a subprime mortgage crisis beforehand?<\/p>\n

And how many would have told you this in 2007?<\/p>\n

That negative interest rates would soon become reality\u2026 or that \u201cquantitative easing\u201d would soon become a household term?<\/p>\n

Indeed\u2026 how many would have told you Mr. Donald J. Trump would one day be president?<\/p>\n

Yet they came to be, all of them.<\/p>\n

Do you wish to peer around the next bend? Do you wish to steal an unauthorized glimpse of the future?<\/p>\n

Then you must range out ahead of the herd. You must venture out upon the thin, spindly branches, risking a fall. You must shoo away consensus.<\/p>\n

And you may need to fall in with disreputable company. As our co-founder Bill Bonner recently reminded us:<\/p>\n

To find the new truth, we have to go far out on the knowledge spectrum to the edgy part\u2026 the shady and speculative part\u2026 where the kooks, geniuses and gurus are.<\/i><\/p>\n

Come we now to the \u201ctrade of the decade\u201d…<\/p>\n

The Candidates <\/b><\/h2>\n

Is the trade of the decade some promising, youthful technology company?<\/p>\n

Is it a manufacturer of driverless autos, or artificial intelligence?<\/p>\n

Is it a wager on China \u2014 or a wager against China?<\/p>\n

Is bitcoin the trade of the decade \u2014 or a rival cryptocurrency?<\/p>\n

None of these is the answer. Then what is the answer?<\/p>\n

Colleague Byron King recently sat at a business meeting where Mr. Bonner was likewise sitting.<\/p>\n

During the proceedings Byron cleared his throat, faced Mr. Bonner… and requested his trade of the decade:<\/p>\n

\u201cWell,\u201d he said\u2026<\/i><\/p>\n

\u201cWhen I look at what\u2019s going on with the world, with the U.S. dollar, politics, everything\u2026\u201d<\/i><\/p>\n

The room was silent. You could hear a pin drop. You could detect the vibe of grinding vertebrae as people strained their necks to pick up on Bill Bonner\u2019s latest Trade of the Decade\u2026<\/i><\/p>\n

Mind you \u2014 gold was Mr. Bonner\u2019s trade of the previous decade. It was also his trade of the decade prior.<\/p>\n

Did gold satisfy its advertising?<\/p>\n

\u201cIf you followed Bill Bonner\u2019s Trade of the Decade for 2000\u201309,\u201d Byron reminds us, \u201cyou more than tripled your money, in terms of dollars.\u201d<\/p>\n

Plenty handsome. But what about the decade just vacated?<\/p>\n

\u201cIf you bought into Bill\u2019s Trade of the Decade for 2010\u201319, you went from $1,100 to just over $1,500, or a 36% gain\u2026 admittedly with a ride.\u201d<\/p>\n

The Trade of the Decade<\/b><\/h2>\n

So what is Mr. Bonner\u2019s trade of this freshly hatched decade? Has he found an alternative to gold?<\/p>\n

In Mr. Bonner\u2019s own words:<\/p>\n

I\u2019d have to say stick with gold. I can\u2019t think of anything else that\u2019s as well set up to hold value and deliver gains.<\/i><\/p>\n

Thus you have your trade of the decade \u2014 gold \u2014 ancient, fusty, unresponsive, unglamorous gold.<\/p>\n

Gold will provide you a potent antidote to the monetary toxins above described. And if the stock market is knocked flat this decade?<\/p>\n

Gold should help keep you upright.<\/p>\n

Thus we speak our piece for gold.<\/p>\n

Might we report a faulty vision of the future?<\/p>\n

It is entirely possible. Our eyes have failed us before.<\/p>\n

If erring, we find solace in this one supreme fact:<\/p>\n

We face no consequences for our botchwork.<\/p>\n

On Jan. 3, 2030 \u2014 10 years from today \u2014 no living soul will recall a single word we wrote this day.<\/p>\n

But if proven correct, we will be certain to remind you…<\/p>\n

Regards,<\/p>\n

Brian Maher
\nManaging editor, The Daily Reckoning<\/i><\/p>\n

The post REVEALED: The Trade of the Decade<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

This post REVEALED: The Trade of the Decade<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n

Trump will win reelection this year. But who will win in 2024?…<\/p>\n

The post REVEALED: The Trade of the Decade<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n","protected":false},"author":16,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[366,463,1806],"tags":[],"_links":{"self":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1158105"}],"collection":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/users\/16"}],"replies":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1158105"}],"version-history":[{"count":1,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1158105\/revisions"}],"predecessor-version":[{"id":1158107,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1158105\/revisions\/1158107"}],"wp:attachment":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1158105"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1158105"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1158105"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}