Summer has come to an end, and now I am back walking unaided, it’s time to get back to work. As things return to normal, let’s quickly summarize our current standing.
The “sell in May and go away” strategy played out in most markets, with the exception of the SP500 and NASDAQ. These two indices received a slight boost from the rollout of AI and some pumping from a few major investment funds.
Certainly, improved inflation figures and efforts by Central Banks contributed to a slightly rosier outlook. However, my bearish sentiment remains strong. I believe the rally has been nothing but a mirage, one that will vanish as soon as northern hemisphere temperature start to fall.
Commodity markets didn’t shine over the summer, which wasn’t surprising. The weight of Chinese issues, particularly in the real estate sector, along with the problem of rising youth unemployment, and declining consumption in the Western world. Demands monitoring.
The Biden Crime Syndicate still holds power, with the multiple indictments against Trump happening to safeguard Hunter from imprisonment and prevent Joe’s impeachment. Its sad, but the USA continues down the path of becoming a Banana Republic, albeit with some quality country music.
NATO’s involvement in the Ukraine conflict has escalated, with Western powers not actively pursuing peace but rather using the war to fuel the industrial-military complex. This war could spell the downfall of the Western world and possibly democracy. I really cannot see a successful outcome for Europe.
In the world of cryptocurrencies, despite BTC’s inability to breach the $32,000 level, the narratives remain bullish, at least in sentiment expressed on social media. From my perspective, the crypto industry has compromised its original purpose of challenging authority, which is disheartening.
While it’s understandable that a youthful and impressionable industry, largely influenced by Silicon Valley, might succumb to political pressures,
I had hoped for more resistance from industry leaders. Instead, they’ve remained on the sidelines, applauding as established institutions enter the field, even as government forces exploit vulnerabilities and develop Central Bank Digital Currencies (CBDCs). To me, this resembles the arrival of a Trojan horse more than a victory.
We often say that one swallow doesn’t make a summer. Similarly, one month of strength doesn’t constitute a bull market. Therefore, my concerns for the remainder of the year, and possibly beyond, persist.
The most pivotal event of the past week revolves around the BRICS summit in South Africa. This bloc’s influence is growing, and with representatives from over 60 countries attending the conference, heavily influenced by Putin, new members were announced to join at year-end. Saudi Arabia, UAE, Iran, Egypt, Ethiopia, and Argentina have all been embraced by the bloc. This development doesn’t bode well for Western nations or their currencies. Moreover, it’s been noted that more than half of Africa’s countries are inclined to join the BRICS, possibly expanding it to “BRICS+.” This raises concerns about future commodity supplies to the West.
I can foresee commodity markets awakening from their slumber in the coming months, triggered by supply shortages or a weakening dollar (likely both).
The dollar may weaken, but I don’t recommend seeking refuge in the Euro. Steering the massive ship that is the EU requires considerable effort, and change won’t occur until Eastern European members begin to revolt, a process that may take time.
In contrast, the USA is expected to shift its course next year, with a more pro-America Nationalist government, be it led by Trump, DeSantis, or Vivek. This change benefits America but also poses increased challenges for the EU and Europe.
The struggle we can expect to see from US politicians to retain the global importance of the dollar will hardly be repeated in Brussels and Strasbourg, where the agenda appears to be to steal freedoms and wealth from their impoverished citizens, rather than compete with other global powers for economic growth.
Does it truly matter if the Euro holds the second, third or fourth position? Although the Euro is significant, we all know its strength is somewhat illusory due to the shaky foundations of the EU’s fiscal structures.
This essentially serves as an update on my current perspective. Admittedly, not much has changed from my outlook over the past two years.
I’ve long emphasized hedging against overall risk, which is why I invested in Gold, various non-western currencies, and agricultural real estate. While not foolproof, these holdings provide a degree of protection. I also intend to add BTC to my portfolio, although I’ve yet to re-enter the market since selling at $30,000. Nonetheless, I plan to do so in the future.
There will likely be numerous short-term opportunities ahead, and I look forward to discussing them in the coming months.
Be careful out there, and be very wary of false prophets.
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