≈ The Mother of All Bubbles ≈
“[…] The FED and the S&P 500 had a baby together: MOAB, the Mother of All Bubbles.
“The Federal Reserve bailout program, QE, has ignited a perverse mechanism. By bailing out a whole failing system with humongous injections of money, it helped to create a gigantic pile of debt.”
“And who buys U.S. debt? Everyone, both in the U.S. and overseas. According to economist Doug Holtz-Eakin “The global financial system is built on the notion that U.S. Treasuries are absolutely safe assets.”. Mind you that U.S. Treasuries are considered the safest investment in the whole world, thus, not only mom and pop buy Treasury Bonds but also funds, and foreign governments help to keep the ≈$40 trillion U.S. bond market in perpetual motion.”
“The unique printing of a “Fugazi” currency, backed by nothing but trust, is the base of a pile of debt that represents ≈110% of the GDP. Couple it with rising interest rates aimed at taming the inflation which, in turn, appeared on the scene as a consequence of the heated economy after years of liquidity injection and you have the perfect bedrock for a collapse.”
This is an excerpt of the December edition of the Trading Justice Newsletter. Read the full post and download the gorgeous PDF here. Sign up to receive it in your inbox every month.
Chart of the Day
Who owns America’s debt?
We ask again: who buys U.S. debt? Everyone. From mom and pop to China, from Japan to Brazil and Bermuda, everyone likes to own some U.S. debt as it is the number one reserve currency in the world. What if China dumps this debt back into the United States? What if the entire world loses confidence in the US Dollar and dumps its debt back into the country? Yes, you guessed it right: Hyperinflation. Remember the first part of the Fugazi series? Fairy dust.
Video of the Day
How to Use Put Options as Insurance
Coach Noah explains what a Put Option is, how to and why you should use it as insurance.
Today’s Lineup
Women in Trading
Yes We’re Open for Business!
Tis the season traders! The most wonderful time of the year is once again upon us and as everyone one is busy getting their Christmas decorations and shopping lists checked off, Santa forgot to set his alarm close because the Santa Clauss rally we’ve come to expect is late for the party. It seems that by the time we actually get a rally if, in fact, we get one, we’ll be throwing out the Christmas trees and leftovers from the fridge. So what’s one to do when the norm is not the norm?
Traders Lounge 11am EST
Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.
The Coaches Show Replay
If you missed last night’s episode where Coach Noah and Coach Mark talked about How to use the Scouting Reports picks to choose which strategy to trade or would like to watch it again, check it out here.
Cash Flow Condors Master Mind Group 8:30PM EST
The Condors for Cash Flow system is a high probability option selling strategy designed to generate passive income over time. Join us tonight to go over next month’s orders.
Halftime Report 12:30pm EST
The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day and fun in a way that only Matt and Tim can deliver.
Market Recap 4:30pm EST
The Market Recap is designed to give you a quick overview of the day that was. While brief, this report is designed to cover all of the major events that drove the markets that day and help you plan for the trading day ahead.
Trading Justice Podcast Episode 298: Growth vs Value Investing
Today on episode 298 of the Trading Justice podcast your hosts Matt and Tim discuss the time-tested concept of value investing.
