The data is clear; Powell has even used the term “claiming victory,” and Wall Street is left to wonder whether the central bank of the United States is really of the opinion that inflation is no longer going to pose a threat to growth and stability in this cycle.
I don’t doubt that Powell wants to get the economy back on the right footing and that he wants to get the job done, but if the FED begins cutting in March, I personally think silver will skyrocket and I want to show you why.
At this point, I want to start going over some of the potential ways 2024 could shape up.
The first scenario is that, despite the clear path towards more cooperation between the two countries, China and the U.S. keep showing signs of aggression towards each other.
The Chinese economy doesn’t resume growth and the war in Russia remains a stalemate.
In an election year, Biden wants to show leadership; that means he can’t concede in Russia, the Middle East or China, but he can’t escalate the situation either.
Best for him if nothing significant happens, but I doubt that these fronts can remain at bay.
I expect 2024 to be a lot like 2016, a year of great uncertainty, but not of a recession.
My base assumption is that the U.S. economy won’t experience two quarters of GDP decline and give that script only a 5% chance, at most.
The hard landing is not probable, in my view.
The consensus for 2024 is as follows: Rate cuts will lead to higher stock prices.
I don’t see how that really becomes true, after the NASDAQ 100 just posted a 51% year and rose to an all-time high.
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I don’t foresee a market crash or anything of the like, but to bet on the general markets, at this point, is a bit optimistic.
Wall Street sees this massive pile of cash in money-market accounts and immediately assumes the retail public will exit the MMF when rates are cut.
I don’t see that being the case.
Therefore, the soft-landing scenario gets a 25% chance, in my book.
So, if a hard landing is 5% and a soft landing is 25%, what the hell has a 70% chance of occurring?
The answer is no landing.
When you learn how to pilot, the most important parts of training are landing and taking off.
Taking off is pretty straightforward and considered less dangerous than landing.
As a student, the instructor teaches the would-be pilot that if on his final approach, his speed and elevation don’t yield the intended result, which is a safe landing, then the right choice to make is to go around…
In that set up, the plane nears landing, but maybe because the runway is ending and the plane hasn’t landed (overshoot), or because the plane is too low and the runway hasn’t even started (undershoot), the pilot goes hard on the throttle and makes another attempt at it… from the get-go.
What I think will happen is that once the FED cuts, inflation will come back – that is my no-landing script and I give it a 70% chance of occurring.
FED cuts will spark a dollar sell-off, leaving the question of how high silver will go… the rest is details.
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