Weekend Show – How To Beat The Bear Market While Central Banks Continue To Hike Rates

June 18, 2022
Full Weekend Show


Fed week did not disappoint with the Fed hiking rates by 75 basis points which caused markets to fall further into bear market territory. Even the standout energy sector was hit by the end of the week. Safe haven asset like the dollar and gold are holding up but stocks, not matter what sector, are all getting hit.


On this Weekend’s show we feature Rick Bensignor and Mike Larson to focus on Fed policy moving forward and what to expect from the markets. While it’s a tough time for investors there are a couple sectors and stocks that can perform well in this environment. Plus there is a lot of talk about what a recession looks like for the US.


We hope you all enjoy this Weekend’s Show. Please keep in touch with Shad by emailing us at and




Exclusive Company Interviews This Week





Rick Bensignor
Mike Larson

    Jun 18, 2022 18:36 AM

    Thanks to all the KER guest contributors for another great week of daily editorials, company interviews with management, and another solid weekend show with Rick & Mike.

    Also thanks to all the listeners of the podcast and radio show, and those members of the KER crew that post and participate here on the blog, sharing insights with our community. Ever Upward!

    Jun 18, 2022 18:38 AM

    Markets Have Bought The Fed’s Transitory Narrative Hook, Line And Sinker, Part Deux

    Jesse Felder – The Felder Report – June 15, 2022

    Jun 18, 2022 18:40 AM

    Gold Rises in the Face of More Market Turmoil

    David Erfle – Friday June 17th, 2022

    “The Federal Reserve raised its target interest rate by three-quarters of a percentage point on Wednesday to stem a disruptive surge in inflation. The central bank also projected a slowing economy and rising unemployment in the months to come. The rate hike was the biggest announced by the U.S. central bank since 1994 and came six months after Fed Chairman Jerome Powell said during a congressional hearing in December that it’s time to retire the term “transitory” when discussing the current U.S. inflation trends.”

    “Moreover, the institution which is now so far behind the inflation curve that it must raise interest rates at the fastest clip in nearly 30 years, is insisting it can do so without causing a recession during a sovereign debt crisis. In order to suppress the obviously out of control inflation it did so much to create, the Fed must slow the economy meaningfully with U.S. debt to GDP at over 130%.”

    Jun 18, 2022 18:43 AM

    Gold Setting Up to Surge After Summer

    Jordan Roy-Byrne CMT, MFTA – The Daily Gold – June 16, 2022

    “With the Fed hiking rates, real yields rising, and the economy likely entering a recession, sentiment is the polar opposite of two years ago. Some are ready to throw in the towel. However, that would be a massive mistake. Gold soon will be in a position to again attempt and, next time, make that major breakout through $2100.”

    “Below is an excellent chart from Chris Rutherglen, which plots Gold along with the (inverse of) real 10-year yield, which many on Wall Street have said has the strongest relationship with Gold. Looking closely, you can see how Gold leads real yields at key turning points.”

    Jun 18, 2022 18:49 AM

    Well… the Crypto-crash and carnage continues….

    Bitcoin took a swan dive down even further in early morning trading going into Saturday, and tagged $18,718 at 1:15am, and since has rallied back up some to $19,358 at the time of this post.

    Still, from the all-time high of $69,000 back in November of 2021, to the present price that’s a about a 72% crash in just 7 months.

    So is Bitcoin a “store of value”? – (nope)

    So is Bitcoin a superior “inflation hedge”? (nope)

    So is Bitcoin the widely dubbed “Gold 2.0” (nope)

      Jun 18, 2022 18:35 AM

      Remember this “Drop Gold” commercial from GBTC a few years ago?

      It didn’t age well… Bitcoin is not Gold 2.0 😉


      Grayscale Investments – Drop Gold Commercial

        Jun 18, 2022 18:51 AM

        President Bukele is having a bad day.

      Jun 18, 2022 18:09 AM

      +1000- Bitcoin is a NO NO Nanette, always has been for me. DT

        Jun 18, 2022 18:29 PM

        Cryptos are simply speculative asset classes in the #tech space, as the huge runs in Dogecoin and Shiba Inu off Elon Musk tweets demonstrate, or the focus on #DeFi (which I believe Decentralized Finance shows a lot of promise… in the tech sector… not as a #SafeHaven)

        Meanwhile #Gold has held it’s ground over the last 8-9 months when most other assets dropped by 20%-80%, as a superior store of valued, during the highest inflation readings we’ve seen in 40+ years and the first garden variety Bear Market in general US equities we’ve seen since the 1999-2001 Dot Com bubble bursting.

        Mike Larson nailed it once again with this point on the weekend show in his segment, that the silly things we saw in 2020 and into Q3 and Q4 of 2021 were the same kinds of ridiculous “end of cycle” things (stay at home stocks, biotech vaccine stocks, meme stocks, reopening stocks, growth stocks with no earnings like no income EV stocks and mission to Mars stocks, all the tech and social media and DeFi Unicorns, SPACs, Cryptos, NFTs, etc…) like we saw in the Dot Com bubble (the of the world). Many of those stocks will not survive and are going out of business down to $0.00, but there will, of course, be a few survivors that thrive and gain the market share. Whether or not they’ll retain their leadership status anytime soon though is far less likely.

        This chart of #Bitcoin vs #Gold year-to-date in the volatile year of 2022 show which is the store of value and better inflation hedge very clearly, and also demonstrates definitively that Bitcoin is not Gold 2.0.

    Jun 18, 2022 18:02 AM

    The big question on my mind is how long do we have before the conventional markets begin a massive forced selling capitulation like happened in 1929 and everything gets sucked under including our resource stocks. That of course is the best possible time to be in cash because the bargains will be unbelievable.
    At some point The Fed must come back in with QE to support the markets, money printing may initially work but at some point it will be of no use because the dollar is worthless. We may be okay until mid August. Most big market corrections always seem to start in September and culminate near the end of October. As if these markets are not already down, they still have a lot further to fall.
    Yesterday Russia cut off gas and oil supplies to France and Italy.
    When you see “air holes” in the market, in other words stocks which are offered for sale without any bids at all in sight, run for the exits. DT

    Jun 18, 2022 18:40 AM

    Well Rick is certainly a knowledgeable market manager…He believes no such thing as a FED pivot will occur out there…Apparently the FED will crash the market if required in order to fight inflation?…REALLY?…I just do not buy that..Inflation is built in at this point and they are hurting consumption in an effort to fight inflation?…REALLY…..But I trade off of charts…lmao…EX…If ever we need a thesis paper, this is it……too early for yping yet for me…thanks to KER for being home to all these incredible money manager guests….Over time peeps will figure to stop here first for market relevant input…..glta

      Jun 18, 2022 18:52 PM

      Hi Larry and thanks for the kind words, and I agree Rick is “certainly a knowledgeable market manager.”

      I’m in a bit of rush today, getting reading to do a bit of traveling, but here are a few thoughts.

      I believe Rick’s point was simply that the Fed is working on the side of the equation they can influence [demand] as they have no real impact on the other side [supply]. As a result, they are trying to mute demand by “inflicting losses on the general stock markets” and “creating a reverse wealth effect” as former NY Fed chair Bill Dudley promoted. We’ve seen that in the housing market starting to roll over, and the stats around new housing starts drying up (which will have a ripple effect across many markets, but will impact consumers feeling of wealth as their assets go down in nominal terms).

      Will all of this impact inflation… it depends on where people believe the inflation came from. As discussed ad naseum on this show over the last few years, and more recently on many of the posts submitted on the Sean Brodrick blog earlier this week, the classic definition and accepted understanding of where inflation comes from is an increase in the money supply.

      The Fed was definitely guilty of increasing the money supply with little regard to the inflation it would create, and laughably wanted to see inflation get up to 2% (when it already was well over that on any real metrics like John Williams Shadowstats). BTW, no citizen should have ever been rooting for higher inflation, as it just reduces their quality of life and is an insidious tax on everything – products and services. Only banksters are rooting for higher inflation.

      Fed monetary policy creating massive amounts of magical new money from nothing, was one side of the issue, augmented by the wreckless fiscal policy from governments on massive stimulus bills stuffed with pork and SJW programes, and spiked by helicopter money sent out by the government in stimmy checks, PPP business loans that were misused for personal consumption, rebates based on children in the house, extended and expanded unemployment benefits (where people made more to stay home than to go to work), and all other such nonsense we’ve seen over the last 2 years. When there is an increase in money supply chasing the goods and services, inflation is the result. Period.

      The popular scapegoats of “supply chain interruptions” and “war in Ukraine” definitely escalated the process and hurt supply, but they are not the cause of the inflation as so often touted. If the Fed wants to really reign in inflation, they can keep hiking, and more importantly go through with reducing their balance sheet and overall liquidity, but all their policies, in their own words, take 6-12 months to take effect. Any reduction in the CPI numbers for the balance of this year will not be because of Fed policy, and will merely be a reduction of trend in inflation due to the year-over-year comparables or Base Effect. This won’t stop the Fed goons from taking a victory lap if we see the CPI figures trend down, but it will not be from their efforts at this early stage.

      However, the Fed have actually been very proficient in one area… and that is losing investors confidence and tanking the equity markets. They were wrong about the prior housing bubble in the G.F.C., wrong about how quickly inflation would grow, wrong about claiming they were “not even thinking of thinking about hiking rates until 2023”, wrong about inflation just being transitory in March & April of 2021, and wrong about how far behind the curve they got. It is a true policy error of epic proportions, but not a surprise.

      If that failure to act continues, or even if they continue to act at this point, it may affect how enthusiastic consumers are to go out and spend on discretionary items, and this will have an effect of chilling the economy. Sure, they’ll temper demand, but at what costs for everyone else. We see that clearly in the recent lower-than-expected retail sales numbers and record low consumer confidence readings.

      With so many consumers in the hurt locker, living off savings, living off home equity lines of credit, or living off credit card plastic, the high prices at the gas pump, grocery store, and for almost all products and services will mean the excessive demand and buying of yesteryear will gradually start drying up. This will be reflected as the Q2 earnings reports come out, with companies seeing lower sales and revenues, and likewise being squeezed by inflationary pressures and higher cost inputs and labor inputs. Look at the kerfuffle from so many retailers in Q1 (like Walmart, Target, etc…) or social media companies like Snap or Facebook showing the pain is starting to show up in the earnings numbers.

      The Fed has a choice coming up later this year (after the July and September meetings where they plan on hiking rates 50-75 basis points). This is the “Choke Point” or “Tipping Point” or “Gotcha Moment” or “Check Mate Moment” where we find out if the central banksters will stay firm with continuing to raise Fed funds rates up to where inflation is (and likely incite a true recession), or if we see a “Powell pause” where they do nothing and try to jawbone the markets into submission, or a “Powell pivot” where they reverse course and eventually start cutting rates again from a higher level, and potentially implement QE once again to try and reliquify the markets.

      When one looks at the negative GDP quarter in Q1, and the downward estimates on GDP Now for Q2 from 2% to 1.5% to 1.2% to now 0%… it’s pretty clear we are seeing stagnating and slowing economic growth, and when paired with runaway and persistently high inflation, soaring energy prices, and more recently small business and large businesses shedding workers, we are already headlong into Stagflation. Will this morph into a recession, or inflationary depression? We’ll just have to see how it plays out over the next 12 months or so.

        Jun 19, 2022 19:45 AM

        gulp….🔊📞🕶…pretty good summation for a rushed writer….i could not have said it better myself…because i could not have…lmao….seems to be a fairly dangerous economic experiment…right…let us choke down the economy enough to dampen consumerism which adds to demand inflation when supply chain troubles already exist…we will just match tit with tat…brilliant…….it will not work…something bad will happen…people will loose jobs on a massive scale…building homes and the down-line economics is massive…bigger than the auto industry by factors….these clowns will never,’thread that needle.’…they are tinkering in the abstract by using their number analysis they lean on… will let them down along with us……the fact that Matthew likes this fellas work is another reason that i will listen once again with more insight now that i see how you read this EX…thank you…who can not enjoy a site w such talented commentators…glta

        putt putt anyone?

          Jun 19, 2022 19:58 PM

          Bad things are definitely going to happen no matter what the Fed does and the massive wealth transfer (theft) of the last two years was just the beginning. This is what the US gets for allowing a monetary system that satisfies Karl Marx’s prescription in his communist manifesto (5th plank). Isn’t it suspicious that no Republican presidents of the last century have been properly critical of it? There hasn’t been one non-Rino Republican president since Coolidge and it’s easy to see why.

          Jun 19, 2022 19:26 PM

          Thanks for the kind words Larry, and some good points in your response about how large the housing sector is, and how a slow down may hit a number of supporting sectors. Yes, I agree that it will be very fascinating to watch and see if the Fed can thread that needle, but it seems quite doubtful they’ll pull off the soft landing.

          As for the crew of contributors at the KE Report – very well said Larry. We have a wonderful group of folks sharing thought provoking ideas and investing insights with one another here, and it keeps regular listeners and readers very well-informed.

      Jun 18, 2022 18:55 PM

      I listened to Rick because of your comment Larry and he’s the first expert I’ve come across that has impressed me across the board on interest rates as well as his current and long term outlook on commodities. I agree with him so completely in this interview that I’m almost shocked. I’d buy his ETF so I hope it gets set up soon.

      Some of the points he made that align with my recent comments:
      -Fed was forced/had no choice with respect to the .75% hike
      -Fed doesn’t care about the stock market (but that myth will live on!)
      -Significantly higher rates are coming over time
      -Inflation’s gonna get a lot worse
      -Just trading bounces from here in the stock market

      Being overweight financials is the one thing I disagree with.

      Rick’s lightening up his XLE exposure on June 1st was superb timing based on the monthly chart which will obtain a bearish engulfing reversal if it doesn’t improve by the close in less than two weeks from now. The quarterly also currently suggests the “need” for a multi-quarter correction/consolidation.

      Let’s get that ETF launched!

        Jun 18, 2022 18:22 PM

        Yeah, we’ve been tracking how well Rick has been doing with his 7:11 report the last 2 years, and he does a great job with sector rotation using his quantitative analysis, technical analysis, fundamental analysis, and behavioral investing knowledge.

        We talked a little to him after the call encouraging him to get the 7:11 ETF launched, but he needs the larger capital partner to come in with him to get through all the minimum requirements, holdings, and regulatory fees/process. We mentioned our buddy Axel Merk was successful in just partnering with Van Eck for his brand new Merk Stagflation ETF (STGF) that launched in May. We are rooting for Rick to get his ETF going for sure!

    Jun 18, 2022 18:56 AM

    The Fed’s options are now very limited—-they will have to crash a number of asset bubbles this time and will plow forward. Their Y-O-Y inflation comparisons will start to improve in July but they will still move forward. Food/energy inflation will be problematic for some time but the core CPI should start to improve if you consider the recent inventory/sales ratio. The long term charts indicate at present that the angst will continue to the end of this year. 2023 will be the year that the FED verbal jargon will give people hope. They just began QT this month—-when they start to reverse, it’ll probably be in the tightening area first versus interest rates.

    Jun 18, 2022 18:57 AM

    Silver screaming to be bought here. Commercials CoT least short hedge exposure in as long time.

      Jun 18, 2022 18:04 PM

      Right on, Chris. Gold looks great and silver looks better. Both improved significantly yet again. The caveat is, as usual, that the CoT positioning is no good for short term timing of trades.

    Jun 18, 2022 18:46 AM

    Jackson Hole. Safety in numbers.
    Organized blame and reset. “Gosh we used every tool in our tool box including transfer of wealth”.

    Jun 18, 2022 18:39 PM

    (WM) (WLBMF) Wallbridge Mining – When finding too much gold becomes a problem

    by @bardown on 5 Jun 2022

    Jun 18, 2022 18:58 PM

    I think the Fed has it’s own politics and will lower rates once the economy is firmly in recession and the masses demand it. they can’t fix government policy induced inflation.

    I am just wondering if there is a summer ralley in mining stocks?

    Jun 18, 2022 18:16 PM

    GLD/Gold looks good but might need to backtest its 6/14 low.

    Jun 18, 2022 18:22 PM

    We are born with nothing and we will go out with nothing, but while we are here it is every man for himself. That’s how it’s always been and always will be. Stop trying to figure out The Fed, they do not care about anything other than their jobs. LOL! DT

      Jun 18, 2022 18:33 PM

      Also DT, we now have the grand puba of the World Economic Forum, Klaus Schwab, telling us emphatically that in the future: “You’ll own nothing, and be happy about it.” 😉

      Jun 18, 2022 18:47 PM

      You’ll make more money if you understand what drives the Fed to do what it does.

      Jun 19, 2022 19:49 AM

      Their jobs … and their lives. Fed folks are not the ultimate shot-callers.

        Jun 19, 2022 19:41 PM

        Agreed BDC. The Fed and other central banks are not the ultimate shot-callers, and really their track record of calling things is pretty terrible, and often they are far behind trends until it’s so in their face that they are forced to act. However, they are able to influence and intervene in the free markets in an artificial (and sinister) way, and still carry a heavy hand in shaping both monetary policy and to a degree investor sentiment. In that sense, it’s worth considering what they actually do, as their actions matter far more than their words.

    Jun 18, 2022 18:12 PM

    The Russians have now proved that The Mighty American Dollar is worth nothing. The Ponzi scheme is up. America is the largest debtor nation the World has ever seen. They have no industry they gave it away to the Asians who they thought weren’t very smart, and could be easily controlled. What a joke? At one time America had solidly managed companies like USS, United States Steel, General Electric, Allied Chemical, Westinghouse, the list goes on and on. Now they have nothing but debt, useless government, terrible foreign policy that has caused ill feelings for them all over The World. The American Empire is collapsing within their borders and outside their borders. DT

      Jun 18, 2022 18:23 PM

      The problem is, the people behind the debt Ponzi scheme NEVER collapse and never will. The bill will be paid entirely by the clueless masses.

        Jun 18, 2022 18:55 PM

        When the barbarians realized that Rome was a Ponzi scheme they destroyed the aqueducts that gave Rome it’s water, and Rome immediately went from a city of 1 million inhabitants to 30,000.
        America’s lifeline comes from it’s ability to convince others that their currency is worth something. It is worth nothing and it is the lifeline of their economy. The gig is up! DT!

          Jun 18, 2022 18:04 PM

          That doesn’t negate my claim. The supranational rulers will be untouched. As usual.

            Jun 19, 2022 19:51 AM

            “This, too, shall pass.”

            Jun 19, 2022 19:17 PM

            Their power ebbs and flows but doesn’t pass. It’s nice to dream though.

    Jun 18, 2022 18:24 PM
    Jun 18, 2022 18:40 PM

    LIT is far from “all clear” but might be worth a shot here…

        Jun 18, 2022 18:23 PM

        There may be some more weakness in store URA, as the U-stocks have really run hard for 2 years.

        I could see URA pulling back to either the 144 day EMA at $18.13, or the 233 day EMA at $17.19.

        After that next lateral support would come in at the prior higher low of $16.30.

          Jun 18, 2022 18:01 PM

          I think URA will go below 12 and LIT will hit well below 40.

            Jun 18, 2022 18:49 PM

            Yeah, that wouldn’t surprise me on either, especially LIT going to 40. If we saw that kind of a corrective move in lithium miners, then I may wade back into a few of them.

            With URA, that would be a bummer to me if it pulled all the way down to 12, as I hold 7 uranium stocks at present, and they are about 11% of my portfolio, so a sharp move down like that would sting quite a bit. If we see a bounce soon, I may lighten up on those positions some and raise some funds earmarked for taking advantage of any further declines in the U-stocks.

      Jun 18, 2022 18:16 PM

      It looks quite possible that LIT is finishing up the right should of a head & shoulder pattern. If that’s the case, there could still be a long fall down for the Lithium stocks. Glad I finished liquidating the Lithium stocks held in my portfolio last year, as it seemed very frothy and due for a longer corrective move.

    Jun 18, 2022 18:47 PM
      Jun 18, 2022 18:05 PM

      Good Copper chart Matthew. It does look like it has pierced down through support now, and could drop quite a bit lower. Steve Penny had a good Copper chart on his Friday editorial with us here on the KER, and he mentioned if $4 gives way that a quick move down to $3 could be in order. He felt that it could go either way, but sounded more bullish than I believe the chart looks. If the economy is slowing down, and if we are moving closer to a recession, and with China all closed down, even though I really like copper longer term based on supply/demand factors, I’m a bit worried in the more short to medium-term.

      Right now I just have exposure to a few Copper producers Sierra Metals & Atico Mining (but don’t currently have my COPX exposure). However, I do still have exposure to 2 explorers, Kodiak & Libero, that could still march to the beat of their own drums based on how their exploration seasons go. However I also have exposure to a few multi-metals developers that still have significant copper exposure like Group Ten, Troilus, Metallic Minerals, and even some exposure through McEwen Mining’s Los Azules project. For the most part I’ve continued paring down my overall copper and really most base metals exposure throughout 2021 and early 2022, but if Copper fell out of bed it would still hurt the above positions, and likely it would drag down other base metals like Nickel, Zinc/Lead, and PGMs in sympathy. Bummer…

    Jun 18, 2022 18:31 PM

    Seems all kind of counter intuitive ….again.

    Jun 18, 2022 18:43 PM

    I am all in favor of all the theories and charts that say commodities are going up. They artificially inflated the General Markets Up and Commodities Down. They have tremendous debt problems for sovereigns and tremendous off balance sheet derivative problems for the crooks. The dollar and other fiat currencies are at the end of the road. All they can do is the same failing QE and lie. In the meantime, the rest of us will be trying to get assault weapons as it is the only issue concerning freedom so they tell us.

      Jun 18, 2022 18:13 PM

      I could be mistaken, but got the impression from Matthew’s charts that weakness he sees in store for commodities and resources stocks in Lithium, Uranium, Copper, and the CRB index (most heavily weighted to Oil/Nat Gas) is likely more short-term to medium-term weakness possibly over 3-9 months or so.

      Personally, I didn’t take away from those charts that they were bearish for the longer term (years), but a further pullback in the commodities space does seem overdue, especially with slowing economic growth, and after many have been on relentless runs higher. That is a similar point that Rick made on the weekend show. Some of the ratio charts could also resolve where commodities pull back some, but in tandem with other asset classes gaining some ground relative to commodities. Seems reasonable to me, and if we see a big corrective move in the commodities, it would knock a bit more froth out of the sector, and provide a better spot to build positions back up in the base metals and energy metals.

    Jun 18, 2022 18:20 PM

    All good commentary………….bottom line…………….Fed is at the end of the line in it’s credibility…..Powell and team (400 economists)have had only one job in last year…………they completely blew it……………it seems that stagflation is the only answer as global debts at insane levels and out of control inflation could never be fully contained without absolute mainstreet KAOS……….fed will have to buckle and save governments deficits and throw mainstreet to the inflation wolves……….Nouriel Roubini tells it like it is….

    Jun 19, 2022 19:40 AM

    Early Sunday morning saw Bitcoin with 18,000 handle

      Jun 19, 2022 19:07 PM

      Heard rumor that Soros made 75 billion shorting Bitcoin

    Jun 19, 2022 19:06 AM

    Does a peace pop fuel that retest of previous equity highs?!….g-d is not speaking on this…She prefers peace…glta….

    Jun 19, 2022 19:29 PM

    The miners have been undeniably resilient lately but obviously are still not in the clear…

    Jun 19, 2022 19:19 PM

    Juneteenth?? Really, you guys just had July4 and now two weeks later, another public holiday. Here in China we just had Dragon Boat Festival and before that Tomb Sweeping Day, both public holidays. I’d prefer markets to be open 24/7.. 365.

      Jun 19, 2022 19:33 PM

      Hi Terry, markets should never be allowed to close, AGREED! DT

      Jun 19, 2022 19:41 PM

      Juneteenth is idiotic.

      Jun 19, 2022 19:44 PM

      Agreed Terry, but just as a heads up we have not had the 4th of July holiday yet. (it only being mid-June). 🙂

      We just had Memorial Day is likely what you were thinking.

    Jun 19, 2022 19:09 PM

    It appears the dollar wants to run for awhile and probably wants to begin a topping process at the end of this year—-this along with some incoming recessionary dis-inflation and margin compression of PM companies by energy and other inflationary costs will probably create continual headwinds for gold as we enter the second half of 2022. I don’t see a V shaped recovery for these PM stocks but a gradual bowl bottom shaped recovery as we move into the second half and first part of 2023.

    Jun 19, 2022 19:34 PM

    For those that may have missed it – check out:

    Jeff Snider at The Eurodollar University is arguing that interest rates will be headed down sooner than later –

    As always things are often not what the pundits are preaching.

    Jun 19, 2022 19:09 PM

    The 10 year UST just erased all of its gains since 2008 in less than 2 years despite the fact that stocks have been tanking so a relief rally here or very soon would make perfect sense. In other words, falling yields here or very soon would make perfect sense. Such countertrend moves should be expected. For example, the secular trend in yields was down from 1980 until 2020 but there were numerous countertrend moves (rising yields) that lasted many months to many years. Yields are going vastly higher in the years and decades ahead but there will be multi month and multi year periods that will cause the dumb money to doubt it.

      Jun 19, 2022 19:16 PM

      Like commodities, yields have earned a good break from their 2 year run higher…

        Jun 20, 2022 20:50 AM

        Hey Matthew – On my charting software there is a large gap on the weekly chart of ISVLF down near the 2016 low. Do you see the same gap on StockCharts? If so, how do you handicap that gap getting filled in the near to mid-term? I am beginning to think it is more likely than not.

          Jun 20, 2022 20:37 AM

          Yes, that huge gap is real but is about one-sixth the size on the TSX-V so I haven’t been too worried about it. I’d be lying if I told you I could accurately give the odds but I think they are slim and would require a general market crash. Even with such a crash I am not sure it would get there but it sure could. Something to watch is the quarterly close in 8 trading days. Simply closing at the current level would obtain a quarterly MACD sell signal for IPT but not for ISVLF so the best thing would be a good bounce from here to prevent the IPT sell signal. It was a new quarterly MACD sell signal that came right before gold crashed in 2013 and such sells are obviously not good for any asset class.

            Jun 20, 2022 20:23 AM

            Thanks and good to know. As I don’t have access to quarterly data, please call out the IPT sell if you see it.

      Jun 20, 2022 20:02 AM


      RE: the Jeff Snider at The Eurodollar University link above – he is one of the few folks that appears to deeply understands the “plumbing” of the “Eurodollar System” (a phrase that refers to the dollar outside the US and the beyond the control of the FED, a very large market indeed). He argues that things are not as they appear. To say that this is complex is an understatement. But, he is arguing that the Fed really isn’t in total control and that they will be lowering rates sooner than you think. I’m not going to try and distill his arguments because I lack the background to do so but essentially I think he argues that the world has too little quality collateral and that markets are headed to a point where they will seize up. This will happen not because the banks don’t want to lend but because they can’t find creditworthy customers that want to borrow $’s. He also says that the Fed’s control is more of an illusion than anything else – they will have to respond by lowering rates sooner than you think.

      He isn’t alone – see:
      On this podcast the guest, Frances Donald, says she expect by this time in 2023 the Fed will be lowering rates because they have no choice.

      Frankly to process all this I feel I need a degree in Economics but the rumbling we are all sensing aren’t just indigestion from one too many atomic tacos – it is real and will show its face soon.

        Jun 20, 2022 20:38 AM

        Most derivatives are based upon something real, like covenant debt or hard stuff: commodities, etc.

        The Dollar is unique in that it is based upon the ability of taxpayers to pay taxes, or the Federal Reserve to create future ‘money’ because it can. When such sources come into question there can be problems.

        The ‘Euro-Dollar’ is a derivative of the U.S. Dollar, which itself derives value as mentioned, and also because oil is traded, often by decree, in Dollars.

        Those who have exchanged real wealth for Dollars of any sort are at risk of losing if the Dollar system is annulled. This is possible.

        Jun 20, 2022 20:46 PM

        I’m not familiar with Jeff Snider and his position but he is right about the Fed not being in total control. It has never had even close to total control which is why it has always followed the market’s lead. Market forces raise or lower interest rates and Fed policy follows. Nevertheless, those who underestimate the powers the Fed does have are playing with fire. Snider and Donald are definitely not alone. In fact, they appear to hold the most popular view among the experts.

        Jun 21, 2022 21:22 AM

        Best if you get the latest version of Voodooconomics, brought into being shortly after the JFK event.