I am breaking this out to a separate page where I want to try and detail the case evidence against a bullish economy, at this time. There will be times where bear rallies come in and make me look like a clown. C’est la vie. What has me perplexed is the level of bullishness I have seen some have, coupled with the criticism of those who are somewhat permabearish to the extreme.

  1. Repo issue. The thing that got me all in was the repo issue on 9/16/2019. Long story short, banks didn’t trust each other’s collateral, and the government had to step in to prevent the banking sector from essentially grinding to a halt. The government was using $40-$50b to keep this thing going.
  2. Policy. What has been taking place since then is not economic policy that follows any real doctrine. It all appears to be guesswork, reading lagging data, gaslighting everyone into believing all is well.
  3. Crazy bubbles inflated with trillions of spending to prevent a Great Depression
  4. The worst inflation in 40 years because of this, debt now over $32T
  5. A Fed balance sheet at $9T
  6. Hyper real estate bubbles in a lot of major metros – leading to the eventual collapse of AirBnB ST rental vacation housing in a lot of big markets
  7. A collapsing commercial real estate sector
  8. The BRICS conglomerate being more aggressive recruiting countries to ditch the dollar
  9. The dollar as a measure of reserve currency, is down a ton over the last few years.
  10. A significant draw down with a bank run in progress (check M2 money stocks) – leading to a worse banking crisis in the first 4 months of 2023 than all of 2008 and 2009 combined
  11. Loss of confidence in the markets with the nickel fiasco with the LME and “tamping down” silver prices tells me there’s no such thing as free markets anymore. You cannot bet a free market. You have to follow Pelosi’s investments, and get out of markets when Fed Governor’s do.
  12. Complete loss in confidence and faith of government statistics. We are now at a point where my full faith is that these numbers are now dog and pony shows to push algos the direction they want, and the lemmings are herded in the direction the conductor wants them to go. My understanding of this problem started with the food pyramid and now is in the camp of CPI and jobs numbers. I believe they can hide things for so long – but the numbers are meant to gaslight people into believing all is well to continue consumer confidence. Meaning, I believe the swamp believes that if they can tell people all is well for long enough, it would graze over a bump. If they told the truth, it might cause panic and spiral they cannot get out of. I believe this rhetoric tool is the end of our system as we know it, because once the loss of faith in institutions is gone, your country is lost. We are on the cliff of lies and deceit. A gentle breeze takes us off of this.
  13. Breakdown of enforcing the laws. Summer 2020 were riots everywhere. In major metros now, they are refusing to arrest people committing crimes. You cannot have commerce in this environment, as rule of law is how our economy works – period. They are crashing this so they can come in and rescue with CBDCs or more control.
  14. Completely porous borders. This is creating chaos in this country, as we are being overrun with people who need services and no means of getting this to them without jacking up taxes for everyone. They aren’t legal citizens, so they should not be able to get work here.
  15. Culture wars that have gone bananas. Many of us need to find a way to retire before 65 as the business landscape is getting extremely difficult to navigate without getting sued. The rules are changing too fast, and there’s no guidebooks for what we have going on today.
  16. Massive purchases of gold by central banks since the end of the GFC. Take a look at this chart since 2009. Crazy. “Do as they do, not as they say”
  17. Loss of confidence in elections. This goes along with the stats above. There’s too many irregularities being seen the last few years, and anyone who sees these irregularities and tries to cite them is cancelled or banished from social media using the government as the means of censorship indirectly with social media sites. This is…troubling, considering my country’s past. What I mean by that is please understand why many countries hate us is that going back to the 1950s, our specialty in many countries was rigging elections and putting in people who were friendly to us. It’s an effective means of warfare against your foes where you don’t have to fire a shot. But it hasn’t occurred to the masses yet that this tool could have been used domestically. Against a person who vowed to fight them. The mere whisper of this thought can lead to bad things on social media. But once you understand markets are rigged and the government statistics are rigged, it’s not a big leap to get here. I’m not proclaiming it happened. I’m saying that the mere possible idea it happened is a really bad sign for the country and economy for a bearish case. Imagine the economic impacts of that story coming out. It can’t, because of the next thing.
  18. Media is owned by corporations, and corporations own politicians. Back with the 1890 Sherman AntiTrust act, they ensured companies could not get too big. Now, they are “too big to fail” and own all media. Meaning, you get saccharine news fed to you, and anything too disruptive to their balance sheets cannot be aired. As this is becoming more well understood – many are moving towards alternate media. This then has a better chance for “Deep Throat” types of stories to move quickly with the speed of the internet. Then, imagine the economic implications. To me, this is a lingering bomb that could go off any day, week, month, year. It is sitting out there waiting to strike. We are now seeing news channels chop talent all over the place. You can SEE many shows getting cancelled and drawn back due to budgets. Advertising is DOWN. Yet, none of these news shows will tell you we are in a recession AS they are getting fired for advertising being down. If you wonder why Janet Yellen was so confident that there would never be a recession again, it’s because they won’t permit the usage of the term. Even the generally accepted definition of recession was changed, AS A RECESSION HIT. These people are 100% in on the rhetoric plays. Meaning, by the time it cannot be denied anymore, it will be a steaming pile of shit all around you, and then people finally run for the exits. When does this happen? WE ARE IN A RECESSION. Yet, I’m fighting with idiot bulls on social media.
  19. The 4th turning. From my limited research with this, I feel I agree with a lot of people that we are approaching or in the 4th turning. My grandmother turned 96 on May 23rd, and she doesn’t recognize what this country is. The entitlement of everyone here and the lavish life everyone “has” to live to fit in, makes me sick. The younger generation has none of the wisdom of the Greatest Generation anymore. And they are doomed to repeat mistakes. Over and over. And – we are there. Meaning, the 4th turning is not a pleasant place to be. How bad can it get? Think what Germany, France, and England looked like after WW2. This was the impact of concentrated power making very bad missteps against the peoples’ wishes – with the people not able to object. Back then, to oppose, you might be shot in the head. Today, you are fired, cancelled, cannot get work – and they potentially suicide you. Meaning – no one can really oppose governments with too much power, at all, and all means to PREVENT this level of power get taken out. While I’m going off the rails here – the markets in this case can be simply shut down. If that isn’t a bearish case, I don’t know what is.
  20. Schiller P/E ratios have everything way overstretched, and since we have not had a recession since 2009, we may be due for a strong correction. The Dow had gone up 7x in 14 years, while the Nasdaq went up 16x. These things are due for strong corrections.
  21. The markets are propped up by only a few stocks which account for all of the major gains in 2023. I saw Gayed call this “concentration bias” yesterday. Most of the companies leading this charge are way over their skis with 100-200x pe ratio. I also think the JOB MARKETS are propped up through ridiculous stats. 14 months in a row of upside misses. Remember, the job MARKET is a market. And, they are rigging this too, to make you feel all is well. Drive the back roads in your state. I just did. Look at all of the land for sale. The RVs. The motorcycles. The toys. Everywhere you drive, this stuff is for sale. People are hurting and need the cash.
  22. Zombie companies everywhere with slim operating margins only in existence due to continuously rolling over cheap debt. As interest rates went from zero to 5% in like a year, this stands to reason as a lot of cheap debt rolls over, many of these companies will no longer be able to be solvent. This isn’t an IF but a WHEN. I had once read 38% of S&P are in this category. Could be wrong. Seems high.
  23. People moving out of California like they are trying to climb over the Berlin wall. There’s a reason.
  24. Reverse Repo. As if the repo wasn’t enough of a headache, as best I can understand this spaghetti mess, the government gave banks cash to hold for liquidity, and pay them interest on this cash. Make it make sense. The word you are searching for is liquidity.
  25. Inflation understated vs Shadowstats is hidden massive problem (from a reader). I talked above about not trusting government stats, but didn’t specifically point out CPI rigging. A few times they have literally changed how they measure inflation. If the TRUE nature of inflation was revealed, it would show a closer to “shadowstats” number – which essentially has the hollowing out of the middle class happening. You are moving away from the poor, lower middle, middle, upper middle, middle to poor, lower, and upper class over the course of 40 years. And the upper class might be the top 5-10% of earners. Meaning, as a middle class evaporates over time, this crushes their spending power and saving power. Your country gets poorer. Ultimately, this is not good for markets when there’s nobody that can afford to buy your products.
  26. Pension underfunded crisis (from a reader). You have millions of people with pensions, and many of these pensions are severely underfunded and may default. They will need to get bailed out. This model is broken. Meaning, if you are guaranteed $3,000 per month with your pension, and it’s guaranteed to pay you $3,000 – a time will come when they will default not through not paying you, but printing money in the basement to pay you and everyone else. This means the $3,000 per month in the future will pay your monthly grocery bills. It is a default through erasing your spending power with creating more money in the system to dilute your spending power. This means, in this situation, someone who felt they could retire comfortably with a pension either has to seek work or they stop spending on just about anything. Bearish for markets longer term. I believe at some point they will change the rules and just banish them. “But they cannot do that!”. This is what I’m getting at people. Check out how investors made billions on the LME nickel trade in 2022 and the exchange simply clawed back the trades because a Chinese investor was on the other side of that trade. When the trade goes against them now, they simply change the rules. This is why your pension bomb is deadly. Either you lose ALL spending power with the $3,000 or the simply change the rules and your $3,000 goes away.
  27. No politician can ever be elected again on austerity. This is bearish for markets longer term in the item below. However, in this scenario, the party in charge wants item X to have more funding and try and pay for it with taking funding from Y. Gridlock happens. X gets 75% of the additional funding they and Y gets 25% additional funding. In no case, today, has the punch bowl been taken away. We are looking at $2T deficits now and the arrogant fucks who think the world isn’t noticing our spending problem and pulling back from buying our debt are suffering from a recency bias in that the same that happened yesterday will happen to today, because. And the argument is pompous and arrogant. Because our system cannot stop spending, this is leading to problems the market doesn’t account for.
  28. Overall US entitlement debt of $150T (from a reader). While I do not believe this is bearish for markets, today, this has long term effects on a hyper inflation. Most think I’m doom and gloom for Great Depression stuff. While I do see a flavor of that happening, to some extent – to suck excess liquidity out of the system (Deflation) – ultimately, this is a doom loop. Which leads to lower tax receipts. And, with 27, greater yearly deficits. To ensure the safety of our nation, money bombers will come out with infrastructure plans and spend even trillions more. But there’s no one there to buy the debt at 8% because we have $4-6T deficits yearly now. Either the Fed monetizes the debt and takes their balance sheet to $10-$20T or the game is over. Today, our central bank is in the fight of its life to keep its credibility, and openly begging Congress to slow spending. By monetizing debt, the CB is taking on the water of excess spending and every dollar on its balance sheet means it is less relevant.
  29. Global Debt $300T+ (from a reader). This is to add to what we have in the last two. It seems all governments today are spending a LOT more than their means. At some point, the house of cards is going to collapse.
  30. Derivative bombs. Using Exter’s pyramid – IF there is a deflationary impulse, it stands to reason many derivatives will get wiped out. These can be side bets on side bets. And many believe much of this is dealing with tons of rehypothecation of the collateralized item. Simply put, imagine I take out a $100,000 home equity loan on my house and take it to the horse track to bet. Then, at the same time, I go to 100 other banks in the region and borrow $100,000 on the same house to bet at other tracks. With a massive deflationary impulse, I lose on all of these bets. When the banks come to seize the collateral, they are met with 99 other banks having a claim on the same house. Big picture, this is your precious metals market today – times perhaps 10.
  31. Highest number of bankruptcies since 2010?

32. Student loan payments resuming. I forgot about this, but this is also going to significantly reduce a lot of discretionary spending that people have. For example, my payment is $400 or so – this is less I can spend into the real economy. That will hit like a ton of bricks.

33. Fed raising rates two more times in 2023 and mentioned pivot may not happen for “a couple of years”. While I think many just interpret this as hawkish speak that he cannot enforce – he is being clowned day in and day out with the markets going up anticipating some pivot. “The beatings will continue until the morale improves” is where I see this going. I believe a big part of this inflation trapped cash in asset bubbles, and I’d trying to un-ring the bell.

I will continue to add to this list and add reader contributions. My goal here is to have a linkable resource that bears can share with their bull friends to suck the life out of their fun times. They are so hyper focused on a stock (Tesla) or sector (AI….tech) that they cannot see the train crashing. Speaking of trains. Imagine you are in a train that is a bullet train going 300 mph in Japan that is a mile long. A herd of moose wanders out onto the tracks. The front engine hits and nothing good happens. There’s impact, but the momentum of the train carries the entire mile length of train forward. To me, the impact was the repo market in 2019. And since that impact, the trains have still been moving forward at a high rate of speed, but a form of accordion structure is forming as derailing is inevitable. What all of you have seen with markets continuing to go up is that forward momentum. The accordion effect is the people in charge slinging shit against a wall trying to tell you all is ok, and eventually, the derailment starts. One can say further that perhaps the bank run that is going on is the first sign? The Fed untangling the balance sheet to also drain liquidity could be the second car?

When you understand the fuckery at play here, you can completely understand that if you are in the 84th car, the time where you are destroy could be 6 years from now. But you don’t know what car you are in, only that you are still moving forward. Every day you are long a lot of this is a probability of playing Russian roulette and losing. Are you in the 3rd car or the 500th?

My contention is this…

Most of American understands there’s some sort of trouble. But they put on CNNN and see Britney Spears just had her 38th child, Lady Gaga has gone back to wearing Meat Dresses, and Tom Brady re-signed with the patriots for $1B per year – just has Elon Musk has figured out ways of shooting lser beams out of your eyes using monkeys. You then see it is sponsored by Pfizer, and you go about your daily life knowing you are safe with your pension, 401k, and safe job in the tech sector where you own $900k on a studio in San Francisco.

The main issue here is that there’s really on a small number of people participating in the markets that understand even a fraction of the above. This allows the clown car of a train to continue forward – accordion and all. But as each day or week is going on, you will get a car off the tracks. The conductor will stand up, tell you all is well, “we have it covered” and tell you to go about your daily lives. And, most will do. Those of us that SEE the problems above HOPE there are people smart enough in positions of power to fix this. However, our faith in this getting fixed lessens every day.

My primary investment is real estate rentals. It’s only 3 units on two properties (one property has 2 separate dwellings). I believe, someday, the equity in these will be deflated. I want to potentially utilize some of this equity while I can. I have HEDGED this equity loss with a DEFENSIVE posture in everything precious metals, and recent shorts of the housing markets. IF I lose on my defensive bets, my housing should appreciate far more than the paper losses on my PM bets (this has happened). If I lose on my long bets with the houses, I will reap many multiples of those losses with the PM bets. Meaning – either direction this goes, I grow my pile more than the year before. While I have a strategy to PRESERVE my wealth with PMs, I have leveraged bets with miners that can do many, many multiples if we get into a severe risk off scenario.

Meaning – I HOPE everything above is wrong. Everything. It means I will make a fortune on my rentals in the next 30 years with appreciating rent prices and have stronger cash flows. But my defensive hedges are put there for a reason. There is a high likelihood that the evidence above points to bad things coming. Using the train car analysis, most just look out the window and see the train moving forward, blissfully unaware of when their train car is to derail. My point of writing this is that many should consider risk off hedges such as PMs and then leverage to that with miners. This is an insurance play. Most right now just see the 300mph and are betting each and every day that this 300mph train will continue on forever.

What. If. I’m. Right.

What is your defensive hedge?