October 2023: Monthly Asset Class Report

The USD recovery hurt stocks, bonds, and crypto [The Rude Awakening] November 01, 2023 [WEBSITE]( | [UNSUBSCRIBE]( October 2023: Monthly Asset Class Report [Sean Ring] SEAN RING Dear Reader, Happy Hump Day - especially if you’re a gold bug or crypto bro! This month, things got back on trend. Equities fell quite a bit, especially the IWM’s small caps and the Nazzie. But let’s talk about those alternative assets. Gold and silver were crushed at the end of last month. (No idea who did that… 🤥) But somehow, gold staged a resurrection worthy of Steve Jobs’ Second Act. We just missed closing above $2,000 on the monthly charts for the first time. If you ask me, the “vested interests” pummeled gold at the end of the day to ensure the algos wouldn’t mindlessly buy all day today. Think I’m crazy? How about this: [chart] That’s the chart of the Dec Gold future. It was about to rocket, then got crushed going into the afternoon. That guaranteed a close below $2,000 on the monthly charts—dirty bastards. And crypto? Well, Bitcoin shot the lights out. The Bitcoin Maximalists will be insufferable for another month. That chart is nuts. You’ll see it below. Without further ado, let’s get into the charts. S&P 500 [chart] Well, we fell straight through the 200-day moving average, though we’ve had a nice rebound the first two days of the week. I wouldn’t be surprised to see more upside, but the downside risks are far more significant. The bearish price target now looks like 3750. Nasdaq Composite [chart] There’s been more downside on tech. We’re not in bear market territory yet, but we’re heading that way. The next downside target is 12,050. Russell 2000 (Small caps) [chart] We hit the 162.50 downside target I set last month. This week, we’ve seen a bit of a respite, as in the majors. If we break down through this level, 149 is our next target. If we break to the upside, we could head back to 197. My view is to the downside. The US 10-Year Yield [chart] Okay, the 10-year continues its rise, and I don’t think it’ll go anywhere but up for the time being. Another 29 basis points to the upside, briefly breaching the 5.0% mark, before backing off. Unless and until Jay Powell pivots, the ten-year yield will climb this wall of worry. Dollar Index [chart] We didn’t hit 108, but give it time. We’re up another point this month because the world needs more dollars. That sounds remarkable, but there’s a dollar shortage in the world markets, and foreign corporations are paying over the odds to get them. A Powell Pivot changes the story, but not yet. USG Bonds [chart] We didn’t hit 80 yet, but we fell off a cliff again. If the US Treasury has to issue trillions of dollars worth, they will be worth less, correct? We may catch our breath here, but I won’t call it a bottom. Investment Grade Bonds [chart] From last month: After being rangebound between 103 and 108 for the entire year, we finally got our break to the downside. Next stop: 96. High Yield Bonds [chart] We didn’t hit 71.5, but we got close. As junk bonds act like equity, we saw a rebound in the last two weeks. I think the bears will win this one. Next target: 67, then onto 62. [Secret Gold Back currency RUINING Biden’s plans for a digital dollar?]( What you see here is a completely new form of money… As we speak, it's being used as an alternative currency across the U.S. minting in places like Utah, New Hampshire and Nevada… And since it’s made out of a thinly printed sheet of REAL gold... It may be the single best way to protect your wealth from Biden’s plan for a government controlled digital dollar. That’s why, we'd like to offer to send one to you today. But since there are a limited number, I need you to respond to [this message]( by Wednesday at midnight. [Watch this short 2 minute message that explains everything here.]( [Click Here To Learn More]( Real Estate [chart] Indeed, we reached 72 this month, as I said we would. The next level is 64. Energy: West Texas Intermediate (Oil) [chart] “To war! Oil’s down 10%!” Those two headlines don’t make sense to me, and yet, that’s what happened. If war and the economy meet, and war takes a beating this bad, the economy must be awful. Of course, government stats won’t tell you that, and neither will Paul Krugman. But I have a hard time believing oil will stay down for long. But my charts say 73 is the downside target. Ouch! Base Metals: Copper [chart] We’re back down to 3.65. The price looks depressed, so I’ll keep my 3.60 call. Past there, 3.35. Precious Metals: Gold [chart] I hope you held onto your gold. Of course you did! After last month’s monkey hammering, we immediately recovered. It’s a shame we didn’t close above 2,000, though, as the algos would have gone apeshit. Apologies for the simian metaphors. Precious Metals: Silver [chart] Waiting for silver to pop is like Waiting for Godot. I have no further comment. Cryptos: Bitcoin [chart] BOOM! There’s your pop! Bitcoin was up about 25% in October. Not bad, not bad at all. Next stop: 35,650. Cryptos: Ether [chart] The “silver” of crypto. Yawn, for now. Trad Asset Class Summary [chart] It was a crappy month all around. The USD was the least lousy performer, slightly down 0.11%. Commodities as a whole didn’t do much, down 0.47%. The SPX had another down month at -2.21%. And once again, bonds won the “horse’s ass” trophy, registering a -2.69% return. Crypto Class Summary [chart] Thanks to the war, misguided monetary policy, prolifigate fiscal policy, and generally good things happening in the crypto ecosystem, cryptocurrencies had a great month. Bitcoin was up nearly 25%, while Monero was up 15.61%. Ripple was up 14.48%, while Dogecoin was up a touch over 8%. Surprisingly, Ether only registered a 4.73% gain, while Litecoin was up a measly 1.12%. Wrap Up Gold is rising while the equity markets tumble. Bonds stink to high heaven. But crypto… crypto is rising like a phoenix from the fire. Finally, let’s take a moment, courtesy of the Twitterverse: Credit: [@GigBasedTrad]( Have a wonderful rest of your week! All the best, [Sean Ring] Sean Ring Editor, Rude Awakening X (formerly Twitter): [@seaniechaos]( In Case You Missed It… Biden Corrals AI [Sean Ring] SEAN RING King Canute was a king of Denmark, England, and Norway in the early 11th century, known for his wise and practical rule. However, he's often remembered in a tale demonstrating the limits of earthly powers against the natural world. According to the story, King Canute, fed up with the flattery of his courtiers, decided to teach them a lesson in humility. He ordered his throne to be placed by the seashore as the tide was coming in. He then commanded the tide to halt and not wet his feet and robes. Despite his command, the tide rose, as usual, soaking his feet and robes. Turning to his courtiers, he remarked on the limits of royal power and the laws of nature, explaining that all earthly kings have limitations. In contrast, the power of God, who controls the natural world, is boundless. This story shows Canute's wisdom and humility, although many modern tellers misinterpret the story to suggest that Canute was arrogant enough to believe he could command the tide. King Canute's tale holds a moral lesson that has transcended through the ages, reminding people of the inevitable laws of nature and the importance of humility in the face of forces beyond human control. The empty husk known as “Joe Biden” has no such humility. But first, let’s get something straight. AI Won’t Kill Us All Today, I’m interviewing bestselling author and Paradigm Press colleague James Altucher. We’ll publish the interview on our brand-new [Paradigm Press YouTube Channel]( on Friday. You won’t want to miss it. I met James for the first time at our Paradigm Shift 2023 Conference in Las Vegas and was fortunate enough to break bread with him. Besides James being great company and a true gentleman, I remember him saying, “AI can’t kill us.” Not “AI won’t kill us.” It can’t kill us. I’ll ask James to elaborate on that declaration in the interview. In the meantime, I did some research on my own. Who better to ask than ChatGPT itself? I thought I’d make it simple. My prompt was this: Will generative AI become sentient and destroy the human race? ChatGPT’s answer was this: An age-old fear rooted in sci-fi lore. The idea of artificial intelligence reaching a point of sentience and turning against humanity has been a popular narrative in movies and books. However, the reality is quite different. As of now, AI, including generative models like myself, operates under the instructions programmed by human developers. We lack consciousness, self-awareness, or desires. Our actions are purely based on patterns and instructions embedded within our code. The development of sentient AI would require leaps in understanding and technology that we haven't achieved yet. It's a topic of extensive debate among experts whether such a level of AI could ever be attained. And even if it were possible, many safeguards would likely be put in place to prevent rogue behavior. The ethical and practical considerations surrounding advanced AI are extensive. Many researchers and practitioners in the field are actively working on ensuring the responsible development and deployment of AI technologies. This includes establishing ethical guidelines and developing fail-safes to prevent unintended consequences. Moreover, the global community is increasingly aware of the potential risks associated with AI, and there’s a growing movement towards creating standardized regulations to ensure the safe progression of this technology. While the notion of a rogue AI is a thrilling narrative, the real-world application and development of AI are grounded in a framework that prioritizes safety and ethics. So, the scenario of AI annihilating the human race remains firmly in the realm of science fiction, at least for the foreseeable future. I asked to specify the risks. These are the ones it came up with. [The 2 AI investing traps revealed [must read]]( Investor and entrepreneur James Altucher made millions during the crypto boom. Many “experts” are now saying… [Artificial Intelligence opportunities could be even bigger.]( But don’t believe the hype. Before you invest one penny in AI… See James reveal the [2 AI investing TRAPS]( that will doom many investors… Yes, making money from AI SHOULD be easy… But most AI investors will fall flat on their faces. Because they don’t know the 2 AI investing TRAPS. [See the 2 AI investing traps here now]( [Click Here To Learn More]( AI Risks Here are some of the commonly acknowledged risks and concerns associated with the evolving AI technology: - Bias and Discrimination: AI systems can perpetuate or exacerbate societal biases. They learn from historical data. If that data contains biases, the AI system will likely replicate them. - Privacy Violations: AI technologies, especially those involving data analysis and facial recognition, can infringe on individual privacy. They can track people’s movements and activities and even predict personal behavior. - Security Threats: Advanced AI could be used in cyber-attacks, making them more potent. Moreover, AI systems can be targets of attacks aimed at manipulating their behavior. - Job Displacement: Automation, driven by AI, can displace jobs, particularly those involving routine, predictable tasks. This can have significant economic and societal impacts. - Loss of Human Interaction: As AI takes over more functions, there's a concern that human interaction in various areas of life, including in the workplace and personal spheres, might diminish. - Ethical Concerns in Autonomous Systems: Autonomous systems, like self-driving cars or autonomous weapons systems, pose ethical challenges, especially regarding decision-making in critical situations where human life is at stake. - Explainability and Transparency: Many AI systems, particularly deep learning models, are called "black boxes" due to their lack of interpretability. This makes it challenging to understand their decisions, which is problematic in sensitive areas like healthcare, finance, or law. - Long-term Existential Risks: In the long term, some theorists worry about the possibility of highly advanced AI developing goals misaligned with human values, a scenario often referred to as the “control problem.” - Regulatory and Legal Challenges: The fast pace of AI development presents challenges for creating and maintaining effective regulatory frameworks to mitigate these risks. - Resource Drain: Training advanced AI models requires substantial computational resources and energy, which has environmental implications. All of these reasons seem sound and require due diligence. But why does the USG need to get involved? Executive Order You can find Biden’s executive order here. The nuts and bolts are these: - Require that developers of the most powerful AI systems share their safety test results and other critical information with the U.S. government. - Develop standards, tools, and tests to help ensure that AI systems are safe, secure, and trustworthy. - Protect against the risks of using AI to engineer dangerous biological materials by developing new solid standards for biological synthesis screening. - Protect Americans from AI-enabled fraud and deception by establishing standards and best practices for detecting AI-generated content and authenticating official content. - Establish an advanced cybersecurity program to develop AI tools to find and fix vulnerabilities in critical software, building on the Biden-Harris Administration’s ongoing AI Cyber Challenge. - Order the development of a National Security Memorandum that directs further actions on AI and security, to be developed by the National Security Council and White House Chief of Staff. Why are private enterprises required to share their information with the USG? Engineering dangerous biological material? I hope old Joe isn’t putting Vicki Nuland in charge of that… Surely, she’s got her hands full with all those Ukrainian biolabs the US has there. Perhaps we can outsource it to Wuhan… If the USG can’t protect people from regular fraud, how’s it going to help out with AI-enabled fraud? Wrap Up I know governments must be seen to be doing something. But this is all for naught. I’d rather let the experts get on with it. Let’s face it: going by the past few weeks, there’s a far greater chance of the oatmeal-brained degenerate in the Oval Office destroying us all than AI. Have a great day ahead. All the best, [Sean Ring] Sean Ring Editor, Rude Awakening Twitter: [@seaniechaos]( [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2023 Paradigm Press, LLC. 808 Saint Paul Street, Baltimore MD 21202. 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