Grandich Observations

Posted by on June 2, 2017 - 11:16 am

Per my “Come To Jesus” commentary, I’m returning to publishing far more financial markets “observations” (I remain out of the prediction racket, as God is the only one who truly knows the future) than I have been providing ever since ending the Grandich Letter (after an almost 30 year run).

But please!!!!!!  Don’t treat it as investment advice – but just some thoughts of a “former” Wall Street Whiz Kid.

Overall Assessment – It’s been my opinion that America has entered its worst-ever political, social and economic period. While the “highly-inflated” stock market has masked a far weaker economy than the “Don’t Worry, Be Happy” crowd on Wall Street (and much of the financial media who reported on them as “lapdogs”) want to admit too, we can already see the political and social upheaval right before our eyes.

America has been robbing Peter to pay Paul, but Peter is tapped out. Yes, public storage is the poster child for what’s wrong with America; but the fact that has become so politically incorrect to state – the loss of our once “Judeo-Christian” ways, is the ultimate culprit!

And let me again re-emphasize from a blog post earlier today – here

U.S. Stock Market – What a shock, the employment picture isn’t all the “happy” people crank it up to be. If you stop and think, trillions of new debt was created to supposedly “boost” the economy, and all we get is low-wage growth and anemic true job creation (outside of low-paying, low-skilled employment), you would think there’s a “negative” price to pay sometime in the future? Only on Wall Street can you find “happy-hawkers” spinning this into good news.

But while just about all fundamental bearish factors have been ignored, and the stock market has kept rising (albeit via a relatively small number of participating stocks), rest assured, if history is any indication, this time won’t be different and the stock market finally reacts much lower to the realities (versus runs much higher on continuing fantasies).

U.S. Bonds – Treasuries and only high-grade muni’s if you must. Just remember, the bond market has been a much better “forecaster” than the stock market and it’s screaming the inflation trade is a pipe dream (just look at base metals for starters).

U.S. Dollar – I spoke at the start of the New Year, that it was one of the most “overcrowded” trades I’ve seen in my “third of a century” in and around Wall Street. I felt it was best to be a lone wolf and avoid what will become a “sinking ship”. That ship has sprung a leak!

Gold – I started the New Year believing gold would outperform both stocks and bonds in 2017 and remain quite pleased with that assumption. I noted recently it was suggesting a challenge of the $1300 area and today’s action supports that target.

Unlike when I had a built-in bias towards metals no matter how objective I truly was, I don’t represent anything that benefits from “doom and gloom forecasting” (metals, mining shares, dry food, log cabins in the woods, guns, ammo…..) for a few years now. I simply believe gold is in the earliest stage of a mega bull market, which has several years in front of it, and ultimately new, all-time highs as its target.

An important side note on gold – price rigged for decades, it’s finally coming to light. The dynamics of who’s influencing the gold market, continues to change (hopefully for the better).

Base metals are a different matter. Look for them to under-perform gold for at least the balance of 2017.

Oil – Hard to make a case of anything more than a trading range of $40 – $60 (and more likely to spend more time closer to $40 than $60 for the rest of 2017).

Please note – I’ve begun the process to create a separate blog (or new website) for just secular market and economy posts, and this blog will become all other matters once the new blog is up and running. That remains at least several weeks from now.

And finally, the interview (ABC’s Good Morning America’s first interview) that started my long climb to half-famous fame, millions in new income (that I managed to lose not once, but twice) and being a legend in my own mind (until God’s Grace allowed me to start focusing on how to spell “humble”, instead of how to make more money).



Posted in: Matters of Finance, News
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