Low interest rates cause economic harm and are an indictor of a sick economy. Interest rates in the US continue to collapse toward those in Japan and Germany. Conventional wisdom states that low interest rates "support the economy." This is wrong and dangerous.
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| US interest rates are turning Japanese. |
August 2019 performance
The Chicken Little Portfolio gained 3.21% in August while the the Dow Jones Industrial Average lost 1.38%.
The Chicken Little Portfolio has returned over 10% year to date. Normally, this would be cause for celebration. However, this strong performance is primarily caused by the collapse in US interest rates. This is unequivocally bad, so I am filled with dread. The Depression lurks and it will have myriad unpleasant manifestations.
August was a turbulent month where the safe haven assets of gold and long-term Treasury bonds prospered. Other assets saw large ups and downs, while ending the month with modest losses. Bitcoin remains the winner so far in 2019.
The Chicken Little Portfolio has returned over 10% year to date. Normally, this would be cause for celebration. However, this strong performance is primarily caused by the collapse in US interest rates. This is unequivocally bad, so I am filled with dread. The Depression lurks and it will have myriad unpleasant manifestations.
August was a turbulent month where the safe haven assets of gold and long-term Treasury bonds prospered. Other assets saw large ups and downs, while ending the month with modest losses. Bitcoin remains the winner so far in 2019.
September 2019 portfolio positions
The Chicken Little Portfolio remains prepared for a deflationary depression. In August, the portfolio trimmed its 30-year treasury bond portfolio further, and retreated from the cryptocurrency position. The cash pile continues to grow awaiting opportunities to buy assets at Depression-level prices.
How much of a % drop in the stock market would you need to see prior to deploying your cash?
ReplyDeleteThank you for your questions. I might consider buying a huge dip, maybe dow 10,000 or so (just a guess).
DeleteEventually, I think stocks will decline by more than 90% and the long-term purchase will take place at Dow 1,000 amidst doom and gloom