The Market 2021

[Folster]

I think the next 5 years are going to be explosive in the EV space and TSLA will grow exponentially on top of it's other products and I view them as a tech company who just happens to be the leader in EV. All faith. I'm already very much invested in tsla so buying dips only makes sense when the company is growing at the rate it is. By August, it is expected to see a 7500 ev credit on all American ev, the semi and cyber truck or in route, the model 2 is being planned with an even lower price and more. I'm pumped.

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I'd rather bet on the materials sector. Those involved in mining and producing copper, lithium, steel, and other materials will excel even if TSLA doesn't realize its potential. There are a lot of smart auto manufacturers that aren't rolling over for TSLA.

 

[dscher]

I think index holders will be fine as Energy, Financials, and Materials continue to outpace the high flying growth. That's the beauty of indexing.

I hear ya....and I'm absolutely not knocking the approach of indexing. But, the reality is that tech and economically sensitive sectors are highly weighted in the major index's. Material and energy won't have much affect on overall performance because of their minor weighing..jmo

 

[Folster]

The fed is still pumping $120 billion into the bond markets monthly. They're buying $80 billion worth of treasuries and $40 billion worth of agency and mortgage backed securities.

 

[dscher]

The fed is still pumping $120 billion into the bond markets monthly. They're buying $80 billion worth of treasuries and $40 billion worth of agency and mortgage backed securities.

And they never have a good answer to any hard line questions...ie. if the economy is recovering so well why are you still printing? Or, do you really believe inflation will be 'transitory' with the gas pedal to the floor like you continue to do? That's why the media just feeds em their powder puff questions and they move on with their day. This is the real war on people. The inevitable massive wealth transfer that is taking place. This will kill more people than the virus and recent wars put together imo.

 

[Folster]

And they never have a good answer to any hard line questions...ie. if the economy is recovering so well why are you still printing? Or, do you really believe inflation will be 'transitory' with the gas pedal to the floor like you continue to do? That's why the media just feeds em their powder puff questions and they move on with their day. This is the real war on people. The inevitable massive wealth transfer that is taking place. This will kill more people than the virus and recent wars put together imo.

For all the talk about progressive tax rates and taxing the rich, inflation is the most regressive tax there is. People without assets will be hit the hardest.

 

[BigRedRage]

The fed is still pumping $120 billion into the bond markets monthly. They're buying $80 billion worth of treasuries and $40 billion worth of agency and mortgage backed securities.

Explain this to me like I am 5

 

[dscher]

Explain this to me like I am 5

Treasury prints more funny money. Fed buys them in the form of Treasury bonds. They own more of our debt, just like any other creditor nation, like China. They are also buying high risk bonds in mbs. This is all for keeping the party going imo...and times running out. Imagine if they even give a whiff of the word 'taper'. Oh boy. At the end of the day, We are increasingly becoming more and more the feds b____..

 

[Folster]

Explain this to me like I am 5

When the fed buys bonds, they are increasing the money supply (dollars in circulation. This is considered inflationary and stimulating. They hold the bonds on their balance sheet. If they want to decrease money supply, they sell the bonds and then hold the cash on their balance sheet.

In order for the for the government's spending to exceed revenue received, the Treasury will issue bonds. The Fed, foreign governments, corporations, and private investors buy these bonds that allow for the government's deficit spending.

One thing I don't understand is how does the fed get money. They supposedly get interest off the bonds they have, but there has to be a limit at some point.

It all seems very circular to me. Government overspends, treasury sells bonds, and then the fed buys the bonds. At some point that will fail.

 

[dscher]

One thing I don't understand is how does the fed get money. They supposedly get interest off the bonds they have, but there has to be a limit at some point.

Yep. It's a strange phenomenon that confuses alot of people that I follow and the work they do. I personally think it's just a fine line that doesn't really exist imo...(after all, we do have a woman that worked as the fed chair now as the treasury secretary and her boy is heading up as the fed chair right now...which I find highly comical.) It's all numbers on a screen and they might say they are printing this money and putting it into circulation. But, because of the digitized nature of everything I think the fed could easily do the 'printing' as well. Money created from nothing. That, after all, is all any fiat currency can be. Debt. Silly funny money.

 

[BigRedRage]

The concept of what fiat has become is so wild to me. It's really what has spurred my interest in crypto. You have the bitcoins who only become more finite over time and the Doges that continually inflate at a specific pace no matter what instead of a government just saying we promise people will take this money but we will print so much that your money because more useless every day. I commonly thing of Venezuela and how they weigh money now instead of counting it because it has become so worthless.

I've seen comments about how crypto is based on nothing, which it is but I think the majority of people have no idea that our fiat money is based on nothing too.

 

[dscher]

The concept of what fiat has become is so wild to me. It's really what has spurred my interest in crypto. You have the bitcoins who only become more finite over time and the Doges that continually inflate at a specific pace no matter what instead of a government just saying we promise people will take this money but we will print so much that your money because more useless every day. I commonly thing of Venezuela and how they weigh money now instead of counting it because it has become so worthless.

I've seen comments about how crypto is based on nothing, which it is but I think the majority of people have no idea that our fiat money is based on nothing too.

It's crazy how many times you can say it to yourself as well...that ALL fiat eventually goes to zero! It's still hard to understand and truly wrap your head around that concept. It's why gold is so important. It's been the only true hedge against a collapsing debt note.

 

[Folster]

I moved 20% of my mid term savings into gold. 20% gold, 25% stocks, and 55% ultra short term bonds. This is relatively a small amount of my investable assets so I am no gold bug to be clear. I just want a little hedge on my short and mid term savings.

My retirement and long term investment accounts have no gold and are 100% stocks.

 

[BigRedRage]

It's crazy how many times you can say it to yourself as well...that ALL fiat eventually goes to zero! It's still hard to understand and truly wrap your head around that concept. It's why gold is so important. It's been the only true hedge against a collapsing debt note.

even then, gold is only as valuable as we decide it to be.

 

[Folster]

even then, gold is only as valuable as we decide it to be.

The fed holds some gold.

 

[BigRedRage]

I moved 20% of my mid term savings into gold. 20% gold, 25% stocks, and 55% ultra short term bonds. This is relatively a small amount of my investable assets so I am no gold bug to be clear. I just want a little hedge on my short and mid term savings.

My retirement and long term investment accounts have no gold and are 100% stocks.

I'm pretty unsophisticated still. I have a 401k of course, outside of that, I have a "life savings" and a 3-4 month liquid fund always in the bank.

Outside of that, my life savings is all invested in either stocks or crypto. It was about a 70/30 split but the crypto boomed really fast and made it almost 50/50.

My original intention was to take my life savings out of high yield accounts and instead invest to stay ahead of inflation. The intention was just to make sure it doesnt shrink while I wait around for the housing market to dip so I can either
A) buy property locally (large parcel) and have enough land for the kids to be able to build homes on and save money for them in the future (modular home is 100k vs a house is 400k)
B) buy land and property up north to have as a second home.

However, once I started investing and seeing how much it can grow, I now realize that if I take the money out, granted I would have property, but now I am starting over. 10% annually on a dollar is far different than 10% annually on $100. So, at this point, I almost want to just live off of my salary, stop making large cash purchases (I thought about putting a huge chunk down on my cybertruck but now dont think I will and just make payments) and just let the life savings be a very long term growth and retirement account instead of a real estate savings.

The original goal was to soak up property in all ways I can and play the long game but at this point I feel like investing is a more profitable and less headache venture.

 

[dscher]

even then, gold is only as valuable as we decide it to be.

Agreed. It is free to the open market. Can it temporarily be suppressed through market manipulation? Absolutely. I think we have been seeing the banks and fed slowly accumulating the past few years...This is why I believe premiums are skyrocketing along with gold and silver being on backorder/delayed shipments for a lot of precious metals dealers. The big boys are buying while the retail guys are still on the sidelines. The demand is absolutely there...supply isn't. You just don't hear CNBC talking about it. Shocker.

 

[dscher]

I'm pretty unsophisticated still. I have a 401k of course, outside of that, I have a "life savings" and a 3-4 month liquid fund always in the bank.

Outside of that, my life savings is all invested in either stocks or crypto. It was about a 70/30 split but the crypto boomed really fast and made it almost 50/50.

My original intention was to take my life savings out of high yield accounts and instead invest to stay ahead of inflation. The intention was just to make sure it doesnt shrink while I wait around for the housing market to dip so I can either
A) buy property locally (large parcel) and have enough land for the kids to be able to build homes on and save money for them in the future (modular home is 100k vs a house is 400k)
B) buy land and property up north to have as a second home.

However, once I started investing and seeing how much it can grow, I now realize that if I take the money out, granted I would have property, but now I am starting over. 10% annually on a dollar is far different than 10% annually on $100. So, at this point, I almost want to just live off of my salary, stop making large cash purchases (I thought about putting a huge chunk down on my cybertruck but now dont think I will and just make payments) and just let the life savings be a very long term growth and retirement account instead of a real estate savings.

The original goal was to soak up property in all ways I can and play the long game but at this point I feel like investing is a more profitable and less headache venture.

Patience is key imo. If you are willing to wait.. things will go on sale at some point in a BIG way and youll be swimming in a sea of potential assets that you can accumulate. As buffett says.. you'll be able to get those socks on sale.

 

[elindholm]

I've seen comments about how crypto is based on nothing, which it is but I think the majority of people have no idea that our fiat money is based on nothing too.

It's not based on nothing. It's based on wide-spread agreement that it's worth something. That's what money is. It's an arbitrarily defined commodity that has value through a social compact.

Fiat currencies are backed by governments, who are backed (generally) by the people who elect and/or submit to the government. That's why the U.S. Dollar is still the #1 currency in the world: It's backed by the world's most powerful government and represents a fraction of the world's most powerful economy. "This note is legal tender for all debts, public and private." Says it right there on the currency.

If you try to buy a loaf of bread and the guy behind the counter won't take your cash, theoretically you could appeal to his legal requirement to accept it. We get stories like this from time to time, like when some smart-ass decides to pay his utility bill with a wheelbarrow full of pennies.

No one is ever going to compel another party to accept cryptocurrency. If the seller says "Sorry, I don't take crypto," that's the end of it. Advocates of crypto claim that that's a strength, but it's not. It's a weakness, and a potentially crippling one. If the critical mass of people willing to recognize crypto as "money" falls below a certain point, there's no reliable market for it anymore, and it becomes worthless. The only way that's going to happen with the USD is if our government loses all credibility worldwide and/or dissolves -- and if that happens, we'll have much bigger problems on our hands. The dollar is too big to fail. Bitcoin isn't and, by its own construction, can't be.

 

[dscher]

https://www.cnbc.com/2021/05/11/sta...gering-the-dollars-global-reserve-status.html

Things like could easily assure a dollar collapse.

 

[BigRedRage]

It's not based on nothing. It's based on wide-spread agreement that it's worth something. That's what money is. It's an arbitrarily defined commodity that has value through a social compact.

Fiat currencies are backed by governments, who are backed (generally) by the people who elect and/or submit to the government. That's why the U.S. Dollar is still the #1 currency in the world: It's backed by the world's most powerful government and represents a fraction of the world's most powerful economy. "This note is legal tender for all debts, public and private." Says it right there on the currency.

If you try to buy a loaf of bread and the guy behind the counter won't take your cash, theoretically you could appeal to his legal requirement to accept it. We get stories like this from time to time, like when some smart-ass decides to pay his utility bill with a wheelbarrow full of pennies.

No one is ever going to compel another party to accept cryptocurrency. If the seller says "Sorry, I don't take crypto," that's the end of it. Advocates of crypto claim that that's a strength, but it's not. It's a weakness, and a potentially crippling one. If the critical mass of people willing to recognize crypto as "money" falls below a certain point, there's no reliable market for it anymore, and it becomes worthless. The only way that's going to happen with the USD is if our government loses all credibility worldwide and/or dissolves -- and if that happens, we'll have much bigger problems on our hand. The dollar is too big to fail. Bitcoin isn't and, by its own construction, can't be.

I'm simply hedged in Crypto due to potential, I'm not banking everything on it. In fact, I fully expect that over time, I will just sell the crypto for Fiat currency anyway. I still love the concept of it. Gold is also based on a wide spread agreement that it is worth something and so on. It's all relatively similar in my eyes. The government guarantee is why I am only 30% invested in crypto. I am there for the money and the hedge, not the presumption that it is guaranteed.

 

[dscher]

It's not based on nothing. It's based on wide-spread agreement that it's worth something. That's what money is. It's an arbitrarily defined commodity that has value through a social compact.

Agreed. The Petro dollar will remain the strong driving force, until crude oil and the direction of price decides it's not. Imo

 

[dscher]

I blame Elon.

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[BigRedRage]

I blame Elon.

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That chart is too short term

 

[BigRedRage]

I blame Elon.

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That chart is too short term

 

[BigRedRage]

we'll see what the future holds

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