Alright. I've got that out of my system. Happy Thanksgiving and back to work here with a Early Black Friday pallet cleansing mega thread with a Cornucopia of thoughts on 2021. First, precious metals aren't dead. Yes, Bitcoin is stealing gold's thunder as a... /1

...currency alternative but it's not going away as a dollar hedge though I see Bitcoin likely to outperform gold in 2021. That said, gold could be up over 50% by the end of next year as Yellen and Powell (Jack and Jill) are climbing the stimulus hills. Meanwhile.. /2
...silver really should kill it next year. Solar is heating up, not just with Biden's win, but globally, & with pent up demand unleashed as lockdowns either relax or get tossed aside via polite revolts. Industry is going to boom and with globalists back in business so are... /3
...green energy and rare earth metals. Yeah, looking at you $MP on rare earths and - dare I say it - $AG and miners might have their year come summer of 2021. Specs are going to sniff that out in January so look for December tea leaves on the metals. No shame in buying $SLV... /4
....but I really like playing options for it. Speaking of lockdowns, no I promised to behave, I think the by-product of lockdowns ending is that the torturous path of a decade plus of "deflation" (in name only really) dies in a supernova heat death of feels good man spending. /5
That means Powell & Yellen quickly pivot to dark thoughts of actually reversing course on rate hikes late next year as double digit inflation looms yet being paralyzed by pride..I mean politics as the Death of the Dollar finally sinks in with the last people left on earth to.. /6
..embrace what we've all known for years. Add in the LIBOR rate reset for next year, globalist calling for a global reset that will lead to MMT instead of the actual cancellations of middle class debts, & you have the makings of an inflaitonary disaster in 2022. It's a view... /7
...I've wished to be both vindicated on and yet continually wrong due to fact our world is going to be somewhere between "better than Mad Max" but worse than "1930s Dust Bowl." I've long underestimated the Fed's ability to play monetary musical chairs, however... /8
..it looks like the bill is quickly coming due in 2021. Where is the big play? Feels like gold & silver miners. Yeah, I said it. I hate them right now, but there's a leveraged upside play when the metals move AND the public's imagination is captivated (think 2010)... /9
I think we finally get the follow through in miners in 2021 as silver cracks $30. What about stocks? They'll do fine but not as well as pm's. That doesn't mean that crypto plays like $OSTK won't rocket higher should one of their crypto subsidiaries do well. Also watch bonds. /10
They'll be protected, like stocks, at all costs but can they? Can central banks print that much money and keep confidence in the Dollar's reserve status now that everyone is looking around doubting? We'll see. /11

More from Economy

The argument for deficits & debt raising interest rates in the US is not increased credit risk, it is that interest rates are a function of economic fundamentals, flows & policy. Deficits/debt change those.

I can't tell if I'm agreeing or disagreeing with @jc_econ.


Increasing government spending or reducing taxes increases demand (or reduces saving). This raises the price of loanable funds or the interest rate.

In a dynamic context, more demand means a stronger economy, the central bank raises interest rates sooner, and long rates rise.

(As an aside, we are not close to the United States needing to worry about credit risk and the risks are more overstated than understated in most other advanced economies too. But credit risk is not always & everywhere irrelevant, just look at the UK in 1976 or Canada in 1994.)

Interest rates have fallen over the last 20 yrs while debt has risen. This does not necessarily mean that debt rising causes interest rates to fall. It could also mean that other things have happened at he same time that pushed down interest rates more than debt pushed them up.

The suspects for these "other things" include slower productivity growth, slower popln growth, higher inequality, less investment, etc. All of which either increase the supply of saving or reduce the demand for investment, reducing the equilibrium interest rate.

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