Postcards: Uh... Oh... They Broke Something

Markets don't just recover like this. There's a lot of central bank chatter right now, and that's what's giving us this monetary boost. ͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­͏   ­ Forwarded this email? [Subscribe here]() for more You are a free subscriber to Postcards from the Florida Republic. To upgrade to paid and receive the daily Republic Risk Letter, [subscribe here](. --------------------------------------------------------------- [Postcards: Uh... Oh... They Broke Something]( Markets don't just recover like this. There's a lot of central bank chatter right now, and that's what's giving us this monetary boost. [Garrett {NAME}](floridarepublic) Sep 13 floridarepublic   [READ IN APP](   Dear Fellow Expat: One afternoon, young girl - let’s call her “Amelia” - wandered into her father's office. It was a forbidden zone, a place filled with serious-looking books, blinking screens, and expensive doodads. Her eyes fixed on a shiny snow globe - the one that had the famous Chicago skyline inside. It was a memento… a gift from her aunt to her brother. It seemed to whisper, “Don’t touch, Amelia.” Naturally, Amelia touched it. One clumsy grab later, the globe hit the floor, shattering into a mess of water, glitter, and instant regret. Thinking fast, Amelia set to work on a hasty cover-up. A little mopping… some strategic rearranging there… a few pushes of remaining glass under the rug. That’s it… she’d convinced herself she’d turned the disaster into the perfect coverup. Of course, her father would notice eventually. But Amelia had learned an important lesson—one that plenty of central bankers had learned the hard way, too: when you break something valuable, the first move isn’t to fix it. It’s to hide it well enough that maybe, just maybe, no one will notice. Too bad for Amelia and Jerome Powell… but Garrett {NAME} pays attention. [Upgrade to paid]( Well That Was Quick Just look at that… on Wednesday afternoon, the markets took off like a rocket. And they haven’t slowed down. We warned on Wednesday about the expected pattern of a downward drift - lower highs and lower lows. But something happened. Oh, yes… something happened. Look at the chart of the S&P 500 ETF (SPY) on Wednesday afternoon. It looks like the damn Nike (NKE) emblem. On Thursday morning, capital just swooshed back into the market with abandon. Our Equity Strength Signals ripped Green at an incredible pace at 10:45, setting off an afternoon push higher and Friday’s continued gains. One Republic Risk subscriber sent me a thank you note for the update. [Upgrade to paid]( So What’s Happening? Well… the headlines talk about the NVIDIA (NVDA) CEO waxing about how the company can’t fail. Right? That has to be it… Well, the other narratives suggest that rate cuts in Europe will produce cheaper capital. Or that the stars are aligning for a 50-basis point cut (which is silly because it would mean that our economy is heading into serious economic deterioration) Markets love lower yields, which raise collateral values... But there’s something else here… Do you see the obvious place where the signal lies? Not the S&P 500. Not the oil markets, that’s for sure. There it is… Gold prices ripping above $2,600… Silver prices… cracking to $31.00. Bitcoin back at $60,000. Ah… there it is… monetary inflation. The things that benefit from the free report we wrote in March ([The Hedge of Tomorrow]( calling for this year’s monstrous devaluation of fiat around the globe, more debt, and more liquidity. And what’s the source? There’s mania right now happening at the central banking level. I suspect we’re on the verge of finding out what broke in the markets when the Bank of Japan fueled its largest market crash since 1987 in early August. They broke something - there’s no way that they didn’t. You don’t have that level of volatility happen and someone big doesn’t go down. Someone who was picking up pennies in front of a stream roller… Someone who needs a bailout (quietly). [Dario has been screaming about this for weeks](. As we noted, China’s dealing with a debt-deflation problem, reminding us of the chaos that ensued globally in late 2015 before massive coordination on the global central banking front. They bailed out everything - pressed the dollar lower - and helped spur a massive market rip higher in the first few months of 2016. By the time the media figured it out, six weeks had passed. This week, the Financial Times suggested that China’s central bank would need to produce $1.4 trillion in stimulus to fight deflation. The Peoples Bank of China just engaged in a $33.25 billion reverse repo, and the markets are seeing strong appreciation. Just a reminder… there’s a relationship between China’s stimulus actions and the impact it has on copper prices, according to Michael Howell’s analysis of monetary policy. The reason is that China’s a manufacturing economy, where the U.S. (whose banks benefit from stimulus) is a financialized economy. And I haven’t even brought up Japan… where things are still upside down. These moves higher in commodities give us clues that something is happening. I remain VERY bullish on actions made by central banks to provide stability well into 2025, which is bullish for the same playbooks we’ve touted over and over. Commodities, gold, some BTC (until 2026), stocks with prefect 9 Piotroski scores and little debt, prime real estate, and non-capital intensive assets. But if this turns around the other way, I also have a lot of cash ready to buy… China has suffered immensely from boom and bust cycles, driven not only by central banking but also central planning in industry. The United States has suffered over the last 30 years from central banking… and we continue to see regulatory creep and takeovers of industries (cough, healthcare… cough… electricity). We should pay attention. But we won’t. Hence more inflation in the future. Buy the stuff that isn’t nailed down. Then nail it down… because another storm is coming. They broke the whole damn thing, and they’re trying to glue it all back together. Stay positive, Garrett {NAME} Disclaimer Nothing in this email should be considered personalized financial advice. While we may answer your general customer questions, we are not licensed under securities laws to guide your investment situation. Do not consider any communication between you and Florida Republic employees as financial advice. Under company rules, editors and writers cannot recommend their positions. The communication in this letter is for information and educational purposes unless otherwise strictly worded as a recommendation. Model portfolios are tracked to showcase a variety of academic, fundamental, and technical tools, and insight is provided to help readers gain knowledge and experience. Readers should not trade if they cannot handle a loss and should not trade more than they can afford to lose. There are large amounts of risk in the equity markets. Consider consulting with a professional before making decisions with your money.   [Like]( [Comment]( [Restack](   © 2024 Garrett {NAME} 548 Market Street PMB 72296, San Francisco, CA 94104 [Unsubscribe]() [Get the app]( writing]()