2020 Sucked, 2021 Is Gonna Blow

Assuming the U.S. Dollar Index has entered a bear market, green regulations spread and deepen, governments increase stimulus and an full exit from the pandemic occurs, 2021 could be the year inflation returns. It will hit precious metals and industrial commodities first.

The U.S. Dollar Index has likely entered a bear market. The prior two bear markets saw 7 to 8 near-consecutive quarterly declines (the rebounds were small bumps on the road lower). A reversal to 96 is a correction, above and we're probably discussing widespread financial panic. The last stop for a rebound is the 88.50 area. If a bear market, the DXY should be sub-80 by year-end. Fundamentally, all the conditions for a relative dollar rally against foreign fiat are still in place, but it's a question of whether those fundamentals have been overwhelmed by animal spirits. Coming into 2021, the indication is yes.

The major indexes enter the year with a potential bearish setup. One must consider them through the lens of technology-sector distortion. Tne Nasdaq 100 has no upside resistance haven broken free. The DJOA and R2K both look like they're running into resistance, as would be the S&P 500 if it didn't have such a large technology weight.
The precious metals all have bullish setups except for palladium. It looks like it could be headed for another test of the top, but even if not, returns will likely be higher in other metals.
If a bullish resolution in 2021, copper should exceed $4 by year-end, and possibly as soon as May or June. It has a long way to go before hitting support at $3.00, a move below $2.90 would raise the threat of this year being a false breakout.
If gold will run, BTC Bitcoin looks like it will extend its run versus gold.
Silver junior miners could be the first movers if 2021 is gonna blow.


China Collusion Meme Heats Up

The incoming Biden administration is bought and paid for by the CCP, as are most major media outlets. I thought the China colluion meme would be fueled by some murky ties between the CCP and anti-American/globalist policies of the ruling class, but it's turning into a literal case of collusion or "useful idiocy" on the part of major players in the American media-politico complex.

ZH: All Major Western Media Outlets Take "Private Dinners", "Sponsored Trips" From Chinese Communist Propaganda Front

CUSEF is a Chinese Communist Party-funded initiative founded by Tung Chee Hwa. The group also targets American universities with offers to fund policy research, high-level dialogues, and exchange programs.

Tung also serves as Vice-Chairman of the Chinese People’s Political Consultative Conference (CPPCC), identified by the U.S.-China Security and Economic Review Commission as a key component of the Chinese Communist Party’s United Work Front.

The effort, according to the U.S. government report, aims to “to co-opt and neutralize sources of potential opposition to the policies and authority of its ruling Chinese Communist Party.”

“The United Front strategy uses a range of methods to influence overseas Chinese communities, foreign governments, and other actors to take actions or adopt positions supportive of Beijing’s preferred policies,” it continues.

A host of corporate media outlets including CNN, The New York Times, The Washington Post, and MSNBC have participated in private dinners and sponsored trips with the China-United States Exchange Foundation, a Chinese Communist Party-funded group seeking to garner “favorable coverage” and “disseminate positive messages” regarding China, The National Pulse can reveal.

Other outlets involved in the propaganda operation include Forbes, the Financial Times, Newsweek, Bloomberg, Reuters, ABC News, the Economist, the Wall Street Journal, AFP, TIME magazine, LA Times, The Hill, BBC, and The Atlantic.

Russiagate will go down in history as an all-time backfire. There's nothing any of these outlets can say, with perhaps one exception, after unironically running Russiagate for 4 years. The template for treason was set and all of these media outlets, the journalists working for them and the corporate owners behind them are suspects.


Sign of the Top: Roaring 20s Meme Continues

When the market plunged in March, I expected a big rally. Not as large as the one that happened admittedly. I thought the market would fail near, but before new all-time highs. A big rebound seemed likely though because people have psychological rebounds from terror. The panic in March was as bad as it gets and it was society-wide. During the financial crisis, you could switch away from financial news and avoid negative news. You could go to the movies! This year, people were locked in their homes. The virus (the response to it) was an omnipresent force. At the start, people feared becoming deathly ill. The euphoria that followed was a natural reaction.

I see a similarity in the roaring 20s memes. Some economists and investors expect a recovery boom. First, this is peak mood behavior. If it happens, it will likely be a blow-off top. Second, calling for this is itself a sign of peak positive mood. In context, it's still a reaction to the negative trends all around. There's also some relief at the exit of Trump. The media are emotionally unstable and terrorized the world for 4 years under Trump. They are elated he is gone and htat shows up in media spreading the roaring 20s meme.

It's possible an inflationary crack-up boom fueled by monetary debasement and carbon neutral policies will create an economic "boom." It will end up being very costly, possibly even very negative impact on real growth, but over the next few years, we can make fortunes in mining. Absent that, comparisons to the 1920s are off base. The influenza back then killed far more people. It killed younger people, shrinking the workforce. The end of the war was recessionary as production shifted back to domestic demand and soldiers returned. The depression at the start of the decade was unimpeded by government support. Debt was wiped out. Balance sheets were clean. In contrast, the world will enter 2021 having solved exactly zero of the problems that trapped the economy from 2008 to 2020.

DailyStar: Roaring 2020s will be post-Covid vaccine 'sex-fest' and 'era of vice and indulgence'

The rest of the 2020s will be filled with "sexual licentiousness" after people across the world emerge from the lockdowns enforced by the coronavirus pandemic, an expert has predicted.

This exciting prediction has been made by Yale professor Dr Nicholas Christakis in his new book, "Apollo’s Arrow: The Profound and Enduring Impact of Coronavirus on the Way We Live."

Social epidemiologist Dr Christakis says society will make up for lost time as soon as it’s safe to.

"During epidemics, you get increases in religiosity, people become more abstentious, they save money, they get risk-averse and we’re seeing all of that now, just as we have for hundreds of years during epidemics," Christakis told the Guardian.

I'm not concerned with the content of the prediction. There's some truth to what's being said here, but at a higher level, the fact that the media is running these stories is a sign people are already in a good mood. They aren't sending around as many stories of doom and gloom. The media is as susceptible to social mood as the general public. Media is a reflection of social mood more than a driver of it.

It's possible some positive black swans are out there. A breakthrough in nuclear fusion could create cheap power. Absent that, the comparison for the 1920s is more like Weimar Germany. A socialist destruction of the economy and wider society that will inititally be celebrated because it will be inflationary. Or, if the roaring 20s meme is totally wrong, the appropriate analogy is 1931. Many believed the depression was over in 1931, but the darkest days were ahead.


China Shuts Down Pearl River Delta Electricity Grid for "Wartime" Conditions

Long story short: China cut its energy supply (Australian coal imports) and then was hit by surging demand as temperatures plunged in Southern provices. Result: widespread blackouts in the heart of China's economy. Water and cellular communications were knocked out as well. Apple Daily: 廣東大停電|廣深珠等多市無預兆停水停電斷網 醫院受影響 廣州供電局:電網故障
The authorities announced earlier that electricity consumption will enter a "wartime state", and provinces have successively limited electricity.
The "wartime conditions" are the result of a self-imposed naval blockade of Australian coal imports.

MacroBusiness: Angry China blacks itself out with Aussie trade war

China is suffering mass power cuts in the south, prompting cities to dim street lights, suspend factory production and tell office blocks to turn off heating unless the temperature falls below 3C. The electricity crisis appears to have been prompted by a shortage of coal after Beijing banned imports from Australia. China imposed trade bans against Australia after Canberra demanded an inquiry into the origins of coronavirus and criticised Beijing’s treatment of the people of Hong Kong. …China has insisted it is trying to reduce its dependence on coal. However, the combined effect of a surge in demand for electricity prompted by a colder than usual winter and the economic rebound following lockdown suggests that the country may not be able to wean itself off Australian coal so rapidly.
This is like what California is doing over 10 years, but all happening in a couple of months.


Don't Ruin All The Beautiful Gold Mining Charts

Sign of a top.
Jeffrey Snider has been doing the yeoman's work of pointing out the lack of inflation.

Alhambra: Talk About Putting All Your 蛋 In One 篮

Consumer prices, in broad terms, fell 0.5% year-over-year. Food prices are responsible for some of the deflation, with the pork problems being mediated, but in other sectors there’s as much negative pressures. Non-food prices in China’s CPI were down (0.1%) year-over-year last month, too.

Demand internally cannot be anything other than still seriously weakened.

Producer prices likewise continue to fall, indicating the same but including the external economy. The Chinese PPI dropped by 1.5%, with factory gate prices declining 1.6% compared to the year before. While those represent a modest improvement from discounted pricing over the months before, it’s really not all that much nor anywhere quick enough to suggest overcapacity isn’t still a dominant factor.

Inflation is highly psychological, but there's no sign of it yet. There's a very big shock reaction to the panic of March 2020, a panic that went beyond financial markets. It's assumed the psychological lift will keep going, but maybe this was all a bear market rally. To new highs sure, but that's an artifact of the amount of stimulus. The assumption going forward is more stimulus and recovery leads to inflaiton. It might. The odds of it happening next year are good because Biden will pass his big budget. However, it's also possible there's no recovery and a huge stimulus is needed to keep the economy stable. M2 money velocity is plunging towards 1.0, below that level it indicates Fed policy is rapidly losing effectiveness.

I still have all my mining shares, many great setups on charts, breakouts imminent or underway in some silver miners. Yet a nagging sense that everyone has assumed that which may never arrive.


Politburo Removes Language About Housing Speculation

China's housing speculators see a red light turned off. The statement from the meeting of the Central Committee yesterday removed the saying, "housing is for living, not speculation" The article covering this news stresses that this doesn't mean real estate regulation is loosened, but removal of the language is an obvious step in that direction. iFeng: 政治局会议13个字定调楼市未提“房住不炒”,专家快速解读
On December 11, the Political Bureau of the CPC Central Committee held a meeting to analyze and study the economic work in 2021. Among them, the content for real estate is "promoting the steady and healthy development of the real estate market." It is worth noting that the content of this meeting is different from that in April and July 2020, and the "housing is for living, not speculating" is not mentioned. However, the industry generally believes that although "housing is not speculation" is not mentioned, the real estate market will still be in a stable operation range.

"Although it has not emphasized the need to'housing to live without speculation', the expression'promoting the stable and healthy development of the real estate market' remains unchanged. It is expected that the national sales area of newly built commercial residential buildings will remain stable and sales will maintain a certain growth in 2020. In 2021, the real estate market will continue to maintain its current strength, promote market stability, and take active measures to ensure the stable and healthy development of the real estate market in cities and regions that have overheated,” said Pan Hao, a senior analyst at Shell Research Institute.

Wang Jingwen, head of the Macro Research Center of the Minsheng Bank Research Institute, also publicly stated that the communiqué of the Politburo meeting has a feeling of cherishing ink as gold, and the expressions of various economic tasks are very few and not fully developed. Prior to this, the central government has repeatedly emphasized the positioning of "housing and not speculating". It is expected that in the follow-up Central Economic Work Conference, "housing and housing should not be speculated" will be reiterated. Under the new dual-cycle pattern, real estate regulation will certainly not relax.


Spot of Sterling

Interesting news item that I missed during the relatively hectic Thanksgiving week: GoldSpot purchased shares in Sterling Metals (formerly Latin American Minerals). GoldSpot is a large position of mine and I own a speculative position in SAG as well.

Spot looks solid above 40 cents, but the chart resembles gold. Considerable weakness exists if gold breaks $1800. Goldspot could also see a substanial pullback. Sterling has substantial support around 21 cents and 50 cents is the resistance before a breakout.


China Raises Insurance Limit on Equity Ownership

China thinking about pumping the A-share market again? Need some place for renminbi to go with the rising exchange rate making foreign assets attractively priced again... iFeng: 超重磅!刚刚,国常会发话,万亿险资入市要加速?
According to news from China Government Network on December 9, Premier Li Keqiang of the State Council hosted an executive meeting of the State Council on the same day to deploy measures to promote the expansion and quality of life insurance to meet the diverse needs of the people; the Regulations on the Supervision and Administration of the Use of Medical Security Funds (Draft) )" and "Regulations on Pollution Discharge Permit Management (Draft)".

These contents are related to A shares. The meeting pointed out that the long-term investment capacity of insurance funds should be improved, prevent the speculative use of insurance funds, strengthen asset and liability management, and strengthen risk prevention and control.

Set up a differentiated supervision ratio for insurance funds investment equity assets, up to 45% of the company's total assets, encourage insurance funds to participate in major projects such as infrastructure and new urbanization, and better play the role of supporting the real economy.

iFeng: 人民币汇率升破6.50关口!狂涨7000点,换10万美元省7万元

Li Liuyang, chief foreign exchange analyst of China Merchants Bank's Financial Market Department, believes that from a technical point of view, 6.50 is the next support. In the short term, the rapid appreciation of the renminbi has basically come to an end, and the probability of a correction or horizontal consolidation after that is not low.

What is the impact on A shares?

Generally speaking, the rise in the RMB exchange rate is good for the A-share market, but as of the close on the 9th, the Shanghai Index fell 1.12% to 3371.96 points, the Shenzhen Component Index fell 1.84%, the ChiNext Index fell 1.76%, and the total turnover of the two markets was 791.5 billion yuan. The net purchase was 3.89 billion yuan.

ZH: Chart Of The Week: China Credit Impulse

China's credit impulse says the commodities trades have farther to run. But is this time different or will the rug be pulled in 2021?

Credit growth is elevated in China, but the year-on-year growth is front-loaded. It remains to be seen whether China will pour gasoline on the fire in 2021 or slam on the breaks as they did three times over the past decade.

Socionomics Alert: Major League Baseball Contracts Farm System Again

Major League Baseball cut its farm system by 25 percent today, from 160 down to 120 teams as planned. This was announced in 2019. There were closer to 260 farm teams only a few years ago. Baseball is considered a positive-mood sport. Along with horror movie popularity, transgenderism, political violence and polarization, falling life expectancy, rising nationalism and other social measures it reinforces my argument that perhaps the only "sign" of positive mood is the artificially manipulated stock market.

MLB: Tracking new Minor League affiliates for '21


First Pours 2021

I'm compiling a list of first pour companies for 2021. These are miners that will make their maider pour or who will be substantially increasing their production with a new mine. One that is on sale right now is Thor, THX in Canada. There are no OTCBB shares. They are aiming for a Q2 2021 first pour, but I think it is a buy right here because they have assays incoming and the price is discounted. I don't think this will get back to 12 cents, but that is the downside risk. I would be a strong buyer at that level. On the upside, above 25 cents is where the breakout begins.
Another first pour I already own is Emerald Resources, EMR. Nice base on the chart. Aiming for a Q2 pour as well. The mine is located in Cambodia.

Largo Launches Vanadium Battery Company, Standard Uranium Hits

I have no comment on the news having only just seen it. It is good timing chartwise if the market likes it because Largo is on the verge of a technical breakout.
Standard Uranium I mentioned before. It sank with no results, but the uranium rally last week didn't leave it untouched. Now a good drill result lifted shares. It's still below my total cost basis.
At the moment, Mega Uranium, UEX and CCJ have better setups.


Auteco Filled Gap

Extreme Outcomes Increasingly Likely in Financial Markets

Call option volume. If you look closely, the prior peak was in January 2018. Volmageddon was unleashed in February 2018. The call volume didn't directly cause that blow up, but options are priced in part based on supply and demand. A world in which this makes sense is as volatile as a world where it doesn't. The difference is if this makes sense, then a major trend towards inflation could be underway, and it could last months or years. If this is not sustainable, a market crash or extreme correction that will qualify as a technical bear market (down 20 percent or more) could be weeks to a couple of months away, and that drop will happen in days.
Great setups in all manner of natural resource sectors from gold to copper and uranium to oil exist, but I suspect most of this call volume is related to technology and not LEAPs on resource stocks.


Election Fraud Update aka The Media Fracture

Time is ticking on any action related to election fraud. It is also ticking on the legitimacy of a Biden presidency. The narrative of a stolen election exceeds the Russiagate narrative that went on for 4 years. It won't be as loud as Russiagate, but it will be more devastating if half the country believes there is legitimate evidence of fraud. This isn't a fake FISA warrant cooked up by the CIA and FBI, it is Americans with math PhDs in some cases showing there are statistical anomalies worth investigating. I'm not sure if the media can handle the statistical arguments being made. All bias aside, major media is aimed at the mass market. They need stories like fake ballots stuffed in machines. They aren't good at explaining what an algorithm is, let alone how it works. There's no panic about fraud memes because it probably won't stop Biden from taking office, but there is a rapidly closing window on killing the election fraud meme.

Election fraud is the topic that can propel America into two distict media cultures. Right now I'd wager a distinct right media sphere will emerge next year, with Trump being the "tipping point" that puts it over the top. People following mainstream media have no idea what is going on with election fraud. Meanwhile, if you are interested, you have to subscribe to the YouTube channel of Right Side Broadcasting Network, althoguh I suspect they will be banned from YouTube sometime next year. Or you need to be following the right Twitter accounts and blogs, many of them are already being suspended or banned. (If you are right-of-center, or left-of-center and prone to disagreeing with the establshment on topics such as war and trade, you should already have backup plans for social media.) Most right-wingers still turn on NBC News or flip on CNN, or even watch Fox News. Next year, I think the competing right-wing networks will finally achieve signal dominance.

Fox News does not have signal dominance. Even Tucker Carlson's program, the most right-wing opinion show on major networks, spends a large amount of time discussing topics driven by mainstream media narratives. There were news items such as Hunter Biden's laptop that people watching mainstream news didn't know about, but most Fox News viewers discuss the same issues as MSNBC viewers. The American media environment is like a giant, wilder episode of Crossfire. Next year, right-wing media will be sustain its own narratives. It's very possible President Trump could be kicked off Twitter. I suspect Facebook will hold out longer because it has more Boomer users. Should he leave Twitter, he would take at least 20 million people with him. If there was a split with Facebook, it's possible 50 million users could go. My sense is the tech and infrastructure exists, but a rapid shift in media consumption habits is difficult, paricularly with older people who lean Trump. Cord cutting is slowest, social media adoption, etc.

Where do things stand with election fraud? Aside from all the state election hearings that were broadcast live by RSBN from November 25 through last week, which produced many claims of mistakes or fraud, people have been busy running statistical models on the election and testing Domninion voting machines.

Smoking Gun, Part 2: Ratio Transfers Proved; Entire Algorithm Reversed, net 200,353 votes for Biden

That the final hijacked state of all precincts can have their total votes changed to a uniform number, such as 20,000 total votes per precinct, and the percentage remains the same (14.65%), which is proof that a simple linear algebra algorithm was adjusting requisite precinct totals against a flat polarized template.

The precincts seized more than once were most likely to be early in alphanumeric order, proving the software takes the first available precinct from an ordered alphanumeric list by County, Precinct.

There is much more at the link, plus videos. A layman's explanation is in this 40min video.
Another mathematician has explained part of the video more clearly.
I haven't digested any of this yet because I don't have the time to keep up with it. Where do I go for a distilled opinion? On the other side of the aisle, how many people who are happy the election is over and Trump is gone, will spend any time analyzing what PhD-level mathematicians are reporting? I'm not fully inside the right-wing media bubble, but can you see how people with limited time for news media consumption could be sucked into these topics? Evening news programs would need to spend 10 to 15 minutes covering only one slice of this issue. Even if you don't believe any of it in the slightest, understand that millions of people are consuming this media. What they perceive as the otehr side's response is dismissal at best or censorship at worst.

Back in 2018 I posted, Russia Collusion Narrative Dead, Long Live Chinese Collusion! We will find out very soon if I was correct in saying it would be bipartisan. If not, right-wing media will have another topic that it can devote years of programming to because it's such as deep well.

Here's a video clip from China that's going around on social media. It might make it mainstream by tomorrow, but probably later in the week. There's nothing in this video that surprises me, but it is really good propaganda for Trump voters and sympathizers (people who might personally dislike Trump, voted against him for various reasons, but support the main thrust of his rheorical policy package). Di Dongsheng of Renmin University explains how China was able to solve diplomatic issues very quickly from Clinton to Obama, but had trouble with Trump. Mainly, he says it is because Wall Street did not have control over Trump. What is notable is this speech can be found online in China, you can see it here: 翟东升对话各路大佬:中国金融开放带来哪些风险和机遇?, but the part where he gives some details about the Wall Street executive in his anecdote is scrubbed. Jump to 46 minutes and you'll see it skips over that part. I only mention that because it makes the larger point far more credible, that CCP censors removed descriptive information about this person.

The charge he makes is different that with Russiagate, but it is far more substantial. There are Americans high up in the government and in business who put Chinese interests ahead of American interests and they are back in control with Biden. Chinese political experts are openly talking about it. This is akin to Putin going on television in Russia in 2016 and openly saying he did an election deal with Trump. It's different because this is true, whereas Russiagate was fake. It's different because Russiagate was a far more acutely serious charge, whereas this is a broad statement about generalized corruption in America. Still, it confirms the narrative. China collusion is going to be a huge story and at the very least, any time U.S. workers or companies lose out to China, it will be assumed the intentional choice of America's ruling class.

To end on a lighter note, here's 4chan laying out the timeline of Trump's recent activities in the context of overturning election results by whatever means are necessary.
Update: I saw this article that makes similar points about the media failure post-election. Why do people think the election was rigged
But we do not live in a free, open, and civilized place. Our press is violently biased and all our media of communication are oppressively censored by a well-coordinated and censorious cabal of progressive blackguards. So this election was always going to invite unprecedented skepticism whatever the result. The only antidote to that would have been unimpeachable transparency in the process, which we did not have. The perpetrators of this obfuscation have to live with the consequences of apparent impropriety whatever the ultimate result of this sad affair.

FRANKLY what is the evidence for the baseless claim that this was a free, fair, and secure election?


Through the Ratios: $10,000 Platinum

The platinum-silver ratio has been declining for two decades. If platinum-silver can get back to resistance, that implies $6,000 platinum at $100 silver. If platinum-silver heads back towards it's old peak above 150, then $10,000 is not a wild forecast. However,
Platinum tripled off its base in the 2000s. A tripling off a new base (exceeding the old all-time high) would take platinum to $7,000 per ounce.


Do or Die Time for US Dollar

USDKRW is not a prediction, but a potential risk for the markets if the U.S. dollar reverses. However, the dollar will have to do more than bounce here if it is to catch global investors off guard.
The euro broke long-term resistance. At this point, I respect the euro break and assume all of the charts above will breakdown. If the dollar will reverse it will be imminent though, because continuation will result in breakdowns all over and follow through on these charts.
For myself, I will benefit greatly from a U.S. dollar breakdown given positions in various mining and resource shares. I'm more interested in a potential dollar reversal because global investors have already priced a dollar bear market into most assets. Gold might be an interesting outlier because it has been moving with USD in the past month, but as in March, might be caught during a volatile plunge should the dollar shock markets.