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Legal Market Rigging and the Panic of 1873

By: Justice Clark Litle

6 hours ago | Educational

Is the stock market rigged? That is to say, are there shadowy hidden forces influencing market prices, in a manner that most investors don’t understand and often aren’t even aware of? The answer to that question is yes. Absolutely and without question, the stock market is rigged. But perhaps not in the way one might think, and not for the…

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The Stock Market’s Bizarre Strength is Not About the Reopening, or the Recovery, At All

By: Justice Clark Litle

1 day ago | Investing Strategies

The stock market was insanely strong last week. And we don’t mean strength within normal boundaries either — as in, “the market had a strong performance” or “the market looks strong.” This was strength well beyond the bounds of normal. It was strength so freakish, the standard explanations cannot account for it. Here is Mark Hulbert, a columnist for MarketWatch,…

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In Deflationary Environments, Central Banks Make the Price of Gold Go Up

By: Justice Clark Litle

2 days ago | EducationalInvesting StrategiesNews

After we explained why deflation is coming, some of you wrote in to ask: “What happens to gold if we get deflation?” The short answer is that, in deflationary environments, the value of gold tends to go up, possibly by a lot. We have empirical evidence of this from the 1930s, a decade where gold mining stocks saw stratospheric gains….

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Goldman Sachs Had an Embarrassingly Bad Take on Bitcoin

By: Justice Clark Litle

5 days ago | Educational

On a May 27 video call discussing the U.S. economic outlook, Goldman Sachs tried to dismiss cryptocurrencies in general, and Bitcoin in particular. The Goldman powerpoint slide, which made the rounds on Twitter, was titled, “Cryptocurrencies Including Bitcoin Are Not an Asset Class.” The whole thing was deeply embarrassing — for Goldman Sachs. In fact, the power point bullets advanced…

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“Deflation World” is Coming — and It Will Be Like Nothing You’ve Experienced

By: Justice Clark Litle

6 days ago | Educational

“Deflation World” is coming. For many, if not most, it is going to be a bizarre and disorienting experience. Most investors will fail to understand what is happening, or to process the consequences of what deflation will mean. And many of the “normal” financial relationships investors have come to expect will seem to run backward, like a movie playing in…

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Why Buffett Sold Berkshire Hathaway’s Goldman Sachs Position

By: Justice Clark Litle

1 week ago | Educational

When Warren Buffett explained his logic for dumping airline stocks, he was blunt. “It turns out I was wrong,” Buffett said via teleconference at the Berkshire Hathaway annual meeting. “The airline business — and I may be wrong and I hope I’m wrong — I think it has changed in a very major way,” he added. For an investor whose…

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Was the Rebound Powered by Sports Gamblers and Stimulus Checks?

By: Justice Clark Litle

1 week ago | News

The strength of the stock market rebound has been a mystery. (To give you a sneak preview, today we’ll explore a narrative that solves the mystery.) It’s not just that stocks — not all stocks, but a favored group — are showing a kind of bizarre optimism, relative to a catastrophic collapse in the real economy, the ongoing challenges of…

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Physical Gold Has a Centralization Problem

By: Justice Clark Litle

2 weeks ago | Educational

Physical gold has a centralization problem. It tends to gather in centralized places, and be guarded by centralized forces, under the strict administrative control of some centralized political authority.  In regard to this topic, Ed Seykota, a legendary trend trader, made a spot-on observation in his late 1980s Market Wizards interview: “Gold tends to be dug up, refined, and then…

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Negative Bond Yields Infect the U.K.

By: Justice Clark Litle

2 weeks ago | News

The U.K. government achieved a dubious milestone on Wednesday, May 20. It sold its first ever batch of negative-yield bonds. In 2016 — when Brexit took markets by surprise — a one-month U.K. treasury bill went negative. But May 20 was Britain’s first time for a conventional longer-term bond. The offering was for 3.8 billion pounds worth of three-year gilts…

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Liquidity, Solvency, and Zombies

By: Justice Clark Litle

2 weeks ago | Educational

“Free money from the Federal Reserve” sounds fantastic for stock prices. Picture a giant firehose of liquidity, just spraying cash in every direction, as the Fed expands its balance sheet by trillions. How could U.S. companies — and stock prices — not benefit from that bonanza? Pretty easily, that’s how. It has to do with the difference between liquidity and…

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